Maintaining Service with Leadership Changes: Succession Planning for Economic Development Organizations

Continuity of service is a priority for economic development organizations (EDOs) with a dedicated mission, but a key component of consistency is often missing. Only 29% of EDOs  had a written succession plan in place, according to the 2021 BoardSource Leading with Intent report. Succession planning is crucial for organizations navigating leadership changes and ensures programs and outreach operate normally and fundraising continues on schedule. It also safeguards essential institutional knowledge when unexpected staffing challenges arise. 

Convergent Nonprofit Solutions helps EDOs weather leadership transitions with robust succession planning focused on the financial and operational challenges accompanying organizational shifts.

Succession planning is a must for EDOs

While succession planning is vital for any business and organization, it is essential for economic development entities to rely on a community presence and consistent engagement to secure future funding. A carefully considered plan for addressing planned and unplanned turnover and retirement keeps the organization on track to meet strategic goals and helps maintain a positive work environment in an uncertain time.

Why planning matters for finances

Leadership transitions can create a feeling of instability for individuals and other groups who support an EDO – even when the handoff is carefully executed with abundant training and lead time. Some donors may want to observe a new leader before providing further funding, or a personal relationship with grant-providing organizations can shift with a team loss. These changes are much more challenging to overcome without preplanning and can frustrate new and long-term team members. Establishing a financial runway for transitions helps mitigate the impact of any bumps in the road by:

• Providing funds for interim leadership during an unplanned transition.
• Funding leadership training for existing employees and creating an internal talent pipeline.
• Sustaining essential operations.
• Offering new leadership financial flexibility for establishing new programs or initiatives.

Future planning using a framework like Convergent Nonprofit Solutions’ Investment Driven Model™ (IDM) creates the financial stability needed to succeed before, during, and after a transition by aligning donations with EDO goals.

Formulating a plan

Staff sizes at an EDO can vary greatly, making the scope of succession planning different for each organization. The first step is to identify the most essential roles. Top roles, such as executive directors or assistant directors, are often identified. Still, more nimble organizations may have crucial employees outside senior leadership who must be replaced strategically to maintain satisfactory operations. Some EDOs also develop succession planning strategies for board members. 

A first step for establishing any succession plan is identifying these roles and creating a plan to fill them quickly and effectively as soon as possible. Next steps include:

• Interviewing board members and existing staff to identify points of concern.
• Identifying planned retirements or transitions.
• Drafting emergency procedures for unplanned transitions.
• Documenting key processes. 
• Developing a central repository for vendor lists, donor details, event plans, shared software, organizational passwords, and other essential data. 
• Cross-training staff on core duties. In addition to processes involving sensitive data, multiple employees should know how to execute the essential tasks associated with each job at the organization.
• Developing a communication strategy for planned and unplanned positions.
• Planning for multi-position turnovers as new leadership often sparks further organizational changes. 
• Reviewing the succession plan after any transition to identify pain points.

Addressing significant concerns in advance provides the consistency needed to maintain core operations and progress on key initiatives.

Building a more resilient EDO with Convergent Nonprofit Solutions

Succession planning keeps EDOs resilient when addressing unexpected challenges or planned transitions. Convergent Nonprofit Solutions is here to help with personalized solutions designed to maintain organizational stability. Contact us today to start building your organization's succession plans to sustain its success.