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					                                Founder's Syndrome:
                     How Corporations Suffer -- and Can Recover
     Written by Carter McNamara, PhD | Applies to nonprofits and for-profits unless noted

This document contains the following sections:
Preface
Acknowledgment
About the Author
Distribution of this Booklet
Request to Reader
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 Organization in a Mess?
Appendix A - Procedure for Transitioning to a New Chief Executive
Appendix B - Some Books and Sources of Assistance



Preface
Acknowledgments
I learned a great deal about Founders' Syndrome while facilitating various Leaders Circles
meetings over the past two years. A Leaders Circle is a peer-based development program which
includes five to seven members who meet regularly in highly focused meetings to share ongoing
support, problem solving and networking. Founders' Syndrome is a common problem addressed
by members of these circles. (See http://www.mapnp.org/library/circles/ldrscrcl.htm )

I also 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
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issue.

About the Author
Carter has consulted to numerous organizations in the areas of organization development,
leadership development and strategic planning. He has 20 years of increasing leadership and
management responsibilities in a variety of organizations including small nonprofit, university,
public-private and for-profit corporations. He also developed the peer-based Leaders Circles
Program at The Management Assistance Program for Nonprofits in St. Paul, Minnesota
(http://www.mapnp.org/library/circles/ldrscrcl.htm ). He is also founder and developer of the
Nonprofit Managers' Library (http://www.mapnp.org/library ), an on-line, repository of free
management materials for nonprofits across the world. He also developed the free, on-line, 12-
course Nonprofit Grassroots "MBA" program
(http://www.mapnp.org/library/mgmnt/mba_prog.htm ).

In 1997, he received the University of St. Thomas' Business Excellence Award for Community
Service for donating well over 800 hours of service to Twin Cities' nonprofits from 1992-1996.
He holds Bachelors degrees in Social and Behavioral Sciences and in Computer Science, an
MBA, and a PhD in Human and Organization Development with a focus on leadership and
management. He is married to Teri and has two children, Ian and Darienne. He lives in
Robbinsdale, Minnesota.

Distribution of this Booklet
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 http://www.mapnp.org/library/misc/founders.htm

Request to Readers
If you have further suggestions for dealing with Founders' Syndrome, please let the author know
by sending e-mail to mcnam007@tc.umn.edu. Or, please share any other reactions or concerns as
well.




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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.
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· 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

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     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 commmittee, 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.
14.
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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 efffectiveness) 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 admidst 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.

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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. 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.

5. 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.

6. 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.

7. 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?

8. 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.

9. 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.
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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
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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).
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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
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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
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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?
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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!




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Appendix A - Procedure for Transitioning to a New Chief Executive
by Carter McNamara, PhD (last revision: March 10, 1998)
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
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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
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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
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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
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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.




Appendix B - Useful Books and Sources of Assistance
1. Facilitator's Guide to Nonprofit Strategic Planning by Carter McNamara, PhD. You
can view and order this book from http://www.mapnp.org/library/docs/view_doc.htm
2. Free Nonprofit Managers Library on the World Wide Web at http://www.mapnp.org/library -
includes extensive range of free, how-to nonprofit management resources
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3. Hummel, Joan, Starting and Running a Nonprofit Organization. Available from the Center for
Nonprofit Management. Call 612-962-4300.
4. Kilmann, Ralph H., Beyond the Quick Fix: Managing Five Tracks to Organizational Success.
Call the Society for Nonprofit Organizations at 651-962-4300.
5. Knowlton, Lisa Wyatt, "How to Deal with Crises and Conflicts", Nonprofit World, May-June
1993. Call the Society for Nonprofit Organizations at 651-962-4300.
6. Managing Change at Work: Leading People Through Organizational Transitions by Cynthia
D. Scott, PhD, and Dennis T. Jaffe, PhD, and published by Crisp Publications. Call 1-800-462-
6420.
7. Nonprofit World at Your Fingertips (CD-ROM), Society for Nonprofit Organizations. Call
651-962-4300.
8. Swanson, Andrew, "Supervising the Executive Director", Nonprofit World, May-June 1989.
Call the Society for Nonprofit Organizations at 651-962-4300.
9. The Complete Guide to Nonprofit Management by Smith, Bucklin and Associates, published
by Wiley and Sons. Provides comprehensive information about all facets of nonprofit
management, and does so in a well-organized and concise style. Call 1-800-225-5945.




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