By Mark Oppenheim
This article is a companion piece to Running an Effective Nonprofit CEO Search. While the previous article was addressed to Boards seeking their next CEO, this one is addressed to CEOs, C-Suite Execs and Board Committee Chairs involved in the search for a next C-Suite leader.
Departures from a nonprofit’s c-suite can destabilize your org financially and operationally due to a nonprofit’s relatively lean executive bench, so it’s important to have the search for a replacement underway quickly. Until a successor is placed and acculturated, risk to the org must also be managed.
Here are steps a nonprofit CEO can take to manage risk while executing a c-suite search.
Coverage until the new c-suite leader is hired
“To interim or not to interim, that is the question…”
When a c-suite department head departs, it’s sometimes possible for the department to just muddle through until a replacement is found. This is almost always an option, and not necessarily a bad one.
There are a few rules of thumb a CEO can follow to determine whether an interim leader is required. An interim leader is required if:
- your nonprofit is small and/or there is insufficient subject matter expertise and management depth in a particular department for it to operate properly after the departing person leaves;
- big risks, mission critical tasks or events, and/or an emergency situation must be managed through to resolution before a new person is hired;
- a substantial number of departmental staff or transactions must be actively managed on a day-to-day basis.
Most convenient and least disruptive is to deploy an already acculturated interim person (or co-interims) to step into the role from current staff or from the Board.
Another (but less attractive) option is selection of a subject matter expert in your region who knows and is known by your community, and who is familiar with your mission, sector and constituents.
Least attractive, but still sometimes needed, is a subject matter expert interim who is a complete outsider and will have to be on-boarded to the org and then eventually exited.
Sometimes there are no good interim options, so if you need an interim be prepared to take the least-bad option. Any interim will benefit from strong oversight (both from the CEO and Board), frequent guidance, and quite a bit of staff support to help that person succeed.
People can be worried, distracted and confused when a c-suite transition occurs. Particularly when there is a substantial staff contingent, it is important to be clear about how day-to-day management will function during any transition. Elevated CEO & Board attention to the department in question, along with good communication, will reduce worry and help people adjust to the interim’s leadership.
Determine your Recruiting Approach
In our succession planning articles and clinics, we point out that organizations can (and ideally should) be forward-positioned and always prepared for changes to the c-suite – i.e. with plans for each role should someone leave.
But it’s just a fact that such advanced planning is rare. This isn’t a sign of a management or planning deficit; rather, it’s a sign people are busy and focused on what comes next rather than events that might theoretically happen way off in the future.
The CEO has just three options when faced with a c-suite departure, that is if the CEO wants to keep the department in question relatively intact and functioning much as it has. The CEO can:
- Hire someone they already know and like for the role. If the CEO is in this position and the person they like is also fully embraced by the staff and Board, then do this! The CEO can even initially offer a trial, acting or interim period that can segue into the full-time role. This is particularly useful when considering a promotion from within. On the other hand, if there are doubts then running a search will eliminate those doubts and provide other options. If you’re not just settling, this is the way to go.
- Run a search yourself or through your HR department, with or without a conventional recruiter. In this scenario, a recruiter posts and then draws attention to a position description using social-media-like platforms such as LinkedIn, Indeed, Idealist, etc., and other industry-specific platforms. For recruiters, this process can be like printing money: it can be executed by people without much nonprofit or technical knowledge, easily connects to the subset of motivated candidates who are actively on a job hunt, and quickly generates lots of resumes for review. Results that recruiters see tend to tilt toward job-seekers who spend the most time posting and surfing on the platform being queried. So it rewards those who spend lots of their time on particular platforms. Certain employed leaders always have one eye on the door, and this recruiting approach will also capture these. To reduce the number of job-seeker-resumes under review to manageable levels, the process relies on shortcuts like buzzword filters, Applicant Tracking Systems, and exercises candidates are asked to complete and which receive grades… so test-taking is measured. While this kind of process has its place as a least-cost form of recruiting, be aware of its limitations. The approach mostly focuses on conveniently engaged candidates. Information submitted on candidate resumes and the buzzwords they use are often AI-generated. Analysis of a candidate’s past operating context is only vaguely considered or skipped, meaning that your pool will include candidates who may have worked in an operating context that is irrelevant to your org. Dives into a candidate’s specific knowledge of workflows and the technical aspect of their work are limited, not iterated in order to delve deeper, and not generally done by experienced investigators. Candidate evaluation is vulnerable to manipulation, either consciously by candidates or unconsciously by opinionated reviewers. Candidates exiting such a process often feel used, manipulated and treated like cattle. So we have three bottom-line observations about this kind of process. The fact is that eliminating the costly parts of recruiting saves money. You spend less when you eliminate systematic person-to-person outreach, nominations from those in the know, experienced analysts with sector expertise, and fact-checking. Automated tools connected to huge job-seeker databases will instantly generate reports implying that information is comprehensive & authentic when it’s in fact incomplete, tilted and a mixed bag of truth & fable. These criticisms notwithstanding, this approach inexpensively surfaces lots of resumes produced by ready-to-work job-hunters. Sometimes this is all that’s needed.
- Executive Search. Executive Search systematically captures both active job-seekers and others who are not looking but can be engaged if properly approached. It involves gathering human intel from observers in the know, skeptical analysis of candidate claims, intimate knowledge of the workflows and operating environments of diverse nonprofits, trust and personal credibility with networks of insiders who have insights to share, and verification of evidence submitted by candidates on their accomplishments. Compared to conventional recruiting (which is described in the preceding paragraph), Executive Search is a far more comprehensive process and will cost about 20% – 30% more than running the search yourself or using a conventional recruiter. Executive Search will also engage candidates that other processes neglect, and involves deeper analysis of each candidate, analysis that is guided by the specific attributes of your nonprofit’s operating environment, mission and constituents.
Each of the above approaches is a completely valid option. Which is best depends on your nonprofit’s situation, the rarity of the attributes you seek in a next c-suite leader, and how important this next leader’s performance is to the CEO and organization.
The Recruiting Process
The rest of this article is about how a CEO can get the most value from a recruiting or search process. The process breaks down into a few steps…
The CEO should form an Advisory Committee. Most chief executives are also subject matter experts in certain fields, but even when their expertise overlaps with that of the c-suite leader being recruited it is advantageous for the CEO to have trusted advisors who will join the candidate evaluation process. We generally suggest to CEOs that Advisory Committee members include a Board member with appropriate technical expertise that overlaps with that of the c-suite executive being recruited. If your Board lacks members with the expertise of your c-suite, it’s time to add to your Board. The Advisory Committee should also include one or two trusted senior c-suite staff at the same level as the new executive being recruited. Two or three people advising the CEO on a c-suite hire is helpful for spotting flaws in candidates, and it gives the CEO a more textured analysis of the candidate’s fit from the perspective of insiders. Evaluation of each candidate’s technical expertise will be central to this executive’s selection and hiring, so if the person being recruited is a finance, fundraising or programming professional, the Advisory Committee should include members with relevant technical expertise. Otherwise it will be difficult to challenge the credentials and claimed accomplishments of candidates in their area of expertise.
Select your recruiting approach. As noted above, the CEO can manage the recruiting process through their HR lead or a conventional recruiter, or go the Executive Search route. In general, easier searches can be done using internal resources or least-cost recruiters. When more rigorous outreach and analysis is required, an Executive Search is in order. Given that the large number of recruiters and executive search firms out there are not interchangeable, it’s important to choose a service provider that you trust, with values and ways of thinking that align to yours and the ability to contextually analyze candidates in terms relevant to your particular nonprofit, and one that will invest until you are done and happy. Transparency is also important so that you can periodically guide and correct your search consultant.
Monitor progress. Adjust process monitoring to the search approach taken:
- When using recruiters that rely on posts & platforms, instant gratification is the entire point… so monitor weekly. Don’t get caught in a psychological trap of initially opting for a least-cost recruiting approach that promised instant gratification, to only then be gradually enticed into investing significant time & treasure as if this approach thoroughly explored all options and candidates. When recruiters mostly focus on active job-seekers, resumes should start flowing almost immediately. If you or your conventional recruiter is not gratified with great candidates within 15 business days, consider moving on to more rigorous outreach.
- When conducting an Executive Search, the monitoring clock is different. This is because Executive Search engages leaders based on their relevant accomplishments, not based on whether they are currently seeking a job like yours. A search consultant follows chains of recommendations from those in the know, engages different candidate profiles from across different sectors, collects intel to verify accomplishments claimed by candidates, and analyzes each candidate in your specific context to unpack strengths and weaknesses BEFORE you invest in hiring and integrating them into your nonprofit’s leadership team. Currently employed candidates will always meticulously analyze whether a role is right for them before they consider a move. Engaging the very best and the very busy takes time – it may take 3 calls to busy people over several weeks to have just one productive meeting, and more time before the target seriously engages. Having weekly status meetings, particularly in the first weeks of this process, is like watching grass grow; however, monitoring at key points is absolutely critical. Discuss monitoring cadence with your search consultant, set a schedule for check-in meetings, and communicate accordingly.
Delve deeply and contextually when interviewing candidates. Charisma and communication ability is just 20% of any job, so DO NOT make a candidate’s charisma and communication 80% of the basis for your evaluation and hiring decision. Instead focus on data, workflows, systems, management, methods, and problem-solving within contexts that are relevant to your organization. Not focusing on charisma, presentation and communication skills – the candidate’s ability to charm and spin an interesting story – is way harder to do than one might think. Early in my career, I participated in an experiment that compared how people absorb data versus stories and images. The experiment made clear that people are far more captivated by image than by data, expertise or proof of performance, and it takes a lot of discipline and structure to contextually evaluate competence. For a finance position, figure out who is better technically, is familiar with budgeting and compliance matters for your kind of nonprofit, and has the best approaches to monitoring and enabling financial strength and stability. An artistic director or a curator shapes art experiences: determine who has the best track record producing shows that are critically acclaimed and engage the audience. When seeking a clinical executive to lead mental health services, who has the best understanding and track record orchestrating delivery of such services to patients? What has been the impact on the environment of a leader’s conservation programs? Which fundraising candidate has consistently raised the most money and are their donors similar to yours? Which marketing candidate is best at segmenting the market and systematically engaging and influencing targets? Each c-suite position and discipline has workflows, methods, cultural attributes, stylistic elements, values, networks, sensitivities and metrics that comprise 80% of that candidate’s success, but what we all experience is how they communicate. Be ever mindful that when a candidate interviews, you are testing a performance art. Producing results involves different skills.
When you know who you want, develop an offer and drive to conclusion in days… and always be prepared for either side to walk.
Parties that go through an extensive recruiting or search process develop expectations of one another. This is reasonable. That said, the parties must be mindful that either side can walk at any time. I’ve seen it happen, sometimes unnecessarily. The midst of a negotiation is not a time for delays, vacations, slow communication, scheduling problems, indecisiveness or long discussions. Time kills all deals. When a negotiation lacks or loses momentum, or when either side shows a lack of decisiveness, there is unlikely to be a successful close.
Most negotiations are wrapped up in days – if they aren’t there is rarely a close. Most offers to currently employed candidates must be at least 20% higher than the candidate’s cost-of-living adjusted current comp. Counter-offers are routine – if a counter-offer is within 10% of the offer you extended then your offer is unlikely to succeed. Bottom line: run your c-suite search and conduct negotiations in a way that is crisp, driven, retains options and is flexible. You don’t want to have to do the search again.
A last thought…
When a CEO recruits a new c-suite leader they are deciding their own fate, and success or failure is at stake.
You’ll never regret doing it right.
Register to our free live clinic on Running Effective Searches for a Nonprofit’s C-Suite. It will be hosted on Zoom on September 10th at 12:00pm PST.