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  Interim Director: Place Holder or Catalyst for Change Potpourri

Canadian FundRaiserGOVERNANCE     -    Patricia A. Smith

When there is a sudden departure of an executive director, regardless of whether it was a resignation or termination, the board faces many crucial decisions. Who will oversee operations until a replacement is hired? Which approach will be least disruptive in terms of services and operations? How will the expenses of the transition and search be funded? Can this period be used to strengthen the organization and build capacity?

When faced with this dilemma, boards often turn to senior staff members who may already be overextended but are committed to the organization and willing to help in the short term. There is a certain comfort level, the staff person is a known entity and can assume responsibility quickly. Especially for cash strapped organizations, there is also a financial savings with this approach.

An alternative is to find an enthusiastic board member with the requisite level of management experience. While the cost savings may be negligible, there is the comfort level and dealing with a known entity factors that makes this an appealing choice for many boards. However, depending on the board composition, finding a member who is available and possesses the appropriate skill set may be problematic.

Independent professionals

With the increasing availability of experienced nonprofit management consultants, boards now have a third choice. They can hire an independent professional to help lead them through the transition and in-between state. They can turn this occasion into an opportunity to strengthen and enhance the organization and help ensure the success of the next director.

CompassPoint Nonprofit Services of San Francisco has published a series of monographs on the topic of executive transitions and executive transition management (ETM) and in its 2005 monograph Interim Executive Directors: the Power in the Middle, it indicates that the transition process can “provide potent, pivotal moments, opportunities to update an organization’s strategic direction and implement needed capacity building.”

In the above referenced monograph by Tim Wolfred, he states, “interim EDs are not simply board members or staff who sit in the executive director’s seat for a few weeks or months until a new director is found. Interim EDs are highly skilled managers who temporarily take the helm of an organization (four to eight months on average), help the board and staff address important systems and capacity issues, and lay the groundwork for the permanent leader’s success.”

While I concur with the CompassPoint definitions and premises, this article is based on personal observations and lessons learned from serving as interim director on five different occasions.

My experiences were with very different organizations in terms of budget, program offerings, financial health, number and calibre of staff and stakeholders, but there were some common themes:

In every instance but one, the former director had been terminated. This appeared to be a slow and painful process for the volunteers. It generally took one or two board members with the courage to force the board to assess the situation critically and take decisive action.

While board members knew things were not quite right in the organization, they did not fully comprehend the depth and extent of the disarray.

Anxious staff

Staff were anxious, concerned about the future of the organization and their own job security. Additionally, old relationships, alliances and work patterns were disrupted, adding to the staff’s anxiety.

Funders were generally relieved that the board had taken action and were supportive of the interim process. When funds were requested for executive transition, they were approved.

There were always programs that needed to be strengthened and enhanced or eliminated. This often meant raising the bar or terminating staff.

Generally operational systems were non-existent and filing and tracking were haphazard.

In addition to these common themes, each organization had its own culture, set of issues and unique challenges. In one organization there were 35 placed workers (social services recipients who had to work to be eligible for benefits) who had no one supervising them. They would sign in and then leave. In another agency, required charities registration filings and fees had not been submitted. A third had shelves full of out-of-date materials, an unlimited inventory of supplies, clutter throughout the office and intense resistance to change of any kind.

An effective interim director is one part investigator, one part healer, one part visionary, one part financial forensics expert, and, when necessary, one part junk yard dog. A board member for one of the agencies where I served as interim spelled out why junk yard dog qualities were necessary. The organization was overrun with clients, theft was rampant and staff apathetic. They needed someone who was tenacious and firm. The first two weeks at that organization remain a blur of people, problems, disarray, disbelief, resistance, locks and keys.

Challenging experience

My first day also coincided with the first day of summer camp for 100 low-income inner city children. While staff had been hired by the former director, there had been no training, planning or purchase of any supplies. I literally wanted to run away from the whole situation. What kept me showing up every day was that I was an honourable person and a professional with a signed contract. It was hands down the most challenging experience of my professional life. Yet when I see where the agency is today and think about my role in helping it get there, there is an unparalleled sense of pride and accomplishment.

As an interim, it is necessary to assess the organization quickly, so extensive management experience is a must. A more than passing acquaintance with human resources is also necessary, since staff terminations and hiring will most likely occur during your tenure. Grant writing, budget preparation and review are also expected of interims.

It is also anticipated that the interim will be able to interact with staff, volunteers, funders, suppliers and other stakeholders, while negotiating favourable contracts and keeping the organization’s programs and events constantly in the public eye. An understanding of systems, internal controls and standards of excellence for nonprofits ensures that there will be some benchmarks against which to measure the organization. All the skills necessary to be an effective ED are required of an interim – it is just that everything happens in a more compressed time period.

Generally, an interim assignment will last for four to eight months. In my experience there are three distinct periods – assessment, visioning and resolution. In the assessment phase, I would interview staff, board and funders, read contracts, board and staff minutes, audit reports, recent correspondence and other significant paperwork. This is also a period of asking questions and observing relationships, communication patterns, and attitudes.

Board guilt

Boards may not want to hear your initial assessment because as you uncover the realities, they may feel some guilt. One board member told me how angry and upset she was with my initial report – it contained truths she wasn’t ready to hear.

The second phase is visioning and includes a board planning retreat, a review of the assessment, and lengthy discussion about the desired future of the organization. Qualities, characteristics and skills necessary in a new director are examined and a thorough review of all programs and services is completed. Significant decisions are made at this time and a plan for the future is put in place.

It can be a long dusty road between the current state of affairs and the board’s vision for the future, so often intermediate steps need to be taken. This is the time when programs will either be strengthened or eliminated and new systems will be developed. It’s all about getting the organization in prime shape so that when a new director is hired, he or she can hit the ground running.

The third phase, which I call resolution, is about implementing decisions made at the planning retreat, forming the search committee and beginning the search process. Depending on the calibre of applicants, this can be a time of euphoria or anguish. The search process can be local, regional or national and can include everything from telephone interviews to on-site presentations by candidates. The role of the interim is to facilitate a successful search, and then help the selected candidate to transition into his or her new role.

Relevant lessons

Of the myriad lessons I have learned in my various experiences as an interim director, those most relevant are:

Board members may disengage once you are hired. They are still recovering from the trauma of terminating the former director and know they must be intimately involved in the hiring of the new director. So now that a professional interim is in place, they may want to opt out for a while.

Know that on a daily basis there will be challenges and surprises – the most competent staff person may resign to take a job that’s a better fit with her family responsibilities; the food bank may threaten to cut off your monthly allotment because the former director is the only person authorized to order; the agency credit cards may be pulled because the retiring accountant guaranteed them using her credit history, or the landlord may triple the rent.

While your tenure is short term, your role is not that of a place holder. Think of yourself as a catalyst for organizational change with a goal of leaving the organization much stronger than you found it.

Staff may be guarded and try to undermine you. It’s a bonus if you find a kindred spirit in the organization. Remember – you are not there to make friends but to help strengthen the organization. Help staff, especially, to understand that things will continue to be different and if they are going to have a future with the organization, they need to change and adapt to where the organization is going.

Escape clause

When negotiating a contract to serve as interim, get as much information as you can and talk to as many board and staff as possible. In the contract, lay out the deliverables, but always include a clause that if additional problems/issues that were not apparent at the outset are uncovered, a separate contract and fee may need to be negotiated.

Serving as an interim is not something that should be entered into lightly, nor is it for the inexperienced or novice consultant. An effective interim can make significant contributions to the agency served and ultimately to the people served by the agency.

There is much more to serving successfully as an interim than can be included in this brief article. For those interested in learning more, both CompassPoint and Support Center for Nonprofit Management offer specialized transition training on a yearly basis. A CompassPoint article was referenced above; I also recommend Making the Most of the Internal Interim Directorship, by Robert I. Goler for the New York: Support Center for Nonprofit Management, 2006.

For further information: Patricia Smith is President of Management Strategies, 3067 Donelson Rd., Jamestown NY 14701-9528, 716/483-6939, Manst542@aol.com. This article originally appeared in the Nonprofit Boards and Governance Review from Charity Channel, www.charitychannel.com.

Canadian FundRaiser
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