Sustaining Non-profits: HR Development, Succession Management, and Leadership Continuity

By Nils Geib

Non-profits are at a loss in their quest for professionalisation without competent leadership personnel and their ongoing development. This article draws on recent research findings on the strategic actions of non-profits with respect to talent and leadership staff development. It specifically discusses the benefits such an approach brings to non-profits. In the interests of operational sustainability, the author appeals for a proactive, strategic approach to leadership continuity through the implementation of key HR development as a shared responsibility of boards, executives, and HR professionals – especially regarding succession management.

Non-profits cannot get by without volunteers, honorary personnel, and professional staff. The last of these are particularly relevant in non-profits’ pursuit of professionalisation. From front-line workers, administrative and division executives to executive directors, employment and areas of responsibility in non-profits can be as manifold as those in, for example, the private sector. Yet, recruiting and retaining professional staff in non-profits is a multi-coined challenge of its own kind,¹ especially in the case of non-profit key employees, namely leadership personnel. Hence, the ongoing retirement of boomers,² and increased competition for skilled workforce with other (non-profit) organisations and among sectors³ makes it difficult for non-profits to fill their leadership needs. This is exacerbated by non-profits’ challenge to offer competitive incentive systems⁴ for taking and keeping a non-profit job when compared to private or public employers.⁵ Thus, non-profits’ leadership continuity is at stake.

Addressing non-profits’ leadership HR investment deficit

In a complementary vein, many non-profits struggle with addressing their specific leadership needs strategically. Often times, they have neither the expertise nor operational measures at hand to effectively provide their organisation with a “leaderful” pipeline that enriches their human capital.⁶ In fact, non-profits are at constant risk of underinvesting, for example, time and overhead (also due to external restrictions⁷) into covering their current and future leadership needs and demanded competencies.⁸  This, in turn, is crucial for effective non-profit recruitment and retention strategies (including HR development-targeting initiatives).

To build and maintain professional and collaborative structures in non-profits, to establish and uphold service quality, and to make strategic organisational decisions in relation to societal dynamics, leadership must be ensured in non-profits on a permanent basis, to keep the organisation on track. To do this best, non-profits can initiate strategically based HR development programmes, especially talent and succession management systems.⁹ These systems offer benefits to both non-profit employees and their employer organisations. From an employee’s perspective, they offer resources in terms of opportunities to grow and develop.¹⁰ Employees may thus feel valued by their non-profit employer while increasing their employment eligibility. Conversely, non-profit organisations benefit from implementing these employee-focused HR development systems, too, even though their implementation does not come easy.

Leadership HR development implementation – recent research insights

Fundamentally, implementing talent and succession management systems in non-profits starts with putting (key) HR development on the board’s agenda.¹¹ However, that alone can be challenging.¹² It brings about further corresponding “to dos”, such as the necessity, for example, to reflect on organisation-specific needs, to define career path opportunities, and to come up with actual developmental programmes. It also pushes non-profits to implement managerial assessment measures to review talent or the outcomes of succession management systems.¹³

To distribute workloads, division of labour is called for. While in non-profits the organisation’s strategic agenda is set mainly by the board, it is executive directors, division executives, and HR professionals who are responsible for implementing objectives on strategic agendas (such as talent and succession management) at the operational level.¹⁴  Hence, a multi-part approach to responsibility lends itself to non-profits for effective implementation of HR development systems. In fact, one of our latest studies at the Chair of Non-profit Management at the University of Hamburg finds that shared leadership among boards, executives, and HR professionals favours the implementation of a comprehensive set of succession management activities.¹⁵ 

Out of our study’s German sample of more than 1,000 leaders, only about 10 per cent state that the implementation of succession management HR systems is sufficient in their organisation. Indeed, this is alarming (though it reflects international research of the past decades¹⁶). The good news is that this share is more than twice as high (13.8 per cent) for non-profits that share responsibilities in their succession management efforts among boards, executives, and HR professionals, when compared to non-profits that do not share leadership (5.8 per cent).¹⁷ Having succession management activities implemented, in turn, significantly pays in terms of non-profits’ provision of leadership continuity¹⁸  – a key organisational outcome for non-profits to pursue.

Leadership continuity – a strategic goal toward non-profits’ long-term success

Ultimately, a non-profit’s ability to display leadership continuity certifies that it has sufficient high-flyers and potential leaders at hand. In this regard, it is an organisational outcome which shows “the extent to which a non-profit is genuinely capable of developing and retaining leadership potential as well as plan ahead for leader deputisation, thus ensuring ongoing leadership”.¹⁹ Beyond that, however, it is a promising non-profit objective precisely because it affects the organisation’s operations. As Kesner and Sebora²⁰ remarked in the early 1990s already – though still in the context of firms – organisational survival depends deeply on “how and to whom power and authority are passed”. Yet the same holds true for non-profits in their complex operational environments. In fact, there is a plethora of research that indicates that investment in human capital through HR development initiatives – succession management initiatives in particular – does relate to higher performance,²¹  besides ensuring leadership continuity. 

For instance, HR development that targets leadership continuity could promote non-profit employees’ perceived personal growth²² in their professional environment. This can reduce turnover among (potential leadership) employees,²³ while fostering their work commitment.²⁴ In turn, research underlines that committed employees positively affect organisational performance.²⁵  Also, there is initial evidence of a positive relationship between employees’ desire to advance in professional careers and an innovative work climate in different sectors.²⁶ From this perspective, non-profits could benefit from providing HR development opportunities targeted at leadership continuity because this (a) attracts high-potential staff that – today – seek career advancement opportunities,²⁷ (b) promotes employees’ commitment, and (c) can boost organisational innovative climate. Meanwhile, this last works to unlock competitive advantages and can link to performance, too.²⁸

Next to these benefits, however, leadership continuity – provided by, for example, succession management systems – signals reliability of relationships to non-profits’ critical and strategic partners, like funders. Typically, these relationships rely on long-term collaboration approaches in the joint provision or delivery of services. Yet, rapid and disruptive turnover in key staff positions, such as in leadership, convey uncertainty²⁹ and may evoke strategic realignments, which confound the original terms of the relationship. To prevent this from happening, systematically approached HR development may help to maintain smooth collaboration and reduce moments of disruption by involving strategic partners in the development processes at an early stage.³⁰ In addition, they serve to introduce future leadership professionals to a non-profit’s peculiarities and specific leadership duties, and to acquaint them with key stakeholders (for example, boards, front-line staff, funders, cross-industry partners, etc.). Such smooth transition preparations can positively affect non-profits’ long-term success as well.

The promise: target leadership continuity – there will be a rich harvest!

Utilising HR development, such as succession management systems, not only fosters non-profits’ professionalism by gaining in leadership HR capital on an abstract level. Far more practically, it provides them with competent and committed employees who are able to succeed current leaders or fill future key vacancies in time. Moreover, it feeds into non-profits’ performance. On that note, the strategic management decision to strive for leadership continuity via key (talent and leadership) HR development bodes well for making vital contributions to non-profits’ long-term self-preservation. It belongs (more) on non-profits’ agendas. However, non-profits should not be held exclusively accountable for the (leadership) development of their human resources. From the findings of our study, we conclude, among other things, that there is an urgent need to build more overhead tolerance for non-profits on the part of stakeholders (such as funders), which recognises or even appreciates investments in HR infrastructure as instrumental to sustainable operations.  This way, non-profits can operate according to modern HR standards and thus professionally add to the common good in our shared, volatile world.

About the Author

Nils Geib is a research assistant and PhD candidate at the Chair of Nonprofit Management of Prof Silke Boenigk at the University of Hamburg, Germany. His current research focus is strategic leadership in non-profit organisations, with a particular focus on talent and succession management, as well as leadership development. He is a former assistant and a global ambassador of the Leadership Excellence Institute Zeppelin (LEIZ).

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