Founder’s Syndrome: How Corporations Suffer — and Can Recover

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    Founder’s Syndrome: How Corporations Suffer — and Can Recover

    © Copyright 1995 Carter
    McNamara, MBA, PhD, Authenticity Consulting, LLC
    .
    Adapted from the Field Guide to Leadership and Supervision in Business
    and Field Guide to Leadership and Supervision for Nonprofit Staff
    and Field
    Guide to Developing, Operating and Restoring Your Nonprofit Board
    .

    Also consider

    Other Related Online Articles
    Related Library Topics

    Introduction

    This syndrome occurs when, rather than working toward its overall mission,
    the organization operates primarily according to the personality of a prominent
    person in the organization, for example, the founder, board chair/president,
    chief executive, etc. The syndrome is primarily an organizational problem
    — not primarily a problem of the person in the prominent position. This manual
    happens to focus on the situation where the organization works according to
    the personality of the founding chief executive. However, it could be in regard
    to, for example, a Board Chair who came along after the founder had left —
    the symptoms and actions to recover are essentially the same.

    Table of Contents

    Preface

    Founders’ Syndrome: During Tenure of Founder

    A Typical Problem in Small Organizations
    Some Troublesome Traits Among Founders
    Typical Traits of Well-Developed Leaders
    Basic Principles in Developing Leadership
    Actions Boards Must Take
    Actions Founders Must Take
    Actions Staff Might Take
    Summary

    Transitioning to a New Chief Executive

    Founder’s Syndrome: When New Chief Executive Replaces Founder
    Typical Symptoms
    Actions Boards Must Take
    Actions New Chief Executive Must Take Before Taking the Job
    Actions New Chief Executive Must Take After Taking the Job
    What if Founder Left the Organization in a Mess?

    Appendix A – Procedure for Transitioning to a New Chief Executive

    Other Related Online Articles


    Preface

    I learned a great deal about Founders’ Syndrome while facilitating various
    Leaders Circles meetings, starting in 1995. A Leaders Circle is a peer-based
    development program that I developed in 1995, which includes five to seven members
    who meet regularly to share coaching for ongoing support, problem solving and
    networking. (Leaders Circles is a registered trademark of MAP for Nonprofits
    in St. Paul, Minnesota.)

    I used the phrase Founders’ Syndrome to describe the set of symptoms that I
    noticed among struggling founders of organizations. I’m not sure where I got
    the phrase, whether I noticed it in literature or it came to my mind. At the
    time, it seemed like an appropriate phrase, but I’ve since come to regret using
    it because it’s an organizational problem, not a personal problem.

    I wish to thank Joan Wells, Executive Director of Resources and Counseling
    for the Arts in St. Paul, Minnesota. She suggested that the syndrome be the
    focus of a workshop held by her organization. I developed and organized many
    of the ideas for this booklet in preparation for the workshop. I also wish to
    thank Joan for contributing the section “What New Chief Executives Must
    Do Before Taking Job”, as well as contributing several other key insights
    throughout this booklet. I also with to thank the editors of the Nonprofit
    World
    who allowed me to continue to share portions of this booklet that
    were also published in my article in their November-December 1998 issue.

    This booklet may be freely distributed. The booklet should not be used for
    commercial purposes, i.e., to generate profits without the express written consent
    of the author. The booklet is available on the World Wide Web at https://managementhelp.org/misc/founders.htm


    Founders’ Syndrome: During Tenure of Founder

    A Typical Problem Among Small Organizations

    · To continue to meet the needs of their customers,
    organizations must evolve through a particular life-cycle change.

    · This change is from typically entrepreneurial, seat-of-the-pants
    growth to well-planned and managed development.
    · However, this development cannot occur without first
    establishing a stable administrative infrastructure.
    · Developing this infrastructure often requires a change
    in the nature of the founder’s leadership from that of a highly
    reactive, individualistic style to a more proactive, consensus-oriented
    style.
    · Many founders cannot make this transition. As a result,
    the organization remains managed, not in a manner that provides
    reliable services to customers, but according to the personality
    of the founder.
    · Often, the organization experiences the same problems
    over and over again. For example, plans are not implemented. Money
    keeps running out. Board and staff members quickly come and go.
    The organization struggles from one crisis to another. No one
    really seems to know what’s going on. People become afraid of
    the founder.
    · Founders Syndrome is no one’s fault — no founder sets
    out to damage their organization. Besides, the syndrome rarely
    takes hold without numerous members of the Board and staff exhibiting
    symptoms of the syndrome.
    · Eventually, stakeholders confront the founder about the
    organization’s recurring problems (if the organization is a nonprofit,
    funders often will confront the chief executive or board). Often,
    the founder becomes increasingly anxious and defensive, and soon
    resorts to blaming Board members and staff (nonprofits also blame
    funders). Without ongoing coaching and support, it’s likely that
    the founder will be replaced, or even worse, the organization
    will fold.
    · There are actions that founders and Board members can
    take to avoid these tragic outcomes. Start simple, but start.

    Some Troublesome Traits Among
    Founders

    Founders are dynamic, driven,
    and decisive. They carry clear vision of what their organization
    can be. They know their customer’s needs and are passionate about
    meeting those needs. Often these traits are strong assets for
    getting the new organization off the ground. However, other traits
    of founders too often become major liabilities. For example, founders
    often:
    · Are highly skeptical about planning, policies, and procedures.
    They claim “they’re overhead and just bog me down”.
    They often believe they’ve found a new way to get things done.

    · Make reactive, crisis-driven decisions with little input
    from others. React to most problems with the lament “if only
    I had more money.”
    · In the case of nonprofits, executive directors attend
    mostly to fundraising and generating new ideas for services.
    · Hand-pick their Board members and staff. See these people
    as working for the founder as much as working for the organization’s
    mission.
    · Attract Board members through founder’s dynamic, often
    charismatic personality — not through focus on organization’s
    mission.
    · Count on whomever seems most loyal and accessible, and
    motivate by fear and guilt, often without realizing it.
    · Hold occasional staff meetings to report crises and rally
    the troops.
    · In the case of nonprofits, executive directors usually
    see their Boards mostly as a source for fundraising, and work
    to remove Board members who disagrees with founder.
    · Have a very difficult time letting go of the strategies
    that worked to quickly grow the organization, despite evidence
    that the organization can no longer absorb this rapid growth without
    major changes.
    · Ultimately, Founders Syndrome sets in because the organization
    becomes dependent, not on the systems and structures of the organization,
    but on the unique style of the leader — whether the leader is
    consistently decisive or consistently indecisive.

    Typical Traits of Well-Developed
    Leaders

    Leaders of lasting, well-developed
    organizations have experienced numerous changes, and managed to
    develop their organizations and themselves along the way. Developed
    leaders:
    · Appreciate plans and budgets as guidelines, and realize
    these ultimately make their organizations more responsive to the
    needs of their customers.
    · Make proactive decisions based on mission and affordability.

    · Make staffing decisions based on responsibilities, training,
    and capabilities.
    · Value Board and staff members for their strong expertise
    and feedback.
    · Sustain strong credibility among customers and service
    providers.

    Basic Principles in Developing
    Leadership

    Eventually, most founders
    realize they must change the way they operate. Many go on to develop
    their leadership style to the next level. First, they realize
    they must change from within. They:
    · Understand that the recurring problems are not their
    fault — they’re doing the best they can.
    · Are willing to ask for and accept help.
    · Communicate often and honestly (this is sometimes difficult
    for crisis-driven, “heroic” leaders).
    · Engage in stress management, especially forms not related
    to their jobs.
    · Are patient with themselves, their Boards, and staff.

    · Regularly take time to reflect and learn, particularly
    about their value in service to others.

    Actions Boards Must Take

    · Making this change in leadership style is
    often confusing, lonely, and stressful for the founder. The Board
    can be the founder’s greatest help.
    1. Understand and take full responsibility for the role of
    Board member.
    Insist on focused Board training to review the
    roles and responsibilities of a governing Board. Undertake a yearly
    self-evaluation of the Board to ensure it is operating effectively.

    2. Once a year, conduct a key risk management exercise:
    pretend the founder suddenly left the organization. Who will/can
    quickly step in? Are you sure? What activities are the staff really
    doing to carry out programs? In the case of nonprofits, what grants
    does the organization have to perform against and when report
    them? What is the cash flow situation? What stakeholders must
    be contacted? Where are the files/records?
    3. Know what’s going on in the organization or how to quickly
    come up to speed.
    Ensure job descriptions are up-to-date.
    Have staff complete weekly or biweekly written status reports.
    Ensure yearly written performance reviews are completed. Ensure
    regular staff meetings are held and actions are written. Is a
    staff member being cultivated as an assistant chief executive?
    Is this needed?
    4. Strategic planning is one of the best ways to engage the
    Board and take stock of the organization.
    Conduct regular
    and realistic strategic planning with the Board and staff. Focus
    on the top three or four issues facing the organization. Although
    most organizations scope plans to the coming three years, focus
    careful planning on the next 12 months. Establish clear goals,
    strategies, objectives, and timelines.
    5. Develop highly participative finance committees (in the
    case of nonprofits, develop a fundraising committee, too).

    Too often, Boards are extremely reluctant to face the founder
    by getting involved in finances. However, troubles with a chief
    executive’s performance are often revealed in financial problems.
    If a chief executive struggles or leaves, finances are usually
    the first to become major problems. Therefore, closely review
    regular cash flow, income and balance statements.
    6. Don’t be part of the problem! Don’t take on
    the traits of the crisis-driven founder and staff, or worse yet,
    just “numb out.” Meet consistently and make decisions
    based on mission, planning, and affordability, not on urgency.
    Avoid the notion of any quick fixes, such as hiring an associate
    director with “people skills.” This doesn’t address
    the problem and may make things even worse.
    7. Help Board members and staff to keep up their hopes.
    Regularly communicate with each other (through appropriate channels).
    Remind each other that the recurring problems are the result of
    the organization’s success and that current changes are to best
    serve the needs of its customers. Note that staff members’ morale
    will improve as they perceive stability, security, and progress.

    8. Support the founder with ongoing coaching and affirmation.
    The founder will change to the extent that he or she feels safe,
    understands the reasons for change, and accepts help along the
    way. Consider a Board Personnel Committee to provide ongoing coaching
    to the founder (but not to replace his or her responsibilities
    and accountabilities). Include at least one or two experienced
    organizational leaders on this committee. Note that the founder
    is not changing roles, but priorities.
    9. Carefully monitor implementation and deviations from plans.
    Don’t hold the founder to always doing what’s in the plan or budget
    — but do hold him or her to always explaining deviations and
    how they can be afforded.
    10. Implement development and evaluation plans for the founder.
    Include his or her input. Be consistent with the founder’s accountability
    to implementing the plans or explaining deviations from them.
    Evaluate the founder according to meeting strategic objectives
    and to his or her job description.
    11. Consider policies to carefully solicit feedback from staff
    to Board.
    Consider having staff representatives on Board committees.
    Consider a 360-degree evaluation process for the chief executive,
    wherein staff provide feedback about the chief executive’s performance.
    Establish a grievance procedure where staff can approach Board
    about concerns if they can prove they have tried to work with
    the chief executive to resolve these issues.
    12. Closely monitor key indicators of successful change.
    Ensure ongoing communications between Board members and the founder,
    sound financial management, implementation of plans and policies,
    and stable turnover of staff. Perhaps the most useful indicator
    is continued positive feedback from customers.
    13. If problems recur, take action. If, after attempting
    to follow the above suggestions, the same major problems recur
    over the next six to nine months, then take major actions regarding
    the founder’s position in the organization. If the founder’s leaving
    would cause the organization to fold, then the Board has not been
    doing its job all along. The Board should be strongly involved
    in strategic planning, financial management, (in the case of nonprofits,
    fundraising), authorizing policies, reviewing programs, evaluating
    the chief executive, etc.

    Actions Founders Must Take

    · The major actions below are intended to help
    the organization become more stable and proactive. Each organization
    follows the practices according to its own needs and nature. They
    are not developed overnight and are never done perfectly. Start
    simple, but start!
    1. Accept a mentor outside the organization and an advocate
    within.
    Founder’s syndrome comes from doing what’s natural
    for you. Changing your leadership approach may be rather unnatural.
    Seek and accept help.
    2. Ensure a customer-driven organization. Always focus
    on customers. Regularly ask customers what they need and how the
    organization can meet their needs. Establish straightforward and
    realistic means to evaluate services. Start with basic questionnaires
    to gather customers’ impressions. Interview some customers to
    get their “story”.
    3. Set direction through planning. Support the Board to
    carry out strategic planning. Ensure staff input as well. Conduct
    regular staff meetings to hear staff input. Cultivate strong finance
    (and in the case of nonprofits, fundraising committees), and help
    them to fully understand the organization’s finances and fundraising
    plans.
    4. Organize resources to meet goals. Develop job descriptions
    with staff input to ensure mutual understanding of responsibilities.
    Develop staff-driven procedures for routine, but critical tasks.

    5. Motivate leadership and staff to meet goals. Delegate
    to staff members by helping them understand the purpose of tasks.
    Get their input as to how the tasks can be completed. Give them
    the authority to complete the tasks. In regular staff meetings,
    celebrate successes! Bring in customers to tell staff how the
    organization helped meet their needs. Conduct regular performance
    reviews with staff to ensure organizational and staff needs are
    being met. In regular staff meetings, share status information
    and conduct day-to-day planning.
    6. Guide resources to meet goals. Share management challenges
    with the Board and ask for policies to guide management. Work
    from the strategic plan and develop an associated budget to earmark
    funds.
    7. Think transition! Help the Board to regularly undertake
    contingency planning, including thinking about what the organization
    will do if/when you’re gone. Have the Board pretend that, for
    some unknown reason, you were suddenly gone. What would they do?
    How?

    Actions Staff Might Take

    · Staff can play a major role in helping the
    organization to recover. However, staff may be in somewhat of
    a high-risk situation because the founder (who often values loyalty
    at least as much as effectiveness) may perceive staff actions
    as hurting the organization, rather than helping it. Therefore,
    staff are advised to proceed with caution.
    · The syndrome can be quite stressful for staff. They can
    lose perspective amidst the continued confusion and anxiety in
    the workplace. If they’ve been in the organization long enough,
    they, too, become part of the problem. Therefore, it’s important
    for staff to get perspective on the nature and extent of the problem.

    · Work hard to identify an external mentor and an internal
    staff advocate. Bounce ideas off of someone else who’s judgment
    you highly revere.
    1. Get clear perspective on your concerns by privately writing
    down what you perceive to be major problems in the organization.

    Privately record your concerns. In order to minimize your own
    biases, record only what you have seen with your eyeballs. Record
    only those problems which seem to be persistent and/or which various
    people have tried to resolve but have been unsuccessful.
    2. Match your recorded list of problems with those listed in
    the section “Some Troublesome Traits Among Founders.”

    How many of the symptoms match those recorded in your list?
    Consider sharing your list and results with someone whom you trust.
    Do they agree with your approach and results? It’s up to you to
    conclude if the organization has the syndrome or not. Whether
    the organization has the syndrome or not, if there are enough
    other persistent problems, you may still want to take action.

    3. Assess if you want to stay in the organization and help
    it recover.
    This requires that you carefully reflect on why
    you’re in the organization, what you can do to help the organization
    recover, the likelihood of it recovering and how well you manage
    your own stress.
    4. If you elect to stay in the organization and try help it
    to recover, use the organization’s structure.
    That is, communicate
    your suggestions with peers and your immediate supervisor, whether
    that’s the founder or not. Give them a chance to address your
    concerns. Promptly go to the Board only if symptoms of the problem
    result in discrimination or harassment of you and your personnel
    policies include a grievance procedure for you to go directly
    contact the Board. You might consider a letter to the Board if
    you resign, but this may burn bridges for you.
    5. Provide various suggestions from those listed in the sections
    “Actions Board Must Take” and “Actions Founders
    Must Take”.
    Don’t provide all of the suggestions at once.
    Always associate your suggestions with description of how they
    can constructively advance the mission of the organization. Don’t
    personalize your descriptions of concerns by blaming them on someone.
    Make your suggestions in writing, e.g., in status reports, in
    memos. Date the suggestions so can keep perspective on whether
    the suggestions are acted on or not. Tactfully share copies of
    this booklet.
    6. Monitor whether the organization is recovering or not. Have
    you given the organization time to address concerns? Has the organization
    made substantial changes and the symptoms have decreased? Or,
    do you see the same symptoms over and over again?
    7. Update your resume and consider looking for another job.
    Keeping your own health and happiness is the best thing you can
    do for yourself and the community. You’ll become ill if you stick
    around in the organization. Your leaving may actually contribute
    to the organization’s recovering if other staff realize why you
    left.
    8.
    Don’t
    burn bridges.

    It’s extremely
    compelling to write a blistering letter to all members of the
    board and various staff, explaining each and every problem in
    the organization. This may temporarily relieve you of your frustration,
    but it may also hurt your credibility with key members of the
    organization’s community. If you communicate your concerns and
    reasons for leaving, be respectful and tactful.

    Summary

    · It may be that the
    founder’s greatest gift is converting a dream to reality by inspiring
    others with the ability to keep the dream real (and they will
    have their dreams, too!).
    · In that case, the best thing for him or her may be to
    leave the organization once that dream is real, when the dream
    evolves an organization that others should take forward.
    · However, no great leader leaves without ensuring their
    organization survives their leaving.
    · A sound transition plan, mutually developed with Board
    and staff, ensures the organization is passed on to capable hands.

    · Hopefully, the founder stays and goes on to see the organization
    become a stable and well-respected organization — an organization
    with a resilient and far-sighted leader who embraces change and,
    most importantly, knows how to manage it.


    Transitioning to a New Chief
    Executive

    · A great deal of struggle and stress may be
    alleviated for the new chief executive if the Board effectively
    handles the transition to the new chief executive.
    · The following key Board activities will particularly
    help the new chief executive to get started in an effective fashion.

    · More detailed suggestions are included in Appendix
    A, “Procedure for Transitioning to a New Chief Executive”.

    1. Ensure the Board has a strong idea of what it wants in a
    new chief executive.
    Be wary of the strong tendency to define
    the new chief executive in terms of what the founder was or wasn’t.
    Instead, hire a new chief executive based on the organization’s
    current needs, e.g., financial skills, personnel/supervisory skills,
    (and in the case of nonprofits, fundraising skills), planning
    skills, program skills, etc. Rank the skills in priority order
    and update the chief executive job description accordingly. Design
    the job ad from the job description and reference the description
    when developing interview questions as well.
    2. Before the new chief executive begins employment, send them
    a letter welcoming them to the organization,
    verifying their
    starting date, providing them a copy of the employee policies
    and procedures manual, and providing a copy of the strategic plan
    and financials. (This can be included in the offer letter.)
    3. The Board should send a letter to key stakeholders. The
    letter would announce the new chief executive, when he or she
    is starting, something about their background and why it’s useful,
    etc., and asking them to call the Board chair if they have any
    questions or concerns.
    4. Meet with the chief executive to brief them up to speed
    on strategic information.
    Review the organization chart, last
    year’s annual report, the strategic plan, this year’s budget,
    and the employee’s policies and procedure manual if they did not
    get one already). In the same meeting, explain the performance
    review procedure and provide them a copy of the performance review
    document.
    5.
    When
    the new chief executive begins employment (or before if possible),
    introduce them in a staff meeting dedicated to introducing the
    new chief executive.

    If the
    organization is small enough, have all staff attend and introduce
    themselves. If the organization is larger, invite all managers
    to the meeting and, along with the new chief executive, have each
    manager introduce themselves.
    6. Invite the new chief executive to a social event with Board
    members.
    This can greatly help to establish a comfortable
    rapport for the new chief executive.
    7. Ensure the new chief executive receives necessary materials
    and is familiar with the facilities.
    Ensure an assistant gives
    them keys, gets them to sign any needed benefit and tax forms.
    Review the layout of offices, bathrooms, storage areas, kitchen
    use, copy and fax systems, computer configuration and procedures,
    telephone usage and any special billing procedures for use of
    office systems.
    8. Schedule any needed training, e.g., computer training,
    including use of passwords, overview of software and documentation,
    location and use of peripherals, and where to go to get questions
    answered.
    9. Review any policies and/or procedures about use of facilities.

    10. Assign a Board member to them as their “buddy”
    who remains available to answer any questions over the next four
    weeks.
    11. Have someone take them to lunch on their first day of work
    and invite other staff members along.

    12. During the first six weeks, have one-on-one meetings (face-to-face
    or over the telephone) with the new chief executive,
    to discuss
    the new employee’s transition into the organization, hear any
    pending issues or needs, and establish a working relationship
    with the new chief executive.

    Founder’s Syndrome: When New Chief Executive Replaces Founder

    Symptoms Depend On Nature of Founder

    a) Highly entrepreneurial in nature; quick to do things
    without planning; value loyalty; very high energy (this situation
    is basically what we talked about earlier in this packet)
    b) Or, highly administrative; highly valued paperwork
    and extensive planning and detail (this situation is less difficult
    for the new chief executive to overcome because Board and staff
    focus on organizational structures and processes rather than the
    founder)
    c) Or, synergistic; accomplished a good balance between
    entrepreneurial and administrative natures

    Also Depends on Nature of the Founder’s
    Exit, Including They:


    a) Wanted to go on to do different
    things
    (usually they leave the organization in very good condition
    for a successor)
    b) Or, were overcome with some large organizational problem
    and wanted to just get out (often the new chief executive
    is received very well, almost as if a hero; however, the new chief
    executive must resolve the problems which caused the original
    chief executive to leave)
    c) Or, were fired by the Board (much depends on if the
    staff had strong issues with the chief executive or not; if the
    staff disagreed with the Board’s decision to fire the chief executive,
    the new chief executive has a major challenge to earn staff loyalty
    and earn credibility)
    d) Or, died or became very ill (the new chief executive
    may not be taken seriously; the Board must be clear to recognize
    the accomplishments of the founder, including some ritual or benchmark
    activity, and then support transition to a new chief executive.)

    e) Others?

    Typical Symptoms

    · These can occur alone or in combination.
    1. Board members seem detached from the organization, are burned
    out from trying to change the founder and/or firing him or her,
    and just want the new chief executive to make everything better
    now (they treat the new chief executive as a quick fix).
    2. Or, Board members micro-manage the new chief executive because
    Board members feel burned or lied to by the founder, are highly
    critical to any new actions for fear of making a major mistake,
    and ultimately don’t trust the new chief executive.
    3. Or, Board members find themselves continually comparing the
    new chief executive’s plans and activities to what the founder
    did, rather than to the organization’s mission and established
    plans. New chief executive is working to founder’s “ghost”.

    4. Staff seem reluctant to implement the new chief executive.’s
    ideas; they respond with “Jack (the previous chief executive.)
    didn’t do it that way”.
    5. Or, staff are eager to do everything the new chief executive
    says without any staff input, with the hope that the new chief
    executive will make everything better.
    6. Or, the new chief executive initiates new ideas and plans in
    the name of the founder. “It’s what he or she would have
    done.”
    7. Or, the new chief executive keeps commenting to the effect
    “I don’t want to hear about (the founder) anymore. Now we’re
    doing things my way.”
    8. There’s a lot of blaming, etc., of the previous chief executive,
    or, if the founder was fired, there may be the staff’s blaming
    of the Board.
    9. Board members and/or staff continually suggest that the founder
    be consulted about the new chief executive’s ideas or plans.
    10. Founder keeps calling staff or Board members to see “how
    it’s going.”

    Actions Boards Must Take

    · The Board may have had to hire a new chief
    executive because it had to fire the original founder. However,
    the Board is often part of the overall problem that caused the
    founder’s firing. Therefore, the Board’s actions in helping a
    new chief executive are similar to those when trying to help the
    founder.
    · The
    actions below are intended to help the organization retain focus
    and direction, and become more stable and proactive.
    1.
    Understand
    and take full responsibility for the role of Board member.

    You’re there to set policy and guide strategic
    direction according to the mission and plans of the organization,
    not according to personalities of the leadership.
    2. Don’t be part of the new chief executive’s problem!
    Don’t continually reflect on what the founder would have done.
    Work together with the new chief executive to find a solution
    that fits both the nature of the Board and the new chief executive.
    Meet consistently and make decisions based on mission, planning,
    and affordability, not on urgency. Avoid the notion of any quick
    fixes, such as firing the new chief executive to find someone
    else more like the founder. Quickly going from one chief executive
    to another reeks havoc on the organization, including damaging
    its credibility with stakeholders.
    3. Carefully monitor implementation and deviations from plans.
    Don’t hold the new chief executive to always doing what’s in the
    plan or budget — but to always explaining deviations and how
    they can be afforded.
    4. Support the new chief executive with ongoing coaching
    and affirmation.
    Like the founder, the new chief executive
    will change to the extent that he or she feels safe, understands
    the reasons for change, and accepts help along the way. Establish
    a Board Personnel Committee to provide ongoing coaching to the
    new chief executive (but not to replace his or her responsibilities
    and accountabilities). Include at least one or two experienced
    organizational leaders on this committee.
    5. Implement development and evaluation plans for the new chief
    executive.
    Include his or her input. Be consistent with the
    new chief executive’s accountability to implementing the plans
    or explaining deviations from them. Evaluate the new chief executive
    according to meeting strategic objectives and to his or her job
    description.
    7. Carefully consider policies to carefully solicit feedback
    from staff to Board.
    Consider having staff representatives
    on Board committees. Consider a 360-degree evaluation process
    for the chief executive, wherein staff provide feedback about
    chief executive’s performance. Get outside advice when you conduct
    360-degree evaluations for the first time. Establish a grievance
    procedure where staff can approach Board about concerns if they
    can prove they have tried to work with the chief executive to
    resolve these issues.
    8. Closely monitor key indicators of successful change.
    Ensure ongoing communications between Board members and the new
    chief executive, sound financial management, implementation of
    plans and policies, and stable turnover of staff. Perhaps the
    most useful indicator is continued positive feedback from customers.

    Actions New Chief Executive
    Must Take Before Taking the Job

    1.

    Develop your own approaches
    to personal support and stress management.

    Have
    mentors and friends whom you can regularly talk to. What do you
    count on regularly to relieve stress, e.g., mediation? exercise?
    journaling? Engage in stress management — consistently.
    2. Accept a mentor outside the organization and an advocate
    within.
    This is likely to be a major transition in the organization
    and your life. You’re likely to experience stress and loneliness.
    Seek and accept help.
    3. Review the organization’s finances in detail. The
    most prominent long-term symptom of Founders’ Syndrome is financial
    problems, including inconsistent reports, continued deficits,
    Board disengagement, problems surfaced during audits, (and in
    the case of nonprofits, expressed concerns from Funders), etc.
    Look at past financial reports, including cash flows, income statements
    and balance sheets. Review any audit reports. Are Board members
    actively engaged and really aware of the finances?
    4. Get the Board’s expectations of you in writing. See
    the job description. Review the strategic plan. Did the Board
    update the job description as reference during its interviews
    for a new chief executive. Are there any other separate documents
    that record expectations on the chief executive. What process
    does the Board use to evaluate the chief executive role?
    5. Record and discuss your expectations of the Board. Don’t
    assume that all Board members realize the roles and responsibilities
    of a governing Board. Share your documented expectations, including
    with reference to roles of a governing Board. Expect a yearly
    written performance review. Emphasize strategic planning. Consider
    sharing this booklet with them.
    6. Ask Board members “What role does the outgoing founder
    have with the organization?
    It’s very difficult for a new
    chief executive to be effective if the founder is still around
    in some capacity. If the founder is still associated with the
    organization, the founder’s new role should be clearly defined
    and of a substantially reduced role.

    Actions New Chief Executive
    Must Take After Taking the Job

    1. Acknowledge that the
    Board may either be highly skeptical of your credibility, or be
    giving you complete latitude to “save” the organization.

    Be patient with them. Set your priorities accordingly to establish
    your credibility, or set realistic expectations between you and
    Board.
    2. During the first three months, ensure you have in writing,
    the Board’s expectations of you
    , including its priorities
    for the coming year. Count on reference to your job description,
    strategic plan and any chief executive development plan.
    3. Fully understand the role of the governing Board and support
    the Board to carry out its role
    , particularly the finance
    (and in the case of nonprofits, fundraising) committees.
    4. Carefully review the Board’s operational policies and the
    personnel policies.
    Ensure your activities are in accordance
    with these policies.
    5. Fully and accurately communicate with all
    Board members
    through, e.g., in Executive Committee meetings
    (depending on the nature of the Board), Director’s Report, memos
    to Board members about status of transition to new chief executive,
    meetings with Board Chair, reports of status on objectives and
    strategic plan, minutes from staff meetings, etc.
    6. Suggest the start (or update) of strategic planning soon
    to get a chance for ongoing dialogues to share your ideas with
    Board and staff, and to include your input to any new vision.

    7. Set high and clear expectations to staff and communicate
    these to them.
    Include their input. Be consistent about not
    accepting poor behavior.
    8. Schedule staff meetings and 1-on-1 meetings every two weeks
    for first two months;
    then always do staff meetings and 1-on-1’s
    every month.
    9. Invite staff to a party at the your house. Don’t conduct
    any business at this meeting, rather use the meeting to get to
    know each other.
    10. Don’t ever bad mouth the previous chief executive
    or the Board.

    11. If mention of the founder comes up, redirect discussion
    back to the organization’s policies, procedures and/or the issue
    at hand.
    12. Ensure you have ongoing written performance evaluations.

    What if Founder Left Organization
    in a Mess?

    · Occasionally, the transition does not go smoothly.
    This situation might occur if, e.g., the founder left the organization
    in a mess, was quickly fired, or had to leave suddenly for medical
    reasons.
    · This situation is greatly alleviated if the Board
    has been doing its work all along!
    · Still, when transitioning to a new chief executive, there
    may be major problems that the organization is not aware of. The
    new chief executive and members of the Board should conduct the
    following activities as soon as possible:
    1. The new chief executive should share any and all concerns
    with Board members as soon as possible.
    Suggest an action
    plan with full, written reports to the Board. Ensure Board committees
    are highly involved in assessing the situation and responding
    to it.
    2. In the case of nonprofits, consider applying for an emergency
    grant to fund any necessary activities to take stock of
    the organization
    . You may also need funds to cover any shortfalls
    because, when an chief executive suddenly leaves, the chief executive
    often has stopped carrying out necessary fundraising. Also, funds
    are often needed to hire a new chief executive.
    3. Strongly consider bringing in an outside financial consultant
    to review and verify the financials
    , including to ensure
    that all income and expenses are known, financial statements are
    up-to-date and accurate, and to suggest necessary financial activities
    to manage finances. You may need to rely on an outside financial
    consultant for bookkeeping, financial reporting and analysis.
    Consider using the consultant who conducted your last audit, if
    applicable. Involve the finance committee. Provide a written report
    to the Board.
    >4. Promptly establish the cash flow position.
    How much cash exists and how far will it carry the organization,
    considering all known expenses? Involve the finance committee.
    Provide a written report to the Board.
    5. Review all files and documentation. Is the organization
    involved in any lawsuits? Are there any letters of concern from
    key stakeholders? Have these been addressed? Are all personnel
    files secured?
    6. In the case of nonprofits, review all current grants.
    Is the organization performing to promised outcomes in those grants?
    Are reports being provided to funders on a timely basis? Involve
    the fundraising committee.
    7. Contact all key stakeholders. Strongly consider meeting
    face-to-face with all major funders, and sending letters to other
    funders as well. Tactfully explain the situation and ask for their
    patience. Indicate what you are doing to address the situation,
    and indicate when you will be getting back to them. Involve Board
    members in making these contacts.
    8. Nonprofits should resume ongoing fundraising as soon as
    possible.
    It often takes several months to receive funds after
    initial application. The organization cannot afford to wait until
    the new chief executive comes in to start fundraising. Ensure
    the fundraising committee is strongly involved.
    9. Shore up hope among staff members. Staff members will
    likely know almost as much as you do about the status of the organization.
    Tactfully communicate with them. Tell them about potential concerns.
    Tell them what you’re doing. Remind them of any successes of the
    organization. Have one or more Board members attend staff meetings
    until things are settled. Staff members will be greatly relieved
    if they see the new chief executive and Board highly involved
    in helping the organization.
    10. Coordinate Board involvement through use of committees,
    and the Executive Committee should track actions and their completion.

    The Executive Committee and new chief executive should meet
    on a weekly basis and track actions to their completion. Concurrently,
    Board members must try retain the perspective of a governing Board
    — this can be a major challenge to not get stuck in micro-management!


    Appendix A –

    Procedure for Transitioning to a New Chief Executive

    © Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC.

    This procedure can be used to guide
    an organization through the transition to a new chief executive.
    The procedure addresses most of the major considerations during
    the transition, but there will certainly be unique items that
    will come. The procedure should be carefully reviewed by the relevant
    board members and current chief executive to ensure it is complete
    for their needs. (Note that this list is very useful as a risk
    management mechanism, e.g., for contingency planning, for review
    by an organization even if the chief executive is not leaving.)
    If the current chief executive is being fired, this procedure
    should be modified accordingly. This document contains the following
    sections:

    Current Chief Executive’s
    Notification to Board


    Confidentiality

    Board Preparation

    Administrative Preparation

    Interim Coordination
    Between Board and Staff

    Hiring
    the New Chief Executive

    Orienting the New
    Chief Executive

    Current Chief Executive’s Notification to Board

    1. Typically, the chief
    executive will notify the board chair or other board member.

    The chair should immediately notify the rest
    of the board members in the next board meeting.
    2. Attempt to negotiate a four-week-notice period from the
    chief executive.
    It’s not unlikely that there will be
    a period without a new chief executive. This procedure will help
    guide through that period.

    Confidentiality

    1. The board members should be apprised as soon
    as possible.
    Occasionally,
    members believe that transitions should be handled so cautiously
    that even some board members should not hear about the transition.
    This is the wrong approach. Each board member is legally responsible
    for the leadership of the organization, and deserves to know about
    all matters when they occur.
    2. Discuss how to handle public relations. The community
    will soon hear the chief executive is leaving. Agree on how this
    message will be conveyed to the community. If the transition is
    expected to take over a month (they often do), consider sending
    a letter to the major stakeholders (advisors, suppliers, “peer”
    organizations, funders if in the case of a nonprofit, etc.) notifying
    them of the transition and assuring them that transition planning
    is being carried out thoroughly. Ask them to contact the board
    chair if they have any concerns or questions.
    3. Note that applicants to the chief executive role deserve
    complete confidentiality.
    Make every effort not to expose
    applicants’ names to the public or staff. If certain staff are
    selected to interview the candidates, they should be coached to
    not reveal candidate names to the rest of staff. This confidentiality
    is not a matter of secrecy to be manipulate, rather it is a matter
    of protecting candidates who may not want their names out in public
    as looking for a new job. Of course, this matter of confidentiality
    is ultimately up to the board, but if confidentiality is not assured,
    it is very likely that the number of candidates will be quite
    limited.

    Board
    Preparation

    1. Appoint an ad hoc
    transition board committee to focus on this transition –

    This committee will manage the transition and make recommendations
    to the entire board regarding any matters with the transition.
    This committee role could be assumed by the current Executive
    Committee or a Personnel Committee. Committee members should commit
    to availability over the next four to eight weeks.
    2. This transition planning procedure should promptly be
    reviewed and updated
    to constitute the transition planning
    document.
    3. As soon the transition plan is complete, the staff should
    promptly be notified of the transition.
    A board member
    should attend the staff meeting where notification is given and
    the staff should be assured that the transition is being planned
    and carried out. The plan might be reviewed in the staff meeting.
    A copy of the transition plan should be shared with all staff
    members.
    4. In the case of a nonprofit, identify funding for the
    transition.
    For example, are any funds needed for a national
    search, to move the new candidate, for training the new candidate,
    will any consultants be needed, etc.?
    5. Update the chief executive job description. The
    description will be referenced to write the ad for the position,
    during interviewing and for ongoing guidance to new chief executive,
    and ensuring adequate compensation. When updating the job description,
    consider: current overall responsibilities, strategic planning
    goals for the year and the nature of current major issues that
    need to be addressed. Identify the most important criteria for
    selecting the new person and then rank the criteria (this ranking
    comes in handy when comparing candidates). The board should update
    the job description among themselves. The current chief executive
    should update the description at the same time, but independently.
    The board and chief executive should share their comments to the
    job description and discuss differences to come to consensus.
    Write a final version of the job description.
    6. Get ads out as soon as possible. The board should
    decide if they are going to do a local and/or national search.

    7. Hiring the new chief executive. (See the section,
    “Hiring to Fill the New Role” later on in this document.)

    Administrative
    Preparation

    1. Establish an interim
    staff structure.
    Consider appointing an acting chief executive
    from among the top reports to the current chief executive. If
    this course is followed, ensure the job description is well understand
    by the acting chief executive and the acting arrangement is documented
    in a letter between the acting chief executive and the board.
    Send a memo throughout the staff, indicating this interim appointment
    and how the acting chief executive will work with the staff until
    a permanent chief executive is identified. (Be very careful with
    this type of temporary arrangement as it can set lull board members
    into believing the transition is complete, which it is not.)
    2. Update the administrative calendar for the organization.
    Ask the chief executive to make a schedule of all major recurring
    activities during the year (e.g., performance reviews, special
    events, staff meetings, one-on-one meetings, lease/contract expiration
    dates, when paychecks come out, etc.)
    3. Get a list of key stakeholders. Have the chief
    executive make a list of all community key stakeholders whom the
    new chief executive should know about, e.g., funders if the organization
    is a nonprofit, advisors (legal, accounting, real estate), “peer”
    organizations, etc.
    4. Review chief executive’s office facilities. Ask
    the chief executive to document the status of his/her office,
    e.g., ensure there are labels on all documents and drawers. Appropriate
    staff and at least two board member should meet with the chief
    executive to review where he/she keeps their files and major documents.
    Staff should retain a key to the office and appropriate board
    members should retain keys to the desk drawers and file cabinets.

    5. Review personnel status. Two or more board members
    should meet with the chief executive to review personnel files,
    e.g., are there any current personnel issues or pending major
    actions? If so, it may be best to wait until the transition to
    the new chief executive if this is expected to occur during the
    next month or so.
    6. The current chief executive should complete performance
    reviews on all personnel before he/she leaves.
    This ensures
    that the chief executive’s important feedback to personnel is
    collected before he/she goes, gives personnel a fair opportunity
    to reflect their past performance to the new chief executive,
    and gives the new chief executive the input he/she deserves about
    each employee to ensure effective supervision.

    Interim
    Coordination Between Board and Staff

    1. Emergency contacts for
    the staff.
    Staff should be given names and phone numbers
    of at least two board members whom can be contacted if needed.
    These two members should brief the entire board on the nature
    of any emergency calls from staff, if calls were made.
    2. Board and staff meetings. Depending on the size
    of the organization, have weekly meetings of full staff (if small)
    or all managers (if large) during the transition until a new chief
    executive is hired. Have a board member attend the meetings. Have
    a staff member (acting chief executive, or the current top reports,
    or rotate among top reports) attend portions of the board meetings.

    3. Coming up to speed on chief executive’s current activities
    in the organization.
    Have the current chief executive
    ask all staff members to update a “todo” list of their
    current major activities over the past month, planned activities
    over the coming two months and any major issues they’re having
    now. These todo lists will serve to coordinate work details during
    the transition and help update the new chief executive come up
    to speed.
    4. Authorization lists. Decide who will issue paychecks
    and sign off on them during the transition. Often, the board treasurer
    and/or secretary will conduct this sign-off role.
    5. A board member should meet with the current chief executive
    once a week before he/she goes.
    Review status of work
    activities, any current issues, etc.

    Hiring
    the New Chief Executive

    1. Advertise the position
    – Post ads in classified sections of local major newspapers. In
    the ads, include the job title, general responsibilities, minimum
    skills and/or education required, whom they should send a resume
    to if they are interested and by when. Mention the role to customers.
    Send cover letters and job descriptions to professional organizations.
    Be sure to mention the role to all staff to see if they have any
    favorite candidates.
    2. Note that current employees should be able to apply for
    the job.
    Considerations in hiring them for the new role
    will have to include the impact on the organization if the employee
    leaves behind a critical and unfilled role in the organization.

    3. Screen resumes – Often, a board committee will
    screen the first round of candidates, including review of resumes
    and first round interviews. When screening resumes, note the candidate’s
    career objective — or the lack of it. If not specified, the candidate
    may not have considered what they want to do in the future, which
    may impact their commitment to your new role. Note if they stayed
    at jobs long or did they leave quickly. Are there holes in their
    work history? Note their education and training. Is it appropriate
    for the new role? Consider what capabilities and skills are evidenced
    in their past and current work activities. Interview all candidates
    that meet the minimum qualifications. (At this point, be sure
    that you’re not excluding candidates because of unfair biases.)

    4. Interview candidates – Send the job description
    to candidates before they come to the interview meeting. While
    interviewing candidates, always apply the same questions to all
    candidates to ensure fairness. All questions should be in regard
    to performing the duties of the job. Ask about their compensation
    needs and expected or needed benefits. Attempt to ask open-ended
    questions, i.e., avoid “yes-no” questions. Talk for
    at most 25% of the time — the rest of the time, listen. Don’t
    rely on your memory — ask permission from the interviewee to
    take notes. Find out when they can start if offered the job. Consider
    having multiple people at the interview; although this can be
    intimidating to the interviewee, this practice can ensure them
    a much more objective and fair presentation. (If staff participate
    in the interviews, ensure they realize they are advisory in capacity.
    Board members have the legal responsibility to select the new
    chief executive.) Have the same people as interviewers in all
    of the interviews. Consider asking some challenging, open-ended
    questions, such as Why do you want the job?, What skills do you
    bring to this job?, What concerns do you have about filling this
    role?, What was your biggest challenge in a past job and how did
    you meet it? Do you have a preliminary vision for (the nature
    of your agency’s services)? Describe your ideal (board, fundraising
    if the organization is a nonprofit, budgeting, personnel management,
    program management) process. Don’t ask questions about race, nationality,
    age, gender, disabilities (current or previous), marital status,
    spouses, children and their care, criminal records or credit records.
    Have all interviewers share/record their impressions of the candidate
    right after the interview meeting. Explain to the candidate that
    you’ll be getting back to them soon and always do this. Ask if
    you can get and check any references. Always check references
    and share them with the interviewers. Be sure to tell candidates
    of any relevant personnel policies terms, such as probationary
    periods. (The best way to deal with a poor performer is not to
    hire him or her in the first place. It is often wise to have a
    probationary period of, e.g., six months, wherein if the employee
    does not meet the responsibilities of the position, you can terminate
    the employee.) If practical, look into the applicant’s background
    to ascertain if they have a criminal record.
    5. Select the candidate – Usually, a board transition
    committee recommends the top two or three candidates to the entire
    board for discussion and selection. This may require another round
    of interviews, this time including more/other board members. Usually,
    this is not as easy as one would like because two or three candidates
    come in close. Have a highly focused meeting with all interviewers.
    (Again, note that staff members can provide input to the selection
    of the new chief executive, but should not be involved in voting.)
    Have each interviewer suggest their favorite candidate. If there
    is disagreement, focus discussion to identify the one or two areas
    in which interviewers disagree about the candidates. Then have
    each interviewer explain their impressions. At this point, interviewers
    usually come to consensus and agree on one candidate.
    6. If there does not seem to be a most suitable candidate
    – Consider if the job requirements are too stringent or are an
    odd mix. Or, consider hiring the candidate who came in closest
    and plan for dedicated training to bring their skills to the needed
    levels. Or, re-advertise the position. Consider getting advice
    from a human resources professional (at this point, your need
    for them is quite specific, so they might provide services on
    a pro bono basis). Or, consider hiring a consultant on a short-term
    basis, but only as a last resort as this may be quite expensive.

    7. If everyone turns down the job – The best strategy
    is to ask the candidates why they turned the job down. Usually,
    you’ll hear the same concerns, e.g., the pay is too low or the
    benefits incomplete, the organization seems confused about what
    it wants from the role, the interview process seemed hostile or
    contentious, etc. Reconvene the interviewers and consider what
    you heard from the candidates. Recognize what went wrong and correct
    the problem. Call back your favorite candidates, admit the mistake
    and what you did, and why you’d like to make an offer to them
    again.
    8. Offer letter – If they accept an offer, always
    follow-up with an offer letter, specifying the compensation, benefits,
    and starting date and reference an attached job description. Ask
    them to sign a copy of the offer letter and return it to you.

    9. Start a personnel file – Include in the file,
    the signed offer letter, tax withholding forms, the job description
    and any benefits forms.

    Orienting
    the New Chief Executive

    Develop an orientation procedure and consider the following activities for
    inclusion on the list. The following activities should be conducted by the board,
    if possible.
    1. Before the new chief executive begins employment, send them a letter welcoming
    them to the organization,
    verifying their starting date and providing them
    a copy of the employee policies and procedures manual. (This can be included
    in the offer letter.)
    2. At this point, the board may send a letter to stakeholders. The letter
    would announce the new person, when they are starting, something about their
    background, etc., and asking them to call the board chair if they have any questions
    or concerns.
    3. Meet with the chief executive to brief them on strategic information.
    Review the organization chart, last year’s final report, the strategic plan,
    this year’s budget, and the employee’s policies and procedure manual if they
    did not get one already). In the same meeting, explain the performance review
    procedure and provide them a copy of the performance review document.
    4. When the new chief executive begins employment (or before if possible),
    introduce them in a meeting dedicated to introducing the new chief executive.

    If the organization is small enough, have all staff attend and introduce themselves.
    If the organization is larger, invite all managers to the meeting and have each
    manager introduce themselves.
    5. Ensure the new chief executive receives necessary materials and is familiar
    with the facilities.
    Ensure an assistant gives them keys, gets them to sign
    any needed benefit and tax forms. Review the layout of offices, bathrooms, storage
    areas, kitchen use, copy and fax systems, computer configuration and procedures,
    telephone usage and any special billing procedures for use of office systems.

    6. Schedule any needed training, e.g., computer training, including use
    of passwords, overview of software and documentation, location and use of peripherals,
    and where to go to get questions answered.
    7. Review any policies and/or procedures about use of facilities.
    8. Assign a board member to them as their “buddy” who remains
    available to answer any questions over the next four weeks.
    9. Have someone take them to lunch on their first day of work and invite
    other staff members along.

    10. During the first six weeks, have one-on-one meetings (face-to-face or
    over the telephone) with the new chief executive,
    to discuss the new employee’s
    transition into the organization, hear any pending issues or needs, and establish
    a working relationship with the new chief executive.


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