Your Board's Role In Talent Management

Tony Martignetti
Hello and welcome to Tony Martignetti Nonprofit Radio, big nonprofit ideas for the other 95%. I'm your aptly named host and the podfather of your favorite hebdomadal podcast. Oh, I'm glad you're with us. I'd be stricken with scleroderma if you hardened me with the idea that you missed this week's show. Here's our associate producer Kate to tell us what's coming.

Kate Martignetti
Hey, Tony, here's what's coming. Your board's role in talent management. With a strong CEO-board relationship, your board plays a valuable role in talent decisions that impact your culture, Equity, and sustainability. Likewise, with executive compensation and evaluation, developing a leadership pipeline, and succession planning. What does that strong CEO-board relationship look like? Allison Wyatt, CEO of Edgility Talent Partners, shares her expertise. On Tony's Take Two.

Tony Martignetti
Tales from the Gym: The Errant Ball Under My Foot.

Kate Martignetti
Here is Your Board's Role in Talent Management.

Tony Martignetti
It's my pleasure to welcome the founder and CEO of Edgility Talent Partners, Allison Wyatt. Edgility is an equity-centered human capital consulting firm serving nonprofits nationwide. With more than 20 years of experience across the private and social impact sectors, Allison advises CEOs and boards on compensation strategy, leadership transitions, and building high-performance, values-aligned talent systems. You'll find the company at edgilitytalent.com. Thank you, Marc. And you will find Allison on LinkedIn. Allison Wyatt, welcome to Nonprofit Radio. Thank you, Tony. It's a pleasure to be here. I'm glad you are. This is a very interesting topic. We're talking about the board and talent, and we'll talk some about succession planning and executive compensation and all these things that seem like appropriate roles for the board, but I'm not sure boards are managing these things as closely as they ought to be, or maybe in some cases like too tightly, uh, you know, if it gets into day-to-day type talent decisions, we don't, we don't really want the board there. But, uh, just give us an overview of the board's role in, uh, in, in, in, yeah, in these talent decisions.

Allison Wyatt
Yeah, yeah. I mean, I think that there's so many different flavors of this that we see, but really what we want boards doing is, is proactively managing these things before crises emerge. So often these governance practices are built when there's some sort of leadership transition or, you know, crisis. And really what we want to see boards doing, their job is to be setting clear goals with the CEO, clear standards for performance, doing a robust and really effective evaluation each year, making sure they're looking at market data for compensation and building, you know, that strategic compensation plan. And oh, by the way, having a good succession plan in place so that the organization isn't caught off guard and unprepared when— and I say when, not if— when an inevitable transition occurs at some point in time.

Tony Martignetti
So if we are the CEO, we feel our board is not meeting the sort of expectations that you just laid out, you know, high level.

Allison Wyatt
Yeah.

Tony Martignetti
How do we start the conversation? Do we start with the board chair? Hopefully, we have a good CEO-board chair relationship. Yeah. What does that conversation look like?

Allison Wyatt
Yeah, absolutely. You know, I do think that CEOs can wrap it into their own organizational planning. From a compensation standpoint, It can feel awkward to bring that up for yourself as a leader, but I think that you can attach it to your own organizational budgeting process and your own organizational compensation process. So I would say, hey, we're doing a compensation study for all of our staff, and we're going to be looking at market rates and thinking about our own internal philosophy, and I want to make sure we're walking that walk. at all levels of the organization. So we need to be thinking about how that intersects with executive pay. Do you all want to connect with, you know, that process and be part of that too? Um, so that's one way to do it. And similarly for evaluation, I think a lot of times it's just asking, you know, a lot of— most often we find that boards are just not doing that, doing an annual evaluation. You know, maybe they have a good relationship with their organizational leader, and they're just sort of assuming everything's going well, uh, and they, they don't feel a need to do it. And so as a leader, usually if you just ask, hey, I'd really love to have a more, um, you know, targeted evaluation process this year, can we talk about what that might look like? Um, and then on the succession planning front, that's probably the scariest one for an org leader to bring up because you don't want to like insinuate you might have one foot out the door. But I think it's just always best practice, right? I think saying Hey, we should be thinking about developing our own internal bench of leaders so that if and when something were to ever happen and I wasn't at the organization, not that I'm planning to leave, you know, and by the way, healthy organizations have that conversation early. Like you might say, I'm thinking I'm committed to being here for the next 5 to 7 years or whatever that timeline looks like for you. But we still need to start thinking about that now because it takes time to build people into an executive level role. Yeah.

Tony Martignetti
These conversations, uh, are they, um, given to a board committee? Maybe different committees based on— because we're talking about a lot of different things. Yeah, succession planning, we're talking about executive compensation, they're also talking about overall compensation study.

Allison Wyatt
Sure.

Tony Martignetti
You know, potential executive transition. So maybe there's different committees, or where, where does this reside on the board?

Allison Wyatt
It's usually going to be your executive committee. Or sometimes boards do have an HR committee. They have like a specific committee dedicated to this type of work. So I would say if your board doesn't have that, then the executive committee is where I would go.

Tony Martignetti
Okay. Okay. And is this a— you had said annual, you know, so annual review. But now, so we also need to be benchmarking. How do we need— we need a consultant to help us benchmark? Are there studies that are available?

Allison Wyatt
Yeah.

Tony Martignetti
That are in the public domain, maybe that, that are valuable for us in, in our small to mid-sized nonprofit? How do we do this, the benchmarking of, let's say, the overall, not just the executives, not just the CEO compensation? We'll get to that. But if we want to look, we want to look overall at our, at our agency's, uh, compensation structure.

Allison Wyatt
Sure. I don't think you need to do this every year. I think you can do it every couple of years. Every 2 to 3 years is fine. And then just do annual rate of inflation in between, right? Um, the, the thing I would say, you can certainly do this on your own, right? You can look— and, and by the way, I wouldn't necessarily rely on one single data source. So you mentioned there are good surveys. Mm-hmm. Nonprofit Times has a good survey. There are lots of different surveys you can, you know, invest in depending on your geography and what specific sector you work in within the nonprofit space. Um, and then of course there's also 990s. There's publicly available data. The thing I would say is that the— you need to be really careful about how you do this because the— it should— one mistake organizations often make is having the leader do it themselves. And that's actually a really good way to get yourself into hot water if you're ever audited, right? Uh, this is really the board's responsibility. And as you can imagine, there's a conflict of interest for the leader to do them this themselves, right? Mm-hmm. So even if the leader does a great job and they, you know, are, are very unbiased in their approach, approach. The IRS doesn't like that. So I would say the board should do it, or they should engage an external firm to do it. And the reason to engage an external firm is if you don't really know what you're doing, because there's a lot of nuance to that process. A lot of times you're going to be looking across multiple different geographies to get a good sample size of foundations. You know, you don't want to rely on 3 organizations, for example, you want to get at least 20 data points. So you might have to go into different markets, and then you start to have to adjust your data for cost of, you know, labor in different markets. You also need to age it because every 990 form, sometimes you can't— you have to go back a couple years to get the right data. So I would say if you know what you're doing and you've done this before and you know the right methodology, it's something you could try on your own. If it's a little bit less clear in your situation, then I would, I would encourage you to invest in professional help. It's not expensive and it's really important that you get it right.

Tony Martignetti
Okay, 'cause you had mentioned, you know, the 990s and I was, I was thinking, well then how do you know which agencies, nonprofits to use to look at their 990s? And then you're saying, you know, there's a lot of different offsets and compensations that you'll have to make if for geography or size of the institution. Yeah, I got a few arts societies come to mind first.

Allison Wyatt
Exactly. You want to compare apples to apples. So you want to be looking for organizations that are as similar as possible. You know, the funny thing is I always say, like, most people don't, you know, spend their weekends reading about compensation, compensable factors, compa ratios, things like that for fun. So, you know, it— you almost can be like, no joke.

Tony Martignetti
Does anybody? Does anybody do that? Do you do that?

Allison Wyatt
Well, I do that, you know.

Tony Martignetti
Do you do that for fun? Is that your light reading?

Allison Wyatt
Yeah, exactly. Is that your beach read? Your beach

Tony Martignetti
So if you're not into spreadsheets and Excel sheets, you need to get some help. Yeah,

Allison Wyatt
exactly. So yeah, if that's not your jam, it does get pretty technical, and I do think having some help is valuable. It's not, you know, I think that there are some things like many of us are doing things like leadership development reading and investing in how to develop and grow people. So that's a little bit more accessible, but compensation can be somewhat nuanced, and there are IRS guidelines that you need to adhere to, particularly when it comes to the executive, and it's It's also publicly available data. So if you do it wrong, it's out there and everybody can see it. So I would say it's, it's probably best to err on the side of caution there.

Tony Martignetti
Okay. And again, this is a board, a board process that we're talking about. I mean, the CEO is involved. And like we said, the CEO may be the one who's kicking off the conversation, getting things rolling. But it's— we're talking about a board responsibility. Every 3 to— you said 3 to 4 years or 3 to 4?

Allison Wyatt
Yeah, I like to see orgs do it every like 3 years at least, but you can just do like the cost of labor. But then the thing is, all the market's going to tell you is what the market rate is, and then you build a range around that. And then the question is, okay, well, based on the individual in the role, where should that person fall on that range? And that's where the annual performance review is so critical. So I think that a lot of times people think of those things as totally separate, but you want to be thinking about the 2 things in tandem because they do intersect in many ways. Um, and so you want to really be thinking about how does the individual in the role stack up against kind of individuals in the market. Is this a brand new CEO that's never done this job before and is still kind of learning, or is this a really seasoned professional who's been with the organization for a decade, right? Depending on the answer to those 2 questions, that's also going to influence where you would place them against the market. And so you— that's, that's also some of advice a consultant can give you around, you know, what are some of those things you should be considering. Um, executive pay often takes more into consideration than just salary too. Like, you're often going to have incentive bonuses or other perks that, you know, you, you, you have to be thinking about as well. Uh, and so that's where having not just the— the, the 990s are going to give you like the total value of the total package, but you aren't going to necessarily get going to know, well, what's actually in that total package, right? Um, so there's a lot of complexity, I would say more so with executive comp than, you know, your other positions in the organization that a— that an expert can help you untangle. Um, and then you have to think about, again, not just what you find in the market, but who's, who's doing the job, how well of a job are they doing, where are they in their career, etc., etc.

Tony Martignetti
You also have thoughts on These— how these decisions that you make that you're describing right now reflect the organization's culture.

Allison Wyatt
Yeah.

Tony Martignetti
And values and equity. So flesh that out too, how these are not just dollar and— these are not just dollar and sense decisions. They reflect something bigger for our organization.

Allison Wyatt
They really do. And I think that we, we never want to think about executive compensation in isolation of the rest of the organization. And we see that happen so often. So it typically looks like one of two things. Either the executive has become a martyr and is accepting a compensation that is way below market because they think they're doing something good for the organization, right? They're not, because what they're doing is they're actually now depressing the compensation for everyone in the organization. Mm-hmm. Artificially low ceiling and it trickles down. The other thing is they've now created an unsustainable financial model. What happens when this individual leaves the job and we actually have to go out and pay someone a market rate? Right now we have an unsustainable model that we can't afford to do in the long run. So it's really important to make these salary decisions not based on the specific economic factors of the individual in the job and what they can afford to take, but on what is fair in the marketplace and is best for the organization in the long run. The other thing we see organizations do is say, we want to be really competitive. Boards say, we love our leader. We want to be really competitive. We're going to pay them at the 75th percentile of the market and give them a really competitive package. And then a year later, they hire a compensation firm to benchmark the rest of the organization. And lo and behold, the rest of the organization is being paid at the 25th percentile. And now you've created this really big inequity where Everyone else is being paid under market and your leader is being paid way, way above market. How do you explain that to your employees, right, who are on the front lines? So you really have to be thinking about this quite holistically if you want to do it in a way that's aligned with the rest of the org and with your values and with the long-term sustainable— sustainability of the organization.

Tony Martignetti
Hmm. Yeah. Very, very interesting. Right. How, how do you defend it? Plus you said it's all public data.

Allison Wyatt
Yeah.

Tony Martignetti
The IRS has tests or a test, right, for executive compensation. And there's a safe harbor. Can you explain the safe harbor rule, what you can do to make your executive compensation fit within the safety bounds?

Allison Wyatt
Yeah. And this is one where, wouldn't it be nice if everything were completely black and white and they didn't leave any room for interpretation or gray? It is somewhat nuanced. Status, similar to like FLSA status and things like that. Um, you know, I think that at the heart of it, what they want to see is that you have a— you have reasonable justification for the, uh, target compensation that you've determined. And what that means is that you've looked at the market, you have compared your organization to similar organizations in And we're

Tony Martignetti
talking now just about— this is the CEO compensation, right?

Allison Wyatt
Exactly.

Tony Martignetti
That's— this is specific to that.

Allison Wyatt
Okay. Exactly. Yeah. So this is executive compensation.

Tony Martignetti
Just making sure. Yeah. This is just the CEO. Okay.

Allison Wyatt
Yeah, exactly. So basically, uh, they want comparable data, right? They want documentation. So it can't just be like in somebody's head somewhere. And they want independent approval. So that couldn't be your board. This is what I mean where you don't want— like, I— and I see this a lot where the board will say, like, hey, we're gonna let the CEO go out and do all the benchmarking, and the CEO will give us a report and we'll rubber stamp it, right? That's, that's, that's a conflict of interest according to the IRS. And so what they want is independent, an independent process and approval of that process. So the board has to do this, or they have to hire a consultant that is operating independently to do it. And it's funny because sometimes the board will hire us and say, we really want you to work with the, with the CEO, and, and you know, do this whole thing and then show us it at the end. And we're really cautious about having there be a clear, uh, a clear divide in how we engage the leader so that we aren't creating any conflict of interest. So for example, we might interview the leader about the talent market and what organizations they compete with for talent, but we're going to approve the final list with the board, right? We may interview the leader about their priorities so that when we start thinking that about the total mix of compensation and whether we try to like implement things around retirement versus, you know, current cash compensation. You can play with that mix as much as you want, but we're not going to like start negotiating with them about what the total, you know, what the total amount should be. So I do think that that independent perspective is one of the areas that organizations often get into hot water around because they delegate too much of the process to the leader.

Tony Martignetti
While we're talking about the executive compensation, let's talk about executive evaluation. I assume that should be annual.

Allison Wyatt
Yeah, that definitely is.

Tony Martignetti
Is that also, uh, same place, the executive committee, if you don't have an HR committee?

Allison Wyatt
Yeah.

Tony Martignetti
It's also executive committee. Let's talk about your— the executive evaluation, uh, annual process.

Allison Wyatt
Absolutely. Yeah, this is one that we often find just isn't happening, and it, it's such a— it's such a shame because, you know, if you think about it, it's your greatest lever for making sure there's very good alignment between the leader and the board, making sure that you have clear expectations around what, you know, what would be a, a slam dunk year, right, for the leader, but also making sure that the CEO is getting the same support from a professional growth standpoint as all of the other staff in the organization. And we want boards to recognize in this process that they have limited visibility. They only see the leader of the organization in very unique circumstances. And so getting as much perspective in this as possible is critical. That should include a self-assessment, but it also should include some 360 feedback from the leader's direct reports, from others in the organization, sometimes even from external stakeholders. If they have a leadership coach or if they're doing a fellowship program, other colleagues that see them in action.

Tony Martignetti
Mm-hmm.

Allison Wyatt
Giving the board that that more robust view of the leader's performance is going to allow them to support them in, in better ways. Um, so that's something we always encourage that, you know, boards are doing regularly. Um, it seems like it should be a no-brainer because we— everybody— it's like everyone else in the organization gets this every year. Why wouldn't the leader get it? But I think a lot of times the board just operates on good You know, oh, we think they're doing a great job. We don't really have any other insight to share, and these things don't happen. And the risk there is that it's not hard for there to be a breakdown in communication. And I'll give you a specific example. So we had a client that had a leader that had built a hugely successful— was growing an organization extremely successfully over a period of 10 years. Years. Anyone looking into this organization thought it was a great success story, right? There's some turnover in the board, and over the course of 2 to 3 years, they have a different vision about where they see the future of the organization. There's no conversation, there's no annual review process. This is someone who's been there for 10 years. Everybody just assumes we're all on the same page. And in the course of 1 year, they have an exit. The leader leaves. Because of a mis— because of this miscommunication. They have no succession plan. It happens late enough in the year that they sort of scramble and put a new leader in place that the community rejects. They go into debt by $1.8 million in one year. They lose 3 key relationships with 3 key funders who were very loyal to this leader who left, and they go through 4 leaders in 3 years. Okay, and that was a very successful nonprofit that everybody would have thought was on autopilot, 200 years old. So this is one of those things where it can go— when it goes bad, it can go so bad so quickly. It's like a— it's almost like a, uh, your— I, I, I use the metaphor of like, you— if you go to the dentist every year and you brush your teeth every day, like, you're probably not going to end up with a root canal. But if you don't, you know, like, you're gonna have to do all this reconstructive, you know, just so, so And it's like, that's what these annual performance reviews are. They are the twice a year, you know, dental appointments that you do, not because there's a crisis, but because you don't want there to be.

Tony Martignetti
Yeah, right. You're trying to prevent one.

Allison Wyatt
Exactly.

Tony Martignetti
And so this is all done outside the hearing of the CEO, right? All the gathering of the data. Yeah. You mentioned, you know, outside stakeholders. Maybe there's a coach or mentor that the company, the nonprofit is paying for. You want that person to do it. Yeah. This is all done outside, and then the board has a meeting and a review just—

Allison Wyatt
Exactly.

Tony Martignetti
With the CEO.

Allison Wyatt
You have a conversation.

Tony Martignetti
Just the way every other employee has at least annual review, maybe even more often than annual.

Allison Wyatt
Exactly. Exactly. Yep.

Tony Martignetti
Okay. And then the compensation conversation is going to follow from that.

Allison Wyatt
Exactly. And my advice to boards is if you're listening to this and you're saying, wow, we don't do any of those things, right?

Tony Martignetti
Yeah.

Allison Wyatt
Start with the evaluation. Then move on to the compensation work and then worry about your succession plan. And, and I hate to— here's the thing. I hate to, I hate to sort of like— I think the reason I would do it in that order is because you are going to start as part of that annual performance review conversation. You're, you're naturally starting to open up a conversation about the future, and you can start to talk about what the person's long-term goals are. How long they think they want to stay in this role. And then you have a sense of, okay, if we're putting together a succession plan, what is the, what is the most realistic timeline that we're working toward? Right? Because I always like to say, like, every organization has a succession plan, whether they know it or not. Right? You'll, you'll find out what it is when the person leaves.

Tony Martignetti
Oh, yeah. When you have a crisis.

Allison Wyatt
Exactly. So, so get ahead of it and start working toward it over time.

Tony Martignetti
That's your default plan versus an actual plan that, that you've constructed. Not the— Exactly. Not the default.

Allison Wyatt
Yeah.

Tony Martignetti
All right. All right. I see, uh, I'm talking to an Influential Woman of 2026.

Allison Wyatt
Yes.

Tony Martignetti
Behind you, framed. Uh, who, who bestowed that honor on you this year?

Allison Wyatt
Oh yeah, this is, uh, it's just an organization called Influential Women. And, you know, one of the things One of the things I'm really passionate about is female entrepreneurship as a female entrepreneur. And so this organization had reached out and it was an interesting opportunity to pursue. It's a great network of really incredible women doing amazing things.

Tony Martignetti
So this was not one of them where you pay $2,500, right? They name you an influential woman. That wasn't— that wasn't this, right?

Allison Wyatt
Yeah. The other one I really love, to put in another plug, is Dreamers and Doers. That's another great network of some pretty incredible women.

Kate Martignetti
It's time for Tony's Take 2.

Tony Martignetti
Thank you, Kate. I got a new Tales from the Gym. We were in our Tuesday aerobics class and we were going, bouncing from foot to foot, kind of, you know, in a cardio way. And I was talking to a friend of mine, And we had small balls, like 6-inch diameter balls near us that we weren't currently working with in that moment, but everybody had 1 or 2 balls with us. So as I was bouncing back and forth, Val— remember Val from class, the old Mrs. Blood and Soil? because she, she was very particular about her spot when I was, when I was in my very, very first class, and I had no idea 2 years ago whose space was whose. Anyway, so Val is behind me, and as she was bouncing around foot to foot, one of her balls rolled under my foot just as I was landing. So my right foot lands on her ball now, errantly placed under my foot, and I go down. Um, and I felt it. I— so I, uh, you know, and everybody's— they stopped the music, and everybody's, you know, the instructor Danielle comes over, and Val comes over apologizing that she— I guess she kicked her ball or somehow. I think she had kicked it, and that's how it got over to my spot. So I was okay. I was able, I was able to finish the class. No, no 911 call or anything like that. I finished the class, but I felt it. I felt it for a few days. At first I thought it was my ankle, but it wasn't. It was really just the, the muscle on the top of the foot got stretched. It was my, my foot kind of stretched outward further to the right. Oh, wow. Over the ball, her ball. So, so it was the top of my foot that got stretched bad, and I felt it for like 2, 3 days. I iced it a little bit, you know, a couple of ibuprofen. I was fine, I was fine. But, um, then the next class, everybody was very concerned about, you know, how's your ankle? How's your ankle? I said, it's not my ankle, it's my foot. And I said that about 6 times. Everybody still asked, how's your ankle? Even in the next class, how's your ankle? Um, but it, it turned out fine. It was just, like I said, 2 or 3 days of injury. Uh, Val felt terrible. The next class, she was apologizing profusely again. I said, you know, what are you gonna do? You know, I'll see you in court because of course I'm gonna sue you for negligence. Um, which, which I have— I already filed the summons and complaint against her. Uh, no, that's— no, there's no lawsuit. There's no lawsuit. Um, I think the gym might have been concerned, the community gym. Because someone asked me, some one of the administrators at the gym asked me how my ankle is. Of course, again, I had to say it's not my ankle. But so I don't know if they were concerned that there was going to be a lawsuit. But of course not. I mean, these things happen. What are you going to do? You're in a gym class, for Pete's sake. So that's all. Just a little tales from the gym. Val felt very bad and was actually very gracious. So it all worked out just fine. And that's Tony's Take 2. Kate?

Kate Martignetti
This sounds like a very long, long-awaited revenge for taking her spot to me.

Tony Martignetti
Very long

Kate Martignetti
revenge. I

Tony Martignetti
hadn't thought of that. Oh, 2 years. She holds a grudge for 2 years. And then since it's so So long in the, in the, in the future from, from my aggression toward her that nobody would put two and two together, right? Oh, very interesting. She kicked that ball on purpose, maybe under my leg, under my foot. Could be. All right, Kate, interesting. Long, long-held vengeance. It was a vengeance attack.

Kate Martignetti
Vengeance. Oh, that's an even better word.

Tony Martignetti
Oh yeah, vengeance. Vindictive. She's a vindictive Val with vengeance.

Kate Martignetti
We've got just about a buttload more time. Here's the rest of Your Board's Role in Talent Management with Allison Wyatt.

Tony Martignetti
I love seeing women CEOs. Yeah, I love seeing women CEOs.

Tony Martignetti
I also love seeing women in technology, technology jobs, chief technology officer, or founders Founder of a tech company. I love seeing women taking those roles because there's you're there. They're so underrepresented in in the C suites and in in technology. Yes. So I I love seeing both the boundaries sciences too. I guess the sciences as well as sciences and technology.

Allison Wyatt
Yeah, absolutely.

Tony Martignetti
Well, congratulations on being an influential woman 2026. And now what happens when when January comes? It's like. That now, right, what have you done lately? What about—

Allison Wyatt
Exactly.

Tony Martignetti
Your influence is all in the past now. You're gonna need a new framed, uh, certificate for 2027. All right,

Allison Wyatt
right.

Tony Martignetti
Um, all right, so let's talk with some about succession planning. We've, we've talked around the edges of it a little bit. Uh, what is a, what is a serious succession? This is also, this is board, this is the board thinking about, uh, still. So we're still at the executive committee, most likely. Again, if we don't have that, if we don't have the HR committees, most likely still the executive committee. What, what, uh, what does the succession plan development look like?

Allison Wyatt
Yeah, and, and again, I think that this is a conversation I would highly encourage the board to start. It can feel very high stakes and scary as a leader to come into, you know, your board and, and talk about when, when you're, you know, the plan for when you leave. Um, I think that the annual review is a great time to do this because you're talking about the future and growth plans. And that's a great time to invite— open the conversation around what is this person's goals, where do they see themselves in, you know, 5 to 10 years from now, 2 to 3 years from now. Create some safe space to have this conversation because what the reality is, every leader eventually leaves. And I will tell you, I, I, I've done a lot of recruiting and worked in, in a past life in executive search. Most— everybody knows that their leader is going to leave someday. But every single time you do a search, it's like there was no succession plan in place. And there was like nobody actually talked about this, right? So this is like something we know it's going to happen. Let's just talk about it. The longer runway you have, the better. Because again, these are these executive-level positions. When you think about building your leadership bench to step into that role, it takes a lot longer to develop somebody. To step into that role, uh, than, you know, more junior positions down, you know, down the ladder. So, uh, and I do think that the other thing I will say is a lot of times the CEO has someone in mind and is cultivating them and grooming them, but that individual hasn't been given exposure to the board yet. And so the board isn't thinking of them as a successor. That's the other thing I would say is, is we, we see that a lot where we have really strong internal candidates that's— that have never gained their sort of credibility with the board. And so the board's going out and doing this whole external search and not really considering them just because they never got to see them in action. So part of your succession plan as a board is not just to think about, you know, how do we— it's not just to think about who might be in a position to step up, but to actually start to give those individuals some opportunities to get in front of you, present things, Represent the org externally, like, like test them out and see, uh, see how they do so that you start to get— build your confidence level as well. And you give people an opportunity to step up before there's a vacancy they're stepping into.

Tony Martignetti
And they should know that they're part of the succession plan.

Allison Wyatt
For sure.

Tony Martignetti
Right? I mean, that's a way of retaining folks when they see an opportunity for growth. It may not— it may very well not be immediate, like it's not gonna be in the next year or two. If I see myself in 5 years as the successor CEO, that's encouraging to me. And then for folks down below, for folks down the chain as well.

Allison Wyatt
And that, yeah, that it trickles through the whole organization. And by the way, there's nothing more demotivating to a leader to have been cultivated by their CEO for 4 to 5 years. just not even really seriously be considered by the board.

Tony Martignetti
Ignored.

Allison Wyatt
Yeah, exactly. And so now you're losing 2 people instead of one, right? You're losing your 2 key people. So I do think that having— like, everybody's going to feel better about having been given that opportunity to be considered over the course of a period of time. And that doesn't mean you don't do a full search when a vacancy arises, right? We always encourage organizations to, you know, do a full search. It's actually, even if you end up going with your internal candidate, it, it's better for them too because they have more legitimacy stepping into that new role when there's been a process, right? But just make sure—

Tony Martignetti
Oh, that's an— oh, that's interesting. All right, so even if there is an internal plan, still do an external search.

Allison Wyatt
It, you know, it, it sounds counterintuitive, but it does validate the incoming leader. It also— every time, every sort of executive search process I've ever been a part of. The organization learns so much in the process about what it is they're really looking for. If you work with a good firm, they're going to engage the right people in that process so that everybody feels bought in when the leadership transition happens. Uh, so you don't have just like the board kind of behind closed doors, you know, dubbing somebody the new leader of the organization. There's been some staff engagement and involvement and things like So it really is best practice to, to make— to have there be a process anytime a transition like that is happening.

Tony Martignetti
Do you have another good story? I bet you do. A story of a successful, a successful succession plan, perhaps?

Allison Wyatt
Yeah. Yeah. So, you know, I would say this, there's where we've seen this go really, really well. Uh, was a, a client a couple, couple years ago had an internal candidate for the head of the organization, wasn't quite ready for it, had a really open, honest conversation with the board, and they ended up bringing an external leader who was about 5 years away from wanting to retire. And they put that leader in place to cultivate and groom the internal candidate. So that in 5 years, they would be prepared to step into the role if they were still interested and it made sense at the time. And that's exactly what happened. So that was a— that was an opportunity to have a high potential, less experienced leader who was hungry for advancement but wasn't quite there yet, you know, not get the job immediately and not been sort of put in a position where they were in over their skis, right? But still keep them engaged and actually invest in them, develop them, and groom them to have another planned transition where they would, where they would be ready. And it went really, really well. They had a— they've now been in that role for several years and it's been really successful.

Tony Martignetti
I just had a guest within the past couple of weeks talk about interim fractional.

Allison Wyatt
Yeah.

Tony Martignetti
And advisory roles.

Allison Wyatt
Yeah.

Tony Martignetti
Now it sounds like you're describing— you said That CEO was not interim because they came in for like 5 years or so to groom. So that's not interim.

Allison Wyatt
Long-term interim, should we say.

Tony Martignetti
Right. Long-term. Yeah. But you see value in interim or fractional?

Allison Wyatt
Yeah, absolutely. So I think interim is, you know, definitely works really well. And frankly, probably what the organization where the transition didn't go well, it's probably what they should have done was just do an interim. Um, you know, leader and then plan for a transition the following year instead of being caught behind the 8-ball twice in a row. Um, fractional is really underutilized, but it's fantastic. So a lot of times boards are hesitant to put an internal leader into the leadership role because there's some sort of gap. Maybe they've— they just don't have sort of like the financial chops of like running an organization. That's often the case in a nonprofit. You have Someone who's really strong with like people management leadership, the program side of things, but they don't have like the finance skills. Awesome. Hire them a fractional CFO for the first couple of years so that they really learn and understand and develop that skill set. And then, you know, you can roll that off over time. So fractional leadership is really a great opportunity to build a bench around your leader to set them up for success. Here's the dirty little secret. Okay, executive roles are multifaceted and highly complex. Whoever is in coming into a seat as a new leader needs a bench. The question is, do you know what that bench is, and have you assembled it? Right. So whether you're bringing somebody who's in who's coming in from the outside or someone who's coming from the inside, they're going to need support, and they're going to need to complement themselves with a team. It could be the board, it could be fractional, it could be staff that report into them. More often than not, it's going to be a combination of all of those things, right? At least with an internal leader, you kind of know what bench you're going to need to assemble to, you know, build out that portfolio to support the leader. Oftentimes with external candidates, you— it takes some time to learn that and figure it out. So I think that's one thing I think every organization to just normalize and think about is that it does take a village to effectively get an organization everything it needs at the leadership level.

Tony Martignetti
What else would you like to talk about, Allison? We still have time together that, uh, that we haven't, uh, something we haven't covered yet or something you want to go into more detail on?

Allison Wyatt
I think that, you know, that the thing I would say is that, um, everything that we're talking about here Is, is so doable and it, and it prevents so much pain, right? When, when it, when it's done well, it's, it's one of those things where I think a lot of organizations don't do it because it's almost like invisible work that you don't necessarily see the benefits of.

Tony Martignetti
Yeah.

Allison Wyatt
But if you don't do it well, you know, it's like, oh, there's all sorts of pain and suffering. It's interesting. It's interesting because so we have a fractional HR practice too. Uh, and we do a lot of work with organizations fractionally, and it's been a really interesting, um, exercise. We were just talking about like, how do we measure the success of that practice, right? Because it's almost like the less that happens, the less problems we've done, the better of a job we've done. But you, you really get more accolades for like handling crises and like navigating like really good. So it's like, it's, it's, it's, it's, that's, that's kind of, I think, what the board needs to be thinking about is is like, how do we do the right work today so that we're preventing crises in the future and we're making sure that we have these like really sustainable, best-in-class processes, right? And, and the dirty little secret is that there's always going to be things that seem like they're more urgent and important, right? Like hitting fundraising targets for the upcoming year, having a successful gala, right? Like these are all things that need to happen, and it's easy to just kind kick these cans down the road because they're not, you know, they're not bubbling up to the surface. But if you just, if you keep doing that, eventually they will, and you end up with really big problems on your hands. So,

Tony Martignetti
you're investing to prevent.

Allison Wyatt
Exactly.

Tony Martignetti
Just like you do with your physical plant. If you own your building, then you're keeping up your HVAC.

Allison Wyatt
Yeah, exactly.

Tony Martignetti
You're having it tuned up every 6 months and every however many years. The air pumps or whatever, the heat pumps need to be replaced, or the ductwork needs to be disinfected, and you're preventing problems. And

Allison Wyatt
yeah, and you're building the organization's capacity to do this for everyone. That's the other thing I would say is when we've worked with boards and done a really good job on their leader's succession plan, every time that leader has said, now I understand how to do this and I'm going to do it for my leadership team. And then those individuals in the organization understand how to do it, and they're going to do it for their direct reports. So this is one of those things that just has a really magnified impact across the organization. Uh, and, and I think that you, you start to, you start to build this muscle as an organization. One of the biggest challenges most nonprofits face is staff retention, development, and engagement. We do. I'm going to tell you, we do. We design compensation programs, performance management programs, and career pathways for nonprofits for their staff in addition to their leaders, right? Hundreds of organizations a year. We always start with discovery. Every time we go into an organization, it doesn't matter what they've hired us to do. Every time we go into an organization, we hear from staff that they don't feel like they're getting enough feedback. that they don't really know if they're doing a good job. They're not feeling fully recognized and appreciated, that there's lots of turnover and there's a lot of burnout as a result of it. So like, if we can do this well with the leader and we can start to trickle that down and do it better for staff, we can create such more stability in organizations and just make everybody's job easier. You know, just take away that friction. So I do think that this is actually something boards can do that not only prevent crises in the future, but actually build organizational muscle today that help create more vibrant, sustainable work communities.

Tony Martignetti
That's a perfect place to end.

Allison Wyatt
Yeah.

Tony Martignetti
It's beautiful. Allison Wyatt, founder and CEO of Edgility Talent Partners. You'll find them at agilitytalent.com. You can connect with Allison on LinkedIn, as I will do. I haven't yet. I don't think we're connected, but I will. I hope you'll accept my, uh, my connection invitation.

Allison Wyatt
Absolutely.

Tony Martignetti
Allison, this is excellent. Thank you. Valuable info. Thanks very much for sharing.

Allison Wyatt
Thanks so much, Tony. Good to talk to you.

Kate Martignetti
Next week, Gail Perry returns with her new book, Easy Fundraising and Friendmaking for Board Members. If you missed any part of this week's show—

Tony Martignetti
I beseech you, find it at tonymartignetti.com.

Kate Martignetti
Our creative producer is Claire Meyerhoff. I'm your associate producer, Kate Martignetti. The show's social media is by Susan Chavez. Marc Silverman is our web guy, and this music is by Scott Stein.

Tony Martignetti
Thank you for that affirmation, Scotty. Be with us next week for Nonprofit Radio, Big Nonprofit Ideas for the Other 95%. Go out and be great. Thank you.