Should an Exiting CEO Stick Around?

A longtime association executive will eventually leave. But how far away should a former CEO go?

A recent article in the Stanford Social Innovation Review challenges some of the conventional wisdom around the departure of nonprofit founders or long-term CEOs. In “Making Founder Successions Work  (opens in a new tab),” three experts from the consultancy the Bridgespan Group conducted surveys and interviews about such departures, and found that there are benefits to letting the former executive stick around for a while.

“To a surprising extent, transitions that extend the role of a nonprofit founder yield the best results,” they write. “In fact, nearly half of all founders who step down continue to bring their knowledge, relationships, and passion to bear for the organizations they started.” And it turns out that keeping a role for the founder is a more popular option (45 percent) than a clean break (31 percent). And among long-term CEOs, more organizations reported having a successful transition (80 percent) when the CEO stuck around than when the CEO didn’t (64 percent). The study also found evidence of longer tenures for the successor and revenue growth when the former exec plays a continuing role.

For leaders who would prefer a clean slate and an opportunity to undo typical founder’s-syndrome issues—the old leader becoming a busybody, lots of “we’ve always done it this way” pushback from stakeholders—this can be a difficult finding to process. But as with all things relating to executive transitions, success depends a lot on how much preparation goes into it, and how you respond to the inevitable bumps along the way.

That’s as true in the association world as it is in the larger nonprofit space. In 2015 I spoke with a handful of CEOs who’d replaced long-tenured executives, and the consensus is that those transitions go well depending on how strong the advance preparation is, and how careful everybody is about defining a role for the former exec. That can be challenging for the board, which has likely gotten comfortable with the culture and tone the longtime leader created. “When this person leaves, retires, or whatever, it often means the board—which has not been very active because they’ve relied so much on this wonderful executive they’ve had, who’s helped them through all these years— needs some help itself in getting its confidence together,” leadership consultant Robert Van Hook, FASAE, CAE, said.

One executive I spoke with, Tad Parker at Printing Industries of New England, had an arrangement where the former longtime leader would spend a year in a formal consulting role, effectively making him a co-CEO. “The downside was that as time moved on, he and I had the inevitable—‘power struggle’ is not the right term, but exchange of authority,” he said. “I had the authority from day one but didn’t want to offend him as we were moving through it.”

So, how to move through it? One challenge, as Bridgespan’s own research shows, is that barely half of nonprofit boards create a formal onboarding process for new executives. So a useful first step is to clarify what roles the former executive will have—and which will be left for the new leader. (Among the top roles identified in the new study: fundraising, serving as a spokesperson, and advocacy.) Beyond that, the SSIR writers point to a host of ways to prepare for transition: “Start early because successful transitions often take several years to plan, invest in developing internal successors, establish frequent interaction between the successor and board chair, and encourage active participation by the board throughout the process.”

But the most critical issue, I think, involves resolving conflicts. CEOs needn’t be type-A personalities, but if they’re doing their job right the have firm ideas about how an organization should be run. Inevitably that’ll clash with another CEO with firm ideas. Mindful of that, one organization mentioned in the article kicked all serious conflicts up to the board chair for a formal ruling. Another set a rule where all ideas the former exec had was run by the new exec before going to staff. That speaks to another important point about these co-leadership arrangements: If we agree that the tone from the top is important, staff deserve clarity about who’s on top.

For all the benefits that the Bridgespan Group finds in these arrangements, though, I’m more inclined to let associations feel their own way when it comes to transitions. It is, after all, an arrangement, something that requires active management and an association CEO already has enough of those without adding another that can easily become problematic. Successful older execs deserve good exits; new execs deserve good onboarding. If those processes are handled thoughtfully, the new leader is primed to succeed, even if the old one doesn’t stick around.

How has your organization handled CEO transitions, especially ones involving a long-tenured leader? Share your experiences in the comments.

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