Did a New Survey Offer Misleading Data on the CEO Turnover 'Wave'?by CCE Staff on 08/08/11
From the Chronicle of Philanthropy, Print Edition, Page 38, Opinion
July 28, 2011
To the Editor:
A new report on nonprofit executive leadership ("Nonprofit Leadership Still Shaky, Study Finds," June 30), jointly produced by CompassPoint Nonprofit Services and the Meyer Foundation, is receiving significant attention in the sector. Nonprofit leadership is a crucial issue, of course, and the report raises many vital questions. But I wonder whether the report's authors-as well as the trade-press coverage, including in this newspaper-have in some cases extrapolated too far from the results.
The Chronicle’s coverage of the study, "Daring to Lead 2011," begins:
"Despite years of warnings, nonprofit groups are unprepared to handle the wave of executive turnover about to hit them hard, according to a new survey of charity leaders. And with many organizations already shaken up by the recession, the stakes of a botched leadership changeover are high."
I feel like we have been hearing about a "wave" of impending transitions in leadership in the sector for the past decade. Perhaps that’s because we have. Previous iterations of this study, "Daring to Lead 2001" and "Daring to Lead 2006," issued similar warnings.
In fact, the proportion of leaders saying they will leave their posts in the next five years has actually declined-from 75 percent in the 2006 and 2001 "Daring to Lead" reports to 67 percent in this latest one. Of course, even 67 percent is a high number, but experience seems to suggest a significant gap between the survey results for this particular question and what actually happens.
It seems that among the most important findings of this research effort may be this one: Surveys, while good for many things, are not particularly useful for predicting behavior five years hence.
In discussing the "high rates" of projected turnover, "Daring to Lead 2011" smacks nonprofit boards hard, warning that "many boards of directors are under-prepared to select and support new leaders." The report says boards are paying insufficient attention to executive transitions, citing as evidence that "just 17 percent of organizations have a documented succession plan." But I wonder, is a “documented succession plan” necessarily a good thing to have?
Should a board be discussing succession? Absolutely.
Boards and CEOs should talk regularly about whether there are strong internal candidates and how they are developing. But a board may well want the flexibility to consider a transition in the context of the moment. Furthermore, if there are multiple potential internal successors, the smartest move may be for a board not to choose until it has to-with the benefit of all possible accumulated knowledge and experience (and an understanding of the particular moment in time).
The authors of the study also point to rather startling data indicating that 33 percent "of current executives followed a leader who was fired or forced to resign, indicating the frequency of mishires and unclear expectations between boards and executives across the sector."
But another interpretation of this statistic would be that nonprofit boards are holding nonprofit leaders to high standards of performance. It suggests boards are not afraid to make a change when it’s warranted. This interpretation, if plausible-and it seems just as plausible as the one offered in the report-is important because it runs counter to the common misperception that nonprofit jobs come with a lifetime guarantee.
Overall, the report mixes reporting on survey results with interpretation, extrapolation, and recommendation in a way that may not serve its audience well. Given the importance of this topic, I would hope we see more discussion about what the data might really mean in the weeks and months ahead.
PresidentCenter for Effective Philanthropy