Executive Director Transition Plan

I am pleased to report that the SPJ national board of directors unanimously approved a plan for the executive director transition that I presented in our June 1 board meeting. The plan includes hiring an outside search firm to work with the Executive Director Search Committee and a consultant to work on an organizational assessment, which among other things, will aid the new executive director.

Naturally, hiring an outside consultant will result in a higher cost than doing the search entirely on our own. However, a financial analysis shows that much of this cost will be offset by not having to pay salary and benefits to a full-time executive director for several months.

These consultancy fees will need to be shared by the Society and the Foundation. The next step is for SPJ Foundation President Irwin Gratz to present the plan to his board. I reached him by phone while he was on vacation, and he approved of the memo below. He plans to present the plan to his board upon his return.

The original memo, which was discussed in executive session, has been edited to remove confidential details about contract proposals, salary and other human resources information. The names of specific consultants who submitted proposals have also been removed. We will announce a consultant once one has been hired. Nothing has been added to the memo below that was not in the original memo approved by the board.

 

From: J. Alex Tarquinio, SPJ National President

To: SPJ Board of Directors

Re: Executive Director Transition Plan

Date: May 31, 2019

This report provides the following:

A) An overview of the leadership transition process if consultancy services are retained;

B) a recap of the evaluation of the firms examined, including one recommendation for an organizational management consultant for the interim, and two options for executive director search consultants;

C) a financial analysis of the project; [Not Included in Freedom of the Prez]

D) personal recommendations;

E) work proposals from the consulting firms. [Not Included in Freedom of the Prez]

A)

An Overview of the Recommended Executive Director Search Process

The circumstances leading to this executive director transition and the immediate and long-term needs of the staff and the organization should lead the board to adjust its approach.

The core of this search process, however, will remain the same. This has been clearly identified in Bylaws and policy, namely: “The Presidents of SPJ and the SDX Foundation shall appoint an equal number of members to a search committee.  The SPJ President shall appoint one additional member to serve as committee chairman with voting privileges. The committee will forward a list of one or more candidates it deems qualified, from which the SPJ Board of Directors will vote to hire the Executive Director. The SPJ Board of Directors shall immediately notify the SDX Foundation of its decision.”

Irwin and I were in touch about this before his departure, and I am pleased to announce the Executive Director Search Committee at this time. Irwin has appointed himself, Dr. Battinto L. Batts Jr. and Michael Bolden. I have appointed myself, Patti and Matt. Finally, I have invited Hagit to chair the committee.

In every SPJ executive director search in recent memory, the Executive Director Search Committee has completed the task without the benefit of an outside search consultant. The primary costs included flying in candidates and the committee members for interviews in Indianapolis and a background check of criminal and credit records for the finalist only. While this approach is economical, it is not generally considered among a nonprofit board’s best practices.

After a great deal of study, guided by an ad hoc transition committee, I recommend that the board approve funding for both an organizational assessment and a retained executive director search firm. (Find my specific recommendations at the report’s conclusion.)

An Overview of the Recommended Interim Plan

An ad hoc transition committee with leaders from both boards—which included the six members of the SPJ executive committee, plus Irwin and Hagit—met on May 13. It expressed a strong preference for hiring a consultant to perform an organizational assessment that would benefit the new executive director. They also advised having the management consultant work part time from our headquarters to provide a level of staff oversight and guidance during the interim. This would obviously raise the cost of the study but would be dramatically less expensive than hiring a full-time professional interim executive director.

Under this plan, the management consultant will work in the office on Mondays and Wednesdays. The consultant and I chose these days because they coincide with the days that Jake is on site, and because the weekly staff meetings have been held on Wednesday mornings and we felt it would be best for staff morale to continue familiar routines during the transition.

The consultant plans to meet regularly with the staff while simultaneously developing a long-term organizational assessment that will be completed by EIJ. This assessment will focus on three critical areas: human resources, financial operations and technology. We identified these as most in need of both immediate support during the transition and long-term improvement. The consultant is a human resources expert who will look at work flow, capabilities and communication. The financial assessment will look at current operations and recommend best practices both during the transition and once we have a new executive director. Finally, the consultant has advised clients on implementing new CMS software for HR departments, so although she has not worked with NAME OF SOFTWARE, which has its own support services, she is familiar with best practices for transitioning to a new CMS. (See attached proposal from NAME OF CONSULTANT.)

Additionally, the consultant would be a troubleshooter. She would communicate with me weekly and perhaps more often if she discovers issues that she feels require swift action. Linda will still be the go-to staff member in terms of HR questions. If the staff has top-level questions about programming, they will continue to come to me. I have also told the staff I will be visiting the office more frequently over the summer. (As an aside, it is my hope that my next swing through Indy will be to introduce the new consultant to the staff!)

Recap of the Evaluation Process and Recommendations

1)

Organizational Management Assessment (part-time on-site)

One Recommendation: NAME OF CONSULTANT

Patti laid the groundwork for the May 13 meeting by speaking with three management consultancy firms for half an hour each about their rates for three distinct services: an interim executive director, an organizational management assessment and an executive director search.

First, the ad hoc committee discussed the fact that we had no budget for an external ad interim executive director, which came in at a weekly rate of $3,500 to $6,000 (an annualized cost of $182,000 to $312,000). It should be noted this cost would only provide an interim director on site and would not include an organizational assessment. Additionally, the staff had clearly expressed a strong preference for not hiring an outsider to manage them during the transition. Therefore, the ad hoc committee unanimously agreed to continue as we had done since the executive director’s departure. I informed the staff of this decision two days later, during the weekly staff meeting, and Linda explained it succinctly. She told them she would keep the lights on, and if they had programming questions, they should ask Alex. I will also continue to receive regular reports from the staff that will inform the Weekly Reports.

Although the ad hoc committee found the cost of an interim executive director prohibitive, they did think it might be wise to have a management consultant spend two days a week in the office to support the staff and alert me to any unknown issues. Ultimately, the consultant would be working on a report that the ad hoc committee felt was key to SPJ’s long-term success.

Based on Patti’s initial research, we had identified our top two choices, both local Indianapolis firms recommended by our auditor. Patti’s third call was to a consultant in NAME OF STATE. Patti described a general lack of enthusiasm, “as if they were taking the call mostly because NAME OF PERSON asked them to.” We also felt there were advantages to working with a local firm.

I had multiple hour-long phone calls with each of the two Indianapolis firms to describe the project in detail. When I told them about the hybrid role of providing two days of oversight plus a consultancy report, one firm was interested: NAME OF FIRM. The second, NAME OF FIRM, said this would not play to their strengths, but recommended another local consultant. In a phone call with the referral, the owner struck me as disinterested and said she would talk with her associates to determine their capacity. Ultimately, she decided not to submit a work proposal.

In short, only one of the firms canvassed was interested in this hybrid project, but fortunately, it is a terrific fit. The firm was recommended by our long-time auditor. Indeed, NAME OF PERSON, NAME OF FIRM’s owner, used to work for the auditor and participated in an SPJ audit about five years ago. She will oversee the project, and her background in finance complements the HR background of NAME OF PERSON, her colleague who will be on site. Their office is only a few minutes from our headquarters so it will be easy for her to work from our office two days a week while keeping in touch with her colleague. I believe they will blend in nicely with our staff culture. Even better, they are familiar with SPJ and our mission, and excited to work with us.

When I visited headquarters on Wednesday, I informed the staff that the board was considering hiring a management consultant to do an organizational assessment and to work in the office two days a week. This was my first opportunity to discuss the interim plan with them since the staff meeting two weeks before and I emphasized that it would require budget approval by both boards. I then met off site with the two NAME OF FIRM consultants for 2.5 hours to discuss the project so they can prepare a project plan if budget is approved. I have since followed up with NAME OF PERSON by phone to discuss the proposal she sent late Thursday night.

 

2)

Executive Search Service

Two Options:

  • Full-service Retained Search: NAME OF FIRM
  • Discounted Facilitated Search: NAME OF FIRM

The ad hoc committee did not reach a consensus about hiring an executive director search service, with some members worrying about the cost while others thought the main benefit would be speeding up the search. The last executive director search required six months, with additional time for a background check and relocation. Both firms listed below said the Sept. 5 board meeting was an ambitious goal, and although it may be possible, they would not commit to a project end date. It should be noted, however, the likelihood of meeting that goal by EIJ without a search firm is almost nil.

Below are brief descriptions of the work plans for both firms who submitted work proposals.

NAME OF FIRM

NAME OF FIRM will only perform a full-service “retained” executive search. This means we would retain the firm on a 100-day exclusive agreement, which may be renewed if we have not yet hired a candidate. NAME OF FIRM would work with the Executive Director Search Committee to draft the new job description, including developing surveys for the staff and board to gauge their goals. Based on this input, as well as information from the simultaneous organizational assessment, they would develop the candidate pool by contacting strong candidates at national nonprofits who may not be currently looking for a new job and pre-interviewing them to gauge their potential interest in the opening. They would not passively publish job board ads, although we would be welcome to do so if we so desired, and of course we would notify our members and use our social media to promote the opening. These candidates would receive the same screening as recruited candidates. Finally, they would guide the Executive Director Search Committee through a series of interviews with the finalists.

NAME OF FIRM

The owner of this firm described it as “more of an alternative to the board doing it themselves rather than a traditional search firm.” NAME OF FIRM would perform a locally-sourced “facilitated” search, contacting nonprofit leaders in the Indianapolis region and telling them about the opening. They would not conduct a national search or do the same level of pre-screening of potential candidates. They would screen the submissions from SPJ networks or job board postings. They would work with the search committee during the interview process but would not “build the candidate pool” in the traditional sense.

C)

Project Financial Analysis

The financial analysis of our cost savings was provided by Jake, who as our CPA, believes this plan to be a wise investment of our funds.

First, Jake says both the Society and the Foundation have the assets to fund a robust executive director transition plan. The Society has around $850,000 in a rainy-day fund, and the Foundation has assets of around $12 million.

Furthermore, he points out, there will be considerable cost savings while we are not paying a full-time executive director.

A DETAILED FINANCIAL ANALYSIS OF THE RECENT EXECUTIVE DIRECTOR SALARY AND BENEFITS AND THE SAVINGS OVER A PERIOD OF TIME HAS BEEN REMOVED, AS HAS A DETAILED ANALYSIS OF TWO BIDS: OPTION ONE FOR THE ASSESSMENT AND RETAINED SEARCH BY THE SAME FIRM, AND OPTION TWO FOR THE ASSESSMENT BY ONE FIRM AND FACILITATED SEARCH BY ANOTHER. THE FIRST OPTION WAS STRONGLY RECOMMENDED.

D)

Personal Recommendations

My strong recommendation would be hiring NAME OF FIRM to perform both services. This plan would immediately provide the support the staff needs during the transition, while ultimately setting the new executive director up for a higher likelihood of success. Furthermore, retaining the same firm for both services would lead to synergies because the consultants may discover issues during the assessment that informs their candidate pool recruitment.

I do not recommend the second option. However, if the boards decline to fund the full project, my secondary choice would be hiring NAME OF FIRM for the assessment and NAME OF FIRM for the facilitated search. I believe the first option is more likely to secure the best possible candidate.

I strongly advise against foregoing either of these services.

Respectfully submitted,

J. Alex Tarquinio

SPJ National President

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