The Power of an Interim Executive Director

When a nonprofit organization experiences a leadership transition, hiring an interim executive director can be the most logical and positive action its board can take.

Leadership change is an increasingly common aspect of nonprofit organizational life. Multiple studies reinforce the impending turnover of top leadership in the nonprofit sector, due in great part to the aging and retiring boomer population. It’s not a matter of if, but when the change is coming. When your organization experiences this transition, research and practice suggests that groups that plan well and use a skilled interim executive director, emerge stronger, more fiscally sound, and with higher levels of optimism about the future impact of their programs and services.

Leadership transition is a period commonly marked with emotion, tension, and stress. Internally, staff and board are in the midst of separating from the previous executive, and the departing director is in an in-between state and can be confused about how much influence he or she wants or should have on the agency’s future. If the director’s departure is forced, emotions may be particularly high.

Externally, some funders, donors, and volunteers will take a “wait and see” approach before becoming involved and investing in the organization. This can create strain between needs and resources, further taxing administrative systems.

A highly skilled interim executive director temporarily takes the helm of an organization, helps the board and staff address important systems and capacity issues, and lays the groundwork for the following leader’s success. This leader:

–       Serves as a bridge, giving the board ample time to conduct a thoughtful search process and managing the day-to-day executive responsibilities that include: conducting an objective organizational review, leading anxious staff, reassuring wary funders, and keeping finances and revenue generation on track.

–       Tackles unique challenges related to the transition, building on strengths and addressing particular vulnerabilities.

–       Helps the board clarify its vision and future leadership needs.

–       Models excellence in management and leadership.

–       Mentors the new executive director once appointed.

 

When considering hiring an interim executive director for your organization:

–       Begin with the end in mind. Your board should determine what it wants and needs and what is most critical to success over the next few months.

–       Identify urgent issues or challenges presently facing your organization.

–       Review the current executive director’s job description, determine priorities for the transition period, and draft an Interim job description.

–       Seek an interim executive director with solid management experience and a transition skillset. This takes precedence over familiarity with your organization or industry.

–       Consider that the assignment is both temporary (four-eight months) and part-time (20 – 25 hours/week) and that the individual should not be a candidate for the full-time position.

–       Realize that, due to the unique demands of the role, interim executives are almost always paid higher on an hourly basis than the agency’s permanent executive (although, most interims are part-time and do not receive normal agency benefits).

–       Tap local resources for potential candidates, such as area college nonprofit degree programs, consultants serving the nonprofit sector, industry sector affinity groups, and nonprofit consortiums.

There is great power and potential in this “neutral zone” – the space after the former director leaves and the new leader begins. The organization is more open to change than usual and poised to leverage the heightened opportunity. Systems and culture become a bit “unglued” and can be put back together in new and exciting ways that leave the nonprofit stronger and more sustainable.

Executive Leadership Transition

In a recent survey of 3,000 nonprofit executive directors, 67% indicate that they expect to leave their jobs within five years, including 10% who are already actively considering an exit. This survey, “Daring to Lead 2011,” which was conducted late last year, is the third leadership study produced by the Meyer Foundation and CompassPoint Nonprofit Services over the last 10 years and continues to forecast the significant workplace transition.

Of course, the forecast of high levels of executive turnover is true across all businesses, not just nonprofits. On January 1, 2011, the first baby boomers turned 65. And every single day since and for 19 years to come, more than 10,000 baby boomers will reach 65. Whether the long-time warnings of a labor shortage are real depends, in large part, on the continued participation of the baby boomers in the labor force. And how effectively workplaces attract, retain, utilize, and transition talent will determine future success.

While not alone, nonprofits as a sector have considerable challenges in addressing leadership transition:

– Tend to be small-to-medium size operations and, as a result, are not likely to have as many resources to address strategy, planning, and leadership development.

– Are often institutions with a culture of group decision making, where business gets done through committees and boards of directors – a process that can create added delays and complexity.

– Can be highly funder-dependent, and any transition – especially with an organization’s top leadership – can threaten these vital relationships and the very future of the organization itself.

– Frequently are lead by an original founder or long-time executive. Over time, the top leader and the organization itself are inextricably connected. When this leader goes away, so could the organization.

– Often do not have sufficient reserves (if any at all) to weather an economic downturn, exposing the organization to significant financial vulnerabilities. Leadership transitions, if not handled properly, can further intensify this situation.

This study’s findings also reveal that many boards of directors are unprepared to handle the transition and select and support new leaders. Despite over a decade of attention to this issue, executives and boards are still reluctant to talk proactively about succession, with just 17% reporting that their organizations had a written succession plan.

We must not overlook these pivotal leadership changes for the development opportunities that they are. Properly and proactively managed, these transitions provide an organization a period to pause, reflect, regroup, and focus. It’s a unique opportunity to examine strategic direction, priorities, and chart a future course. The key is not merely to endure it, but to emerge stronger and more dynamic from it.