In the nonprofit community there is a new leadership avenue to be explored – one that has been used to great advantage by for-profit organizations. At times when the chief staff executive position suddenly becomes vacant and the issues before the board seem too large, too overwhelming, and too systemic to be fixed without a different approach, it may be appropriate to consider interim management.

There may be no more daunting prospect for a board chair than the sudden departure of the organization’s chief staff executive. The loss of a key staff member is all the more stressful if it was a board decision to terminate the employment relationship. Many volunteer directors tell me they did not expect the additional workload and related pressures of navigating the turbulent waters of a CEO’s departure.

Looking within

An associated challenge to a key staff vacancy is that it can be the result of volunteer and governance dysfunction, or some other organizational factor that requires exploration, careful thought, and resolution. Major issues often take time to be fully understood. For example, boards that look back over the past decade and see evidence of high staff turnover, especially at the executive director level, must ask themselves if the real issue is an organization culture with too much board interference, role confusion, and meddling in staff work.

There are other factors that give rise to high CEO turnover. The organization may not have competitive compensation practices and cannot hold a CEO for more than a year or two. A tougher challenge, but a very real one, is if the organization is not seen as an interesting place to work. This challenge takes many forms including a mandate that fails to inspire others, few opportunities for professional and personal growth, a perception that the organization is well past its best before date, and a mission that attempts to do too many things that offer too little value to members.

Where there are complex reasons causing the termination or departure of senior staff, organizations need time to sort through the issues or else they risk perpetuating the same dismal results. Think of a favourite sports team where the real issues are a mediocre group of players, an excessively intrusive owner, and intense media scrutiny. After the third or fourth manager or coach is fired in as many seasons, is it realistic to expect that the next coach will transform the picture?

Interim leadership can turn things around

I have helped boards select the right interim staff leadership. In all cases, the decision to engage an interim CEO has allowed the board to take the necessary time to carefully evaluate the major challenges, resolve the issue(s) and set the organization in a healthy new direction. The board is better able to do so, comfortable in the knowledge an exceptionally skilled individual is focused on the organization’s needs while the key issues or projects are addressed, and without the political pressures upon the interim staff leader that will often beset a full-time employee. In short, the organization has the right skills and objective counsel at a time when it is most needed.

Here are two interim leadership examples that were catalysts for positive change in each nonprofit organization.

Example one: A healthcare organization that had a series of chief staff executives over a short period of time. The executives knew their work well. One was a lawyer. Another was fully conversant in the key issues such as health care regulation. What none of these executive directors did well was handle a board that liked to micromanage. Let the board and individual directors do as they please? Train, correct, and reinforce with the volunteers what should be and is best governance practice? These tactics didn’t work and the executives were either fired or quit in frustration. To the credit of the board chair, who knew the situation was unsustainable and would never be tolerated in the business world from where he came, the board was persuaded it needed to focus internally and get its own governance house in order. An interim executive director was hired; initially for an undetermined period of time but in total it became eight months. The CEO who was eventually hired on a permanent basis arrived to an organization that had identified its issues, was committed to its own rehabilitation, and had created a new plan and started on the journey. As evidence that the time to reflect and bring about change was well spent, the [new] CEO is still in the position after ten successful years.

Example two: A national charity working on an important cause impacting children. The recently departed CEO had retired after many years of building the organization; in many ways it was his own and he was credited for its influence and growth. The board was populated with very smart, accomplished people from all walks of life – parents, government officials, executives in business, related nonprofit organization leaders. The board recognized this was a pivotal time of leadership transition. The mark of the former CEO was everywhere and a bold new plan was needed. However, the board further recognized that the right plan would take time for stakeholder engagement, research, wide consultation, and strong consensus among existing funders, staff, and volunteers that the changes made sense. The board engaged an interim executive director to keep the organization moving forward and the staff motivated while the board defined the future plan. In less than one year, the plan was set and a new executive director was hired to bring about its execution.

Who to choose?

In my experience, interim leaders are seasoned, highly qualified executives with a broad spectrum of relevant experience to offer to the organization. They should be leaders and recognized by their peers as such. The organization engaging the CEO should be seeking an exceptional individual who can keep the organization on the track but who, when asked, can provide truly transformative counsel (and be tough without reservation when that’s called for). They should be productive and efficient. Their experience profile must include prior roles at the CEO level (and an extraordinary leadership track record), knowledge of and experience with the issues the client organization faces, and a professional network of the highest order that can be tapped to help with those issues. The interim leader should also have interim management and/or organizational consulting experience. At a minimum, they will have significant CEO experience in the nonprofit sector, ideally coupled with other experience whether in business, government, and on boards.

It is not unusual for the interim staff leader to be part-time, for example, on site a few days each week. Partially this is due to the cost of interim leadership services (e.g., 60% of a $250,000 executive is more manageable) but there may be and are other good reasons to not have the interim CEO in the office at all times, for example because it gives the rest of the staff opportunity to demonstrate their potential and “step up”. Regardless of the time commitment, the arrangement with the interim CEO will ensure that he or she is accessible at all times as needs arise – whether the need is from the board or an employee of the organization. He or she must also be 100% focused on the organization’s needs.

Of added benefit, the interim leader also becomes a resource when the new CEO is hired. The interim leader can provide insight, counsel, and even coaching to help the new staff leader come up to speed quickly on key issues and deliverables.

A number of consultants and firms who are profiled in the CharityVillage Marketplace provide interim management services (my firm does not). There may be other excellent prospects from the ranks of the recently retired.

The volunteer leaders of charities and associations may well find themselves faced with a need to hire at the senior staff level at the same time as needing to conduct a serious exploration of the organization’s future, culture, and/or governance approach. Interim CEO leadership is an excellent resource to be considered to help the organization through that transition and evaluation while maintaining the momentum, energy, and quality work stakeholders will always expect.

Content is © Jack Shand and is reprinted with permission.

Jack Shand, CMC, CAE, is president of Leader Quest, a management consulting firm providing expert advice to not-for-profit organizations since 1997. Leader Quest specializes in executive search/staff recruitment, strategic planning, governance, and organizational reviews. Jack can be reached at 905-842-3845 and 1-877-929-4473, or jack-at-leaderquest-dot-com.