Is a clean break really the best way to ensure a successful nonprofit founder succession? While conventional wisdom suggests that it is, new research from The Bridgespan Group finds that the answer is often no.
“Making Founder Successions Work” published today [February 15, 2018] in Stanford Social Innovation Review, details key findings from Bridgespan’s in-depth, quantitative study of nonprofit founder transitions, among them:
- More nonprofit boards work out a continuing role for founders (45 percent) than pursue an amicable clean break (31 percent);
- Transitions that paired a founder and successor from inside the organization proved to be the most successful of all transition models;
- Involuntary breaks (24 percent), where founders are ousted by the board, tend to be the least successful; and,
- Transition work is challenging and requires preparation, including investing in internal talent development, talking about succession planning, establishing a transition fund, and shoring up board oversight.
According to Jari Tuomala, Bridgespan partner and coauthor of the study, “Bridgespan’s research indicates that an extended founder role, when done right, can be the best path to maintain funder, board, and staff loyalty, while allowing the new leader to benefit from the founder’s capabilities and knowledge. Everyone wins, including the organizations and most importantly, their beneficiaries.” According to Pritha Venkatachalam, a partner in Bridgespan’s Mumbai office, while this Bridgespan study focused on North American NGOs, Bridgespan’s previous study on leadership development in NGOs in India found that similar dynamics are playing out.
“Some of the pioneering social entrepreneurs who launched NGOs a decade or two ago are beginning to relinquish their spot at the peak of the organization’s pyramid. However, for nearly 60% of NGOs in India that were established over a decade ago, the founders are still involved as a Board member or in other non-leadership roles—which can support transition. For example, Ramesh and Swati Ramanathan, who founded Janaagraha, invested in grooming an internal successor as the CEO, and continue to guide the organization as Governing Board members,” she said.
Coauthor Donald Yeh, a Bridgespan manager, noted that interviewees mentioned a number of long-standing practices to manage leadership transitions. Among them: start early in planning for transition, invest in developing internal successors, establish frequent interaction between successors and board chairs, and maintain active board engagement in the process.
In addition, Yeh said the research identified five recommendations that more directly address the practical aspects of managing an ongoing role for a founder. “These recommendations apply to any organization that seeks to extend the founder’s stay,” said Yeh. They are:
- Limit the founder’s new role to specific areas of interest and capability;
- Engage in regular coaching to help navigate operational and emotional aspects of the transition;
- Anticipate conflict and agree to a process to mitigate it;
- Transition board, funder, and staff loyalty in logical order—they need to be shepherded to new leadership; and,
- Create initial separation (founder should have low profile) to allow the successor to settle in, particularly if the founder’s new role is substantial or long term.
“Every year," said Tuomala, “thousands of nonprofit boards face the daunting task of hiring a successor to replace the seemingly irreplaceable, long-serving, beloved founder, and the transition is fraught with anxiety. Our aim in conducting and sharing this study is to help nonprofits and their boards plan for these transitions and lay the foundation for stronger organizations better able to serve their beneficiaries.”
This post is a February 15, 2018, press release issued by The Bridgespan Group. The Bridgespan Group is a global organization that collaborates with mission-driven leaders, organizations, and philanthropists to break cycles of poverty and dramatically improve the quality of life for those in need. It brings a rigorous approach, shared passion, and deep social sector experience. Its services include consulting to nonprofits and philanthropists, leadership development support, and developing and sharing insights.