Executives and Organizations in Transition
– Part One

Today’s guest blog post is written by Kevin Patterson, Senior Account Executive, PatronManager.

It is a fact of life that people change jobs. Whether it is for professional growth or other reasons, organizations are facing more job transitions as a result of the improving economy. While it can be inconvenient to replace an employee, what happens when that employee is the head of your organization, an executive or general director? To use a football sports metaphor, think of what happens when a football team replaces its quarterback? Sometimes it goes well, other times it doesn’t. What can your organization do to prepare for an effective transition?

If the transition is one of executive succession, the current executive is a huge asset to the transition process. If the current executive is no longer with the organization, then it falls to the board of directors to onboard the new executive. Let’s look at the important issues that should be part of any successful transition.

  • Financial Reports
  • Marketing Plan
  • Development Plan
  • Artistic Plan

While each organization is unique and may choose to add additional items to this list, every organization should start with these items. Let’s break each of these down.

Financial Reports

It goes without saying that a new executive director should have a clear understanding of an organization’s financial position. I have been surprised over the years just how poor some organizations accounting practices are. In an extreme case, I once went to work for an organization that didn’t know it was illiquid! While this speaks to lack of oversight by the board, that’s a completely different topic for another day; it also demonstrates how important financial accounting is to a transition.

In addition to looking at Profit and Loss and Balance Sheet statements, the CFO and the head of the finance committee of the board need to sit down with a new executive and go through each with a fine tooth comb. In addition to the above statements, every organization should have a cash flow statement and forecast. Cash is king in every business, and a good looking P&L or Balance sheet means little if there is little cash on hand to conduct operations.

An organizational budget would seem to be a given for any new executive to scour for useful information about an organization. Beyond the budget summary, take time to dig more deeply into each functional area.

  • How does the marketing budget link to expected revenue projections?
  • How does the development budget link to cultivating, renewing and upgrading donors?
  • Does the production budget contain a lot of boilerplate numbers? Has the cost of labor been accurately calculated?

While financial statements provide good performance indicators, they are backward facing documents. In part two of this series, we will examine the two areas that drive revenue for the organization, marketing, and development.

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