Recently FaithSearch Affiliate Partner Rick Fisk penned an article on succession planning. Fisk formerly served for thirteen years as President & CEO of Covenant Retirement Communities (CRC), the fifth largest faith-based, not-for-profit serving the senior living industry.
“Succession Planning for Not-For-Profits” by Rick Fisk
Succession planning for many not-for-profit organizations is a lot like weight-loss plans for many individuals. The intention is good; the desire is to make it happen but getting it done is difficult. For organizations that do get started on a plan, sustaining the effort long-term is where the real work is required.
When most organizations begin succession planning the initial focus is often internal. Who do we have in our organization that we would consider to fill certain positions? The next consideration is usually what do we need to do to assure that the person identified in the succession plan is prepared when an opening does occur?
When a not-for-profit organization is faced with filling senior level/C-Suite positions, the succession plan is a useful starting point. However, most organizations do take the opportunity of a senior level opening to also evaluate external candidates. Many times the constituents of an organization want an external vetting process to take place, assuring the best candidate for the position is selected. While it is often difficult for an internal candidate to endure such a vetting process, if they are selected at its conclusion, they are rewarded by knowing they indeed are the best person for the job and can proceed with confidence.
Most succession plans do not give enough consideration to this external component of the process. What is happening within the not-for-profit’s “industry” can have considerable impact upon the organizations efforts to find candidates who are not only technically qualified, but also fit with the organization’s mission and culture.
A brief look at what is happening with not-for-profit CEOs within the senior living industry can provide some insight on an organization’s effort to find qualified external candidates.
The July 2015 Ziegler CFO Hotline survey focused on the topic of Succession Planning and provides some interesting insights.
- Over 33% of CEOs have been with their organizations more than 15 years.
- About 25% of the respondents indicate that their CEOs will likely retire in less than five years.
- It is estimated that within the next 10 years 68% of the CEOs will retire.
- When asked if their organization had a formal written succession plan 65% responded “no”.
From the above numbers it is evident that a not-for-profit senior living organization that is looking for candidates for their CEO position may have a difficult time finding them. Particularly for the larger organizations, the candidate pool is going to be small, and the demand for qualified and experienced professionals is going to be strong. If your not-for-profit also requires strong missional and cultural fit, yet another layer of complexity has been added.
Not-for-profits, especially senior living organizations, need to be aware of what their external industry looks like when planning for their CEO’s retirement. The need for a succession plan that has a long-range view of preparing internal candidates to be ready for positions when they open up is essential. In addition, it is safe to assume that even if most organizations have a strong internal candidate, they will still use the opportunity to interview external candidates to assure the best person fills the position.
Here are some considerations for not-for-profit organizations (especially senior living):
- Understand your external “industry” and the availability of candidates.
- Initiate retirement discussions with your CEO well in advance of their anticipated retirement. Many organizations are asking their CEO for a year or more notice prior to retirement.
- Arrange for a CEO transition period (up to a year) to allow ample time to recruit and orient a new CEO.
- An outside agency will have better access to the candidate pool and be more trusted for confidentiality by external candidates, than your own organization.
- An outside agency can bring an objectivity to the vetting process for both internal and external candidates for a position.
- When there is an industry shortage of candidates, potential hires may need to be considered from related industries.
Get started on your plan and allow ample time for search and transition!
For more information about succession planning in a senior living or post-acute environment, contact Fisk at email@example.com. For more information on FaithSearch’s Post-Acute Division, contact Scott Kuhlman, Senior Vice President, at firstname.lastname@example.org.