Leadership Team Development: Key to Successful Executive Transitions

by Robert B. Bloom, Ph.D.
Executive Director
Jewish Child & Family Services

An alarming percentage of executive transitions fail. Paradoxically, it also seems that the more successful the organization the greater the likelihood of its new executive leaving in less than two years.

Many leaders are ill-prepared to take over due to a lack of appropriate experience, an extremely limited understanding of the organization of which they are assuming the leadership, and a need to make their mark early. With this in mind, I coined Bloom’s Law of Executive Leadership as this: “To be a successful leader, follow a fool; regression to the mean will carry you a long way.”

In addition, many organizations are structured in such a way to make it very difficult for a new leader to succeed. This column addresses the critical issues confronting new leaders and ways the successful organization can maintain and grow under the new leadership—in short, how they can beat the odds stacked against them.

Agency Structure Can Weaken Chances of Success

Some of the key transition problems experienced by organizations, including my own, relate to vertical hierarchy, complexity shock, and lack of bench strength.

Vertical Hierarchy. Vertical hierarchy is a very typical organizational structure, especially for small- to moderate-sized child and family agencies. The structure involves an executive director, associate executive director, and an assistant executive director. The structure is silo-like with essentially congruent responsibilities differentiated more by power than diversity of activity.

The executive in this situation does not have to coordinate the activities of others or build a team. It is typically a downstream management structure with most managers reporting directly to the executive director, or needing his or her approval to take action.

The problem with this structure can be illustrated by my own personal example. When I assumed my executive director position at Alliance for Children and Families member Jewish Child & Family Services, Chicago, my predecessor had been terminated months before. Both the associate and assistant executive directors resigned upon my hiring. There was nobody left with leadership experience in an executive role.

Complexity Shock. Circumstances such as the one I found myself in can give way to what I term complexity shock.

Given the several weeks the agency experienced without any executive leadership, by the time I arrived I was confronted with stacks of mail, much of which I did not understand or know how to handle. I made my first, and arguably my most important, executive decision: I would deal with what I understood and throw away the rest. If it were truly important somebody would follow up.

The first day on the job I learned that running a division with the same number of employees and the same budget at a much larger agency was wholly inadequate preparation for managing the multitude responsibilities of a CEO. A division or program director typically does not have an agency-wide view or responsibilities such as board work, fundraising, major agency-wide policy decisions, and comprehensive agency budgeting.

Lack of Bench Strength. Most successful social service agencies operate on a very tight administrative budget. They are typically lean and mean, which means they have very little, if any, redundancy in executive competencies.

Thus, in my transition I found that all the staff was pigeon holed. Residential staff did not communicate with outpatient staff. Foster care staff didn’t work with group home staff. Students in the therapeutic day school were split into public and private with no common curriculum, philosophy, or management. No authority was vested in site managers; day-to-day operations were centrally determined. Accounting was not accountable to managers. Everybody had their own niche and performed in response to central office directives.

Wanted: Organizational Stability

Obviously much work needed to be done. The conditions into which I entered made it likely that we would fall into the same trap I mentioned earlier in this column—the trap of successful organizations losing their new executives in less than two years.

Organizations can decrease those chances through practices and activities that provide organizational stability at each stage: creating an effective organizational structure, developing the leadership team, preparing for transition, and bringing the new executive on board.

How to Create an Effective Structure

Create a Diversified Executive Team with Interweaving Responsibilities. The first step for us, and for any organization that wants to diversify its vertical hierarchy structure, was to find the best people in your organization and create a horizontal leadership team. This structure allows everybody to know what is going on throughout the agency and have conjoint responsibility for it.

Peter Drucker, widely considered the father of modern management, says the effective executive gets the knowledge needed by asking what needs to be done and what’s right for the organization. He or she converts this knowledge into action by developing action plans, taking responsibility for decisions and communications, and focusing on opportunities not problems. Finally, he says the effective executive ensures agency-wide accountability by running productive meetings and saying “we” not “I.”

The organization that can beat the odds makes sure that its executive team functions like Drucker’s effective executive.

Put the Power Where the Action Is. The organization that can beat the odds will have program managers and directors who are given the authority and resources to manage and meet their responsibilities. The executive team develops the parameters and establishes what needs to be accomplished; the managers then develop the processes and activities.

When the executive and the managers disagree on how to proceed, if the managers have a well thought-out position and are responsible for the implementation, do it their way. If it doesn’t work, come back to the table and rework it; no “I told you so” allowed.

Decentralized management is messy. Much of the executive team’s responsibilities will be to develop ways to manage the clutter without interfering with onsite leadership’s ability to function.

Create a Depth Chart. Like a National Football League head coach, determine what your supervisors and managers are capable of doing. Identify leadership potential. Provide for growth and development by giving managers responsibility for agency-wide tasks outside their parochial areas of control and responsibility. Know who you would move if key personnel leave or are promoted.

Developing the Leadership Team

Train Management Team in Executive Leadership. Plan for a retirement long before it even happens. At my agency, the board agreed that I should develop a program with the school of social service administration at the University of Chicago as part of our long-term staff development and transition needs.

The school provided formal course work in management and leadership, and I developed a series of seminars with executives across the state and nation who met in informal discussions with our management team.

My board and I recognized that most agencies have no transition plans and no long-term leadership development plans—nothing. We wanted to be prepared for change when it happened again in the future.

After they received training from the school of social service administration, our management team was then given increased responsibilities in all areas of management. It was a way for us—and for any organization who also begins to plan for change in advance—to begin empowering the management team by having the executive who’s contemplating leaving the agency—even if the target date is still years down the road—“give away” many parts of his or her job.

This can also be a time of growth and development for the current executive, as he or she needs to spend less time on operational issues and can focus more on community, state, and national issues.

Cultivate Close Relationship Between Executive Team and Board Executive Committee. Executive team members, not the CEO, should staff various standing and ad hoc committees of the board. Key members of the team (CFO, COO, etc.) should participate in executive committee meetings of the board and assume more and more responsibility for the committee’s activities.

The CEO should slowly and steadily move further into the background as the other key officers are seen to be managing the day-to-day operations of the organization.

Develop a Multiyear Strategic Plan. In addition to the usual reasons for a strategic plan, it can also be used to create a synchronous working relationship between the staff and the board. The traditional SWOT (strengths, weaknesses, opportunities, and threats) analysis will provide the board with a job description for the new executive. The strategic plan will clearly indicate the key role of the executive team and the essential verities that the agency does not want to change.

And, of course it will scope out new directions. This will provide the new leader with ample opportunities to make his or her mark without undoing what has been successful and undermining the executive team. It’s the classic example of leading by finding out which way the parade is marching and getting out in front of it

Preparing for Transition

Inform Your Search Consultant. Inform your search consultant of your view of the executive team and provide a copy of the strategic plan to be used in shaping recruitment and interviewing materials and strategies. This will literally have everybody on the same page and provide a very clear picture of the agency and the job to be done for the new executive.

Insure the Executive Team has a Role in Setting Expectations. Involve the executive team in establishing expectations for the new executive and in the final interviewing process of the top candidate(s). Buy in from the executive team will greatly enhance your chances of beating the odds.

Bringing the New Executive on Board

Infuse New Ideas While Building on the Past. Differences in personality and management style between current and incoming executives can prove to have very positive, constructive potential for the leadership staff. To energize rather than destabilize the leadership team, the new executive needs to recognize the value of the staff’s historic knowledge of why things run the way they do and why key management decisions were made. This will allow the new executive to build on the past.

Create an Alliance Between New Director and Leadership Staff. The new director must recognize the dynamic attendant to transition from a long-standing, respected executive. Dealing with senior staff comfort levels in this setting requires close attention to introduction and communication, as well as a great deal of understanding between the current executive and the board of directors.

Upbeat, Supportive Attitude from Current Executive. The way the current executive manages the transition will be a clear precursor to the success of the transition. Outgoing executives should lend as much support to the new executive as requested by the incoming leader, no more, no less.

From the moment he or she has come to an agreement with the board it is the new executive’s agency. The terminating executive’s role is to support the new leader and encourage the leadership team to transfer their allegiance to the new executive.

Beat the Odds

There are no guarantees for successful transitions. But developing a strong leadership team, creating a plan for development, and supporting leadership—new and old—through the change will give your agency its best chance to beat the odds.