Readiness-Centered Founder Transitions

(Photo by iStock/FG Trade)

A great deal has been written
about founder transitions at nonprofit organizations, but much of it focuses on what a board should or should not do, ignoring or downplaying the role of the founder in ensuring a successful passing of the torch. But my experience transitioning out of leadership at Soccer Without Borders (SWB) taught me that it should not only be the founder who leads the way in shaping an effective leadership transition but that building readiness begins long before the transition truly gets underway.

Prepare to Prepare

As a cofounder and longtime executive director, I steered the organization from an all-volunteer staff and a budget under $25,000 to a global staff of 100 and a $5 million budget, through multiple stages of growth and strategic plans, a phase of contraction, and an urgent transformation in the face of the COVID-19 pandemic. At every milestone, I would ask myself three questions:

1. “Am I the right leader for the next stage of SWB’s development?”
2. “Do I still have the support of the team and board?”
3. “Do I want to commit to this role through the organization’s next milestone?”

When the answer was not a clear yes, I knew it was time to start thinking about succession. I knew it was still years away—in fact it turned out to be five!—but I also knew that it would be an emotional journey for me: I had spent the majority of my adult life building the organization, and much of my identity was wrapped up in the SWB mission. But my personal and emotional readiness for transition would only be one piece of the puzzle. A healthy succession from my role would require not only my willingness to leave but also true readiness of the board and the organization’s staff, as well as clear and effective organizational structures and processes. That would have to be built.

Like a three-legged stool, launching a succession process for a founder—or any other long-term leader—without the support of all three legs (leader, the board, and the organization) will create instability. If any of these three legs is not transition-ready, the leader will face a difficult choice: They can stay even if their leadership may no longer be right for the organization, or they can leave the organization to face a riskier future.

Time is necessary because a succession plan is not something that gets drafted and revisited alongside quarterly financial statements or impact updates: It’s making hundreds of tiny shifts in ways of being, decision-making, and power dynamics, as well as ensuring those shifts align with and integrate into a future-focused strategy for the organization. Thinking about leadership transition in this way will result in practical and cultural readiness, allowing the organization to embrace the transition to new leadership.

Readiness-Centered Founder Succession Planning

While recognizing that every founder—or other long-term leadership transition—has its own dynamics, it is important to think about readiness in each of the three key areas mentioned above: the leader, the board, and the organization’s staff, structures, and processes.

Let’s break these down:

Leadership | Detaching the person from the position is the first step to understanding whether the organization is ready for a new leader to come in and make it their own. Three readiness criteria are compensation, organizational structure, and essential tasks.

1. Compensation: Founding leaders at nonprofit organizations are often underpaid for the size and scope of their roles. Hiring a new leader, therefore—particularly if it is the first leadership transition and if there is no internal successor—may require increasing the salary for the position sometimes two or threefold. If your organization values pay equity—and I hope that you do—then increasing executive director pay will also require proportionate pay increases across the entire organization.

In the five years leading up to my transition out of the Executive Director role at Soccer Without Borders, we completely revamped our compensation structures, creating compensation guidelines, benchmarks, and pay equity protections and ratios. When it came time to hire a new Executive Director, every other role had already been adjusted to the new benchmarks. In this way, the Executive Director role could be the final piece of our compensation readiness, not the first.

2. Organizational structure: Building a well-designed organizational structure, with clear responsibilities and reporting lines, will facilitate recruiting the right new leader and provide that leader with a powerful launching pad. At the end of 2016, the 10^th anniversary of SWB, I had 14 direct reports across eight time zones. But while I understood the work of all parts of the organization—and could provide coverage and support for almost any position when needed—we could not have (and should not have) expected that of my successor. Founders are often willing and able to “wear many hats,” a quality that is often viewed as a strength, but it can create difficulties in finding a successor if all of those skills need to be replicated.

By the fall of 2021, we had restructured SWB so that I had four direct reports across four time zones, with an Executive Leadership Team responsible for Programs, Finance & Operations, and Advancement, each with its own growing teams. There were still gaps, to be sure, but we had experienced and committed people in other key director-level roles and a culture of flexing into areas that were needed.

3. Essential tasks: Readiness for transitions not only requires a strong leadership team but also smart processes for essential tasks like payroll, expense tracking, and the like. In 2018, Soccer Without Borders had grown to have full-time and part-time staff and contractors working in five US states and three countries on multiple continents. Running payroll and paying our weekly bills was more complex than ever and, since our early days of in-house payroll operations, I had approved every pay run. When I was married and planning a two-week honeymoon (that would mean missing one payroll cycle and two bill-pay cycles) it forced us to identify who was “on deck” for essential tasks like payroll, and not only train them but better document our processes so these systems could run smoothly without me.

Readiness for transitions requires that you identify which essential tasks could work more effectively and efficiently with being dependent on the organization’s leader (and how to best design those processes). This could be through training another staff member, contracting with outside experts, or in some cases simply creating clear written or video instructions.

The Board of Directors | It is, ultimately, the responsibility of the board of directors to hire a new chief executive. However, that means that a group of (talented) volunteers must hire a leader for an organization at which (likely) none of them has been employed, and which many may have known for only a few years. It can be especially problematic if the board has not yet evolved from a “friends and family” board to a more independent one. Building capacity and processes at the board level is no less essential for an effective leadership search-and-transition process; whether a recruiting firm is engaged or not, building trust and communication, leadership, representation, and alignment with mission will be crucial.

1. Trust and Communication: Even with the best board, hiring a chief executive is an incredibly difficult task. It requires a deep well of trust to ensure there are strong lines of communication not just between the board and the outgoing leader, but also among the board members themselves and between the board and the staff more broadly.

At Soccer Without Borders, our annual, multi-day, in-person board meeting played a huge role in strengthening trust and communication, including trust of the staff in the board. Visits by board members to see SWB’s programs firsthand, as well as having board and staff members together in working groups and on committees, were also great ways to strengthen this trust.

2. Board Leadership: No matter how prepared an organization is for a leadership transition, it will still involve an extraordinary amount of work for the board’s leadership positions. Establishing board leadership positions (President, Secretary, Treasurer, Committee Chairs, or the like), reinforcing that leadership, and strengthening key governance, fiduciary, and strategic responsibilities at the board level are all crucial precursors for a leadership transition. Creating a collective board self-assessment can help de-personalize this board-building process and focus everyone on the shared goal of ensuring a high-functioning board of directors. It may be necessary to start by making sure there is clarity about what a successful board looks like, including board member and officer position descriptions and goals for measurable things like attendance, before moving to a more robust board assessment to identify areas of board responsibility that need attention. Yet, practicing self-improvement in areas that have lower stakes before undertaking a high-stakes chief executive hiring process can build important leadership and decision-making muscles that the board will lean on in a succession process.

3. Alignment with Organizational Mission and Values: Every board should have a commitment to diversity of lived experience and expertise that aligns with the organization’s mission, as well as a process for nominating board members that aligns with organizational values. If the board of directors is not clearly aligned in these ways, it will diminish its credibility when it seeks to hire a new chief executive for the organization. Building clear recruitment and nomination systems that prioritize these goals, as well as creating on-boarding systems for new board members that ensure that each has a meaningful way to contribute to the organization will help ensure that a high-functioning board is in place when the time comes to hire the new executive.

The Organization | Positioning an organization to be ready for a leadership transition means shifting language and behaviors that reinforce the organization’s image as the “founder’s baby” or “working toward the founder’s vision.” Four readiness criteria at the organizational level are shared leadership, right-sized operations, healthy finances, and shared relationships.

1. Shared Leadership: Great leaders will motivate their team to work toward a clear vision. Building leadership transition readiness at the organizational level must de-center the founder as the sole leader and focus all in the organization on a common mission and vision. Cultivating not only shared leadership but also shared ownership of organizational goals, will shift the perception (internally and externally) that the organization cannot imagine itself functioning without the founder.

2. Right-sized Operations: Nonprofit teams are often very lean at the outset. As an organization grows, there is an opportunity to allocate different functions to separate individuals and create departments, relying less on the need for each staff member to wear many hats.

Whatever the stage of development prior to a transition, organizational readiness will require thinking about what is the right-sized capacity in major function areas such as finance, development, programs, communications, and human resources. For a smaller organization, this may not mean having separate personnel for each of these areas, but rather developing effective systems and procedures in place to help individual staff cover multiple functions.

3. Healthy Financial Position: Whether or not a recruiting firm is employed, the time and resources of a search may strain the organization’s financial position. If possible, it is helpful to build up some reserves in the years preceding a transition that can be deployed to cover search and transition costs so there is no need to put additional strain on the annual operating budget. Connecting with key funding partners and supporters well ahead of the search to preview the transition timing is critical in this process, and is equally important to ensure that key funders appreciate the steps being taken by the board and organization to build a base for a smooth leadership transition.

4. Shared Relationships: When organizational partners and donors have long-standing relationships with the founder, they can view a transition as a moment to withdraw or shift their support to other priorities. This can be devastating; periods of transition are actually a time when the organization needs this continuity of support the most. Organizations can safeguard against this by ensuring there is more than one person involved in every key relationship, inviting other organizational leaders or board members into formal and informal conversations with partners and donors, as well as keeping points of connection mission-centered, rather than person-centered. Finally, it is important to communicate about the transition early, ideally before it happens, and express how their continued support will support your shared vision beyond the time of transition.

Next Season

At Soccer Without Borders, we liked to say that “if you have a new player, you have a new team.”

The initial phase of new leadership will inevitably have ups and downs; the new leader and the team will and should co-create their new way forward. But entering this phase in the strongest possible position, a position of readiness at all levels of the organization will provide the stability for this process of change to happen organically. Founders and long-term nonprofit leaders have a key role to play in helping their organization ensure that all three legs of the transition readiness stool are stable, to leave behind a strong organization and provide the new leader with a powerful platform from which to launch the organization into its next phase of development.

Read more stories by Mary Connor.