Which Comes First: New Executive or New Strategy?

In our work with organizations approaching an executive transition, we are inevitably asked whether the board should engage first in a strategy development process or first hire the new executive. This is a chicken-or-egg problem that many nonprofits struggle with: a clear organizational strategy informs the priority characteristics that a board desires in a new executive, but a leader needs a certain amount of flexibility to influence strategy around their own vision for the organization as well as their unique strengths.

During an executive transition, should organizations first engage in strategy formation, or should they wait until the new executive is in place?

Our short answer is “neither.” The first step is to advance leadership’s self-awareness. Does the board understand the “special sauce” that results in its success? An executive transition will be more successful if it starts with assessments:

• Can we articulate a clear organizational strategy? Can we describe to the public—and to potential executive hires—how the organization will coordinate and focus its resources over the next several years? Are its priorities for investments and action supported with a clear rationale?
• What are our organizational strengths and needs? Are our programs strong? What is our standing in the community? Are our fundraising and financial reporting systems all we need them to be?
• How effective is organizational leadership? Does the board provide fiduciary oversight, strategic guidance, and generative input? Is the board a valuable thought partner with the executive and with managers? Is there a strong management team beyond the executive that works as a unified team and effectively manages all aspects of the organization?
• What characterizes the organizational culture? Does the board understand the role the executive has played in defining organizational culture? How has the executive defined current decision-making, communications, accountability, and team norms. And of those norms, which are highly effective and which present challenges?

Although conducting this range of assessment may seem like a heavy task, in many situations such a review can be focused and quick in order to allow the organization to proceed without delay. The board should seek to develop just enough information to clarify the critical organizational and strategic needs in a process that is no more intensive than needed to meet hiring purposes. The job description of essentially every executive is to be all things to all people all the time; such a job description does not help the board select for the skills and characteristics in a new executive that the organization needs above all others. A narrowly focused assessment will help the board determine its driving needs when hiring:

• If strategic clarity is high, then prioritize an executive that can execute on that vision. If strategic direction is muddy, then engage in a focused strategy development process before hiring, or else the board will be abdicating its responsibilities. (In the latter case, starting with strategy formation will delay the hiring process, so the board may want to hire an interim director to make sure critical issues are managed before the new hire is finalized.)
• A clear understanding of organizational strengths and challenges can inform the highest-priorities skills the board is looking for in a new executive, for example if the priority for the executive is on program development, external communications, or fundraising background.
  The new executive will be the leader of two leadership teams: board and management. Use what you’ve learned in assessing leadership to look for a new executive that can lift up current team strengths and bring in complementary skills.
• Organizational culture can be more powerful than any strategy, plan, or program. Prioritize personal characteristics in the new hire that will resonate with positive elements of the organization’s culture.

Two examples illustrate this approach.

In one case, an outgoing CEO of a policy-oriented association asked for an assessment as he prepared to retire. Our initial conversations with the CEO and a small number of board members made clear that their strategic direction was clear and did not need to be greatly refined. However, there was a high need to lift up the skills and characteristics of the current CEO that supported organizational success and culture, and to use that analysis to inform the hiring process for the new CEO. We conducted a total of 10-15 interviews with association members and staff, followed by two meetings with the board to analyze the findings and then translate our learnings into a job description.

Working with another client, early conversations with the outgoing CEO and board chair made clear that the organization was facing a range of stressors, from funding challenges to high staff turnover. In that case, the assessment included a comprehensive all-staff, all-board survey; several small group meetings with staff at all levels of the organization; individual interviews with a variety of staff; 2-3 board meetings; and an all-day board-management retreat. The result of the work was not just guidance on hiring a new CEO, but also a work plan for how current management could advance 3-4 priority needs in order to strengthen the organization before any new CEO came on board.

Asking the assessment questions above should provide guidance for sequencing a hiring process and any strategy development needs, so you can move into the hiring process with confidence.