Leadership Transition: Is Your Organization Prepared?

In a profession that already sees a lot of turnover, many of Iowa’s economic developers will soon be retiring. In recent months IDM has provided technical assistance to several economic development organizations who are facing impending retirements of key staff members. According to a recent PDI membership survey, nearly 20% of the responding economic developers were 60 or over, almost one in five! As economic developers, we know that the retirement cliff is coming in our workforce and we are constantly trying to help our businesses and communities prepare – but what are we doing about our own economic development organization (EDO)? It’s a business too! No matter the reason for a change in key leadership, turnover or retirement, how your EDO manages a transition comes down to being prepared, as current leaders and as a board. 

Planning for leadership changes is critical for any organization, but maybe even more so in EDOs, where many organizations have limited resources and rely heavily on the passion, commitment and expertise of just one or two key employees. Whether referred to as transition planning, succession planning or continuity planning, formal planning for leadership change is easy to put off for multiple reasons: transitions may be years away, finding time in the multitude of important activities is challenging, and sometimes the idea of change is too daunting to consider. But think of it this way, undertaking leadership change planning is an opportunity to enhance the long-term sustainability of the organization, and make your organization easier to “sell” to future key employees. 

There is an overlapping relationship among transition planning, succession planning and continuity planning. And all may be guided by a strategic plan. So, what is the difference? Transition planning is about the turnover of a specific person in a specific role. It is a plan that captures departure tasks and timelines, and includes things such as the projects to be completed before departure, a recap of ongoing and in-progress projects that need to be continued or finished by a successor, and collecting the operational details a successor needs for organizational operations (e.g. bank accounts, passwords, legal documents, investor/member lists, job descriptions, etc.).

Succession planning is best completed well before any transition is started. A succession plan takes a deeper look at the skills and qualifications a candidate needs to fill organizational leadership roles. Succession planning is a time to review and, if necessary, update existing strategic plans to clearly understand what the role should or could be. Position descriptions are updated to reflect the needs of the organization to reach future goals. In addition, a succession plan may include details about upskilling or cross-training other employees, and how a transition process would be managed (communications, candidate screening, interim leadership options, new employee orientation, etc.). 

Continuity planning prepares an organization for any business interruption to ensure that the organization remains a viable ongoing business, no matter the type of disruption. In the case of a key employee transition, such as the departure of an executive director, it is important that the board is able to represent the entity as a desirable organization that a competitive candidate would want to join. A continuity plan is designed to outline the necessary steps to improve a business so that its leadership is prepared for some bumps in the road.

When undertaking a continuity plan, the board has an opportunity to really dig into the health of the organization. Start with an assessment of the current state of the organization.  This assessment should include a review of financial health, programs and services, governance structure, policies and procedures, staff capacity, and fundraising and investment strategies. Then, outline strategies to address issues found through the assessment that could impact future sustainability, such as strengthening governance; enhancing or diversifying financial resources; building staff capacity; strengthening relationships with stakeholders; improving public relations or image building; and updating policies and procedures. Implementing a continuity plan not only strengthens the organization's foundation but also provides a supportive environment for an incoming leader to thrive and lead effectively.

Leadership transitions are inevitable. Whether it's due to retirement, career changes, or other circumstances, preparing for leadership changes is crucial for the continued success and sustainability of any organization. By adopting a proactive and strategic approach, organizations can ensure a smooth transition, maintain organizational stability, and seize opportunities for growth while positioning themselves for success in attracting the right candidate for leadership roles.