Building the Bridge for a Successful CEO Change

Many associations today are experiencing or anticipating leadership transitions as long-time CEOs/executive directors reach retirement age. But not all organizations are doing the succession planning they should be.

“No one really wants to have the conversation,” observed David Martin, managing partner with Sterling Martin Associates, an association CEO search firm. If the CEO brings up the conversation, the board might think the executive is planning to leave. If the board brings it up the CEO might wonder if they’re planning to fire him/her.

“The way around that is to say ‘This is a best practice.’ You should put a succession plan in place almost from the day that you start the job,” Martin added.

“I think an executive director’s job is to prepare their board,” agreed Alicia Dover, CAE, executive director of PHCC Texas since last January. “The board needs to know that you, as executive director, are thinking ahead for them. I’m not here forever, so I have done my due diligence to make sure that someone would have the ability to step in and carry on.”

The percentage of organizations that do an external search for a new executive is very high today, according to Martin. As part of her succession planning, Dover is trying to earmark funds the board could use to hire a professional search firm. “I want my board to have every resource and opportunity available to make the right decision,” she said.

Searching for Successors

Association executives have different timetables when it comes to announcing their plans for retirement. John Sharbaugh, CAE, the recently retired CEO of the Texas Society of CPAs, shared his planned retirement date with his board members four years ago at contract renewal time.

“They are volunteers; it’s not their full-time job. You need to give them adequate time to go through the process, to create a search committee and hopefully hire some professionals to help them do it depending on how big the organization is,” he said. After helping the board choose a professional search firm, Sharbaugh said he stepped out of the interviewing process.

But Pat Smith, the 30-year executive director of the Texas Library Association, announced in January that she wanted to retire in June. She did extend that timetable when the association was unable to reach an agreement with their chosen candidate after an initial search.

Smith served as a resource to her board during the first search, but she did not play an active role in the interviewing process. She felt that separation gave the board the ability to choose a CEO who would move in a different direction if that was what they wanted. But the new board has requested that Smith be more involved in its second search. “I think there are some perceptions and observations that the current CEO can make on the strengths and weaknesses of the candidate during the interview process,” she said.

Board members today are looking for a different skill set than they were when long-time executives interviewed for their jobs. But getting the right person can be difficult. Associations want visionary, strategic leaders, but at the same time smaller associations in particular also require an executive who can run the association on a day-to-day basis. While larger associations have someone on board who can handle these operational tasks, others have found new ways to handle them. Smith, for example, has been delegating more responsibility to her staff for hotel and convention center contracts.

A comfort with technology is also important for new executives. “Understanding how to use it properly, how to connect with your members and each other using technology is critical,” said Sharbaugh.

“[Boards] do expect the person to have an appreciation for social media and technology and how important those are in the organization,” added Martin. Social media is especially important for associations looking to recruit new members from the millennial generation, but executives will also have to know how to deal effectively and work with staff and members from many different generations.

Boards may also have to prepare themselves for different attitudes about work. Ginny Sutton, executive director of the Texas Self Storage Association, is currently looking for a communications director who could potentially take over when she retires in seven years. She observed that the older generation of leaders expected to dedicate their life to their work. But the millennials who are applying for the job have made it clear that they value work-life balance. “They want their lives and their business worlds to be separate; they don’t want to work a 50-hour work week,” she said.

Shifting Roles

There are different challenges when a current staff member moves into the executive office. Dover, previously director of finance/operations, worried about how her staff would react to her new role. “Even though they were already coming to me for many things, ultimately I didn’t have the hire/fire decisions, so personnel issues were a concern. I felt that the first 90 days would be very crucial,” she said. Taking on the new role was especially difficult because her predecessor, Nancy Jones, was a “beloved individual” and Dover wondered if her staff would be as loyal to her as they had been to Jones.

Dover held staff meetings and one-on-one meetings with individuals, listening to them and tweaking their roles and responsibilities to better reflect their workload. Her efforts paid off; only one staff member has left because she was not able to adapt to the changes being made.

Jodi Ann Ray, CCE, IOM, who succeeded Sharbaugh at TSCPA, faced an unusual situation. During the search process, the association’s managing director of government affairs had to step down suddenly. Sharbaugh volunteered (subject to the new CEO’s approval) to take on that role to help the association through the 2017 legislative session and the 2019 session, when the professional board will be going through a sunset review.

Ray admits that she wondered if people would understand and accept that she is now the CEO. But she and Sharbaugh had some open and honest discussions about their roles and she’s glad to have her predecessor’s help. “We will have that continuity with the team through a very important process,” she said.

Smooth Transitions

Departing leaders have found different ways to pass down their institutional knowledge. Dover appreciated Jones’ three-page, bulleted task list with month-by-month deadlines. Smith has put together a manual of all board decisions going back 30 years so that her successor and the board will understand why certain things have happened.

Almost all of the retiring and incoming executives felt that a relatively short transition period of a month or so is the best scenario for all concerned. The departing executive director can provide the new one with a crash course in the association’s culture, make themselves available for questions and then get out of their successor’s way.

Outgoing executives have to accept their new role. “Your job is to help the next CEO be successful and to help that organization be successful,” said Sharbaugh. “It’s like running a relay race. The guy I replaced handed it off to me and now I’m handing it off to the next person, and at some point in time she will hand it off again, but the organization hopefully goes on forever. We are just playing a role, in it for a period of time, and understanding all of that is critical.”

Author Mary Lou Jay is a professional freelance writer.
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