The Center continues to support using an Interim Executive as a best practice in transitioning to new leadership and is proud to have helped launch Interim Executive Network, which is now one of our Industry Experts. Barbara Laur, who sits on the steering committee of Interim Executive Network, provides some helpful insights and guidance to utilizing this option.

 

Interim Executives add value in transition

When I left my last full-time nonprofit executive position after nine years, I felt a duty to stay until the last moment. I was approached at the time by a firm that suggested an interim executive, but I quickly declined. Like many nonprofit executive leaders, I was committed to my organization’s cause and felt I was in the best position to ensure a smooth, positive transition. I was determined to finish the job in the way I thought best and stayed till the next CEO was hired and on board.

Ironically, my next career was as an interim executive. In hindsight, I now see how my dedication to an organization that I loved could have been better served had I left earlier, with an Interim in place. The board could have reflected on the needs of the organization through a “new eyes” assessment from an experienced executive, and had a more open discussion about the kind of leader needed for the “next chapter”. The staff could have had time to adjust to and experience another capable leader, further opening the door to positive change.

Over the last thirteen years, I have served as an interim leader for twelve nonprofit organizations in the Washington, DC area. In the content below, I share some helpful information and what I've learned about interim executive leadership. I join the Center in encouraging executives and board leaders to consider this valuable option, not only when faced with leadership transition, but in developing a transition plan, which every organization should have in place.

Executive level management
An interim executive assumes the role of the executive director during a period of transition, assuring the board that the organization is effectively managed, that no balls are dropped and that day-to-day problems are addressed. Typically the board chooses an interim executive to manage between permanent CEOs, as they search for a new leader. Interim executives may also be used as organizations go through other kinds of transitions such as mergers, maternity leaves or sabbaticals. They are not candidates for the permanent job, freeing them to focus on the organizational needs of the transition.

For the most part, the interim executive does everything a permanent executive would do in terms of day-to-day operations. They make sure that fundraising is ongoing and effective, that finances are managed and audits completed, that staff receive needed supervision and support, and that the board is kept apprised of important developments. An experienced interim is prepared to act decisively when needed and at the same time hold back on decisions and initiatives that are better left for the next executive.

Search assistance
Sometimes the interim executive facilitates the search for a new CEO. If a search consultant is hired, an interim can help in a variety of ways, such as providing logistical support, offering ideas and strategies for an effective search, and assuring that staff are adequately informed and engaged in the process.

Fresh perspective
An interim executive brings invaluable “new eyes” insights. One of the interim’s first tasks is to do an organizational assessment and report back to the board what they have discovered, where they believe change or improvement is needed, and what they think might be accomplished during the interim period. The assessment may include fresh ideas and also may confirm opinions or concerns held by staff or board. It can provide useful guidance about the skills and qualities needed in the next executive, as well as suggest what the new CEO’s priorities might be. Timely projects needed to shore up the organization can be taken on in the interim period.

Interim CEOs are typically less active in three areas:

External activities. Interim executives play a strong role in maintaining relationships with funders, but they are less active in other outside activities, such as media interviews and community/coalition meetings. This provides a great opportunity for other staff—as the continuing “face” of the nonprofit—to be more visible on behalf of the organization.

Long-term direction. An interim executive can help the board assess the current status and report areas that need improvement. However, they are not there to set major future directions for the mission or program, or to shape the organization based on their own perspective. These deliberations await the arrival of the new permanent executive.

Development of relationships with new foundations and major individual donors. These funding sources are generally “on hold” for the new permanent leader. An interim plays an active role in keeping current funding relationships steady; usually funders are reassured when they find an organization has hired an experienced executive for the transition.

Veteran executive director experience: An interim CEO is ideally an experienced nonprofit executive director, well versed in executive level finance, fundraising, personnel and board relations. For an interim, the executive role should be like riding a bike. They have done it before and they know the nuanced relationships required between the executive, the board and the staff. They bring well-honed management skills and knowledge of best practices.

Analytical and strategic expertise: Capable interims have the ability to perform a strategic assessment of the organization—its strengths and the areas that need to be improved for optimal operations. Because an interim is not “trying out” for the job and has experience with a variety of organizations, they can offer an objective assessment and range of recommendations.

A reassuring, confident manner: The interim needs to bring a calm, capable presence that reassures staff, board and stakeholders that the organization can make it through a critical period. They should be avid learners, able to easily receive and synthesize information and adapt to the natural rhythms of the organization.

Interim executives do not typically have specialized knowledge or backgrounds related to the mission and work of the organization; for that, they depend on the programmatic expertise of permanent staff. In the case of a legal organization, for example, they may rely on a legal services director or lead attorneys in a given practice area. While they may not be able to weigh in on legal strategy or specific cases, they can capably coach legal staff on supervision or management issues. Additionally, a person less steeped in the programmatic work can also sometimes offer “out of the box” questions or insights that lend depth to problem solving or planning.

Acting directors are chosen from inside the organization, usually senior staff, to lead during transition. The acting director may or may not be a candidate for the executive position. If they are and do not get the job, they usually go back to their previous role. Acting directors typically focus on “keeping the trains running”.

An interim executive director comes from outside the organization. They are typically seasoned executives and are not candidates for the permanent executive job. In addition to providing day-to-day leadership, they have the experience and skills to help the board assess the organization and take steps to build a stronger platform for the incoming executive.

The board’s first instinct is often to look in-house, either to their senior staff or to board members, for leadership during a transition. However, the board should be aware of the potential challenges of such a choice:

  • Any senior staff person already has a demanding job. They cannot take on the role of the executive without letting go of some major part of their responsibilities or burdening another staff person with them.
  • If a board member takes the position, they run the risk of damaging the fine balance needed between the board and staff. After a permanent executive director is hired, the board member often finds it difficult to “step back” from the day-to-day management of the organization.
  • If the “inside” person is also a candidate for the job, they are “on trial” before they actually hold the position and full authority of a permanent executive. What they say and do may be flavored by their eagerness to attain the fulltime position.
  • Even if the internal temporary leader is not interested in the executive job, their appointment may give the impression that there is an “inside candidate”, possibly discouraging well-qualified applicants.

Most importantly, choosing internally deprives the organization of the insights of an experienced nonprofit executive who brings deep leadership and management experience, and who can share the unique insights gained by seeing an organization close up for the first time. Hiring an interim executive is an investment in a smooth transition, as well as an opportunity to build a stronger organization for the new leadership.

Interim engagements typically last three to nine months, but may range from several months to over a year, depending on the situation. Interim executives typically commit to the full period of the hire and transition to a new person. Interims occasionally work full-time on a salary; most work part-time (usually 20-30 hours a week) at an hourly rate. The non-profit organization’s board negotiates and finalizes the terms with the interim.

Interim executives’ rates are higher than those of permanent executives, due both to the high level of expertise they bring and the temporary nature of the position. Often the cost can be within range of the expense of a full-time executive salary plus benefits.

Board oversight of an interim executive is similar to that of a permanent CEO. A weekly check-in between the chair and the executive is good practice. The interim executive attends and reports at regular board meetings and interacts with other board members and committees as needed.

The board collaborates with the interim on setting priorities. They may have determined some priorities before the interim CEO comes on board. An initial assessment from the interim around four to six weeks provides more information to shape the job. If there are major grants due, upcoming fundraising events, financial audits on the calendar, or other time sensitive priorities, the focus needs to go there first. But the interim usually has time to take on at least a few projects, which put the organization in better shape for the next permanent executive. Interim CEOs, for example, can oversee activities to: revise and assure timely performance reviews, update internal policies, fill critical staff positions, work with the board on governance issues, or make substantial improvements to the financial accounting system.

An increasing number of organizations have succession plans that include an interim executive option. However, many nonprofits are not even aware of the possibility. When a permanent executive announces their departure or loses the confidence of the board, the organization often launches quickly into the transition process. Unless the strategy of using an interim CEO is known by a board member or has been discussed previously, it can be easily overlooked.

As a retiring executive, it can be how hard to let go, and the concept of someone taking your place on a temporary basis may be too unfamiliar. In the intensity of the moment, board members might have be reluctant to consider that option. But organizations can greatly benefit from a space “in between” and from the fresh insights of an experienced leader.

Whether it happens this year or ten years down the road, the departure of the executive director is inevitable. For a more positive transition, make this option part of your discussion and planning around succession.

Interim Executive Network offers an outstanding resource

Not sure how to get started? The Interim Executive Network provides helpful information, resources and free access to a cadre of highly qualified interim executives. IEN was started by a small group of professional interim executives in the Metro DC area approximately 10 years ago. The Network began with informal brown bag lunches with interim professionals, board members and funders. With funding from the Meyer Foundation and support from the Center for Nonprofit Advancement, the Interim Executive Network was launched.

Today, IEN has grown substantially and provides information and resources to board members and organizations interested in engaging an interim executive, as well as mentoring, support and training to people interested in building an interim executive practice. The Center continues to support interim executives as a best practice and is proud to have IEN as one of our Industry Experts.

This article was contributed by Barbara Laur, who sits on the steering committee of Interim Executive Network, with input from interim colleagues, Valerie Graff and Barbra Kavanagh.

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