Promote leaders for the right reasons (and how to fix it when you don’t)

I love working in the credit union industry. I am convinced that some of the finest people in the world work in credit unions—people who genuinely care, want to help, solve problems, and create win-win outcomes for members every single day. They are mission-driven, service-oriented, and deeply invested in doing the right thing.

We often write about the importance of elevating the sales culture within credit unions—and the challenges that come with it. Building a strong sales culture in any industry is difficult, and helping team members consistently engage in meaningful sales conversations is not for the faint of heart. But the credit union industry is different. When team members are properly trained and supported, they don’t resist selling at all. In fact, they naturally gravitate toward it, because they understand that selling, done the credit union way, is not about pressure or persuasion. It is platinum-level service.

And it’s precisely because our people are so good, so committed, and so trusted that the decisions we make about who we place in leadership matter more than we sometimes realize.

No one intentionally promotes someone into leadership who isn’t ready or capable. Yet it happens more often than we would like to admit. The reason is not bad judgement—it's a misunderstanding of what actually makes a great leader.

In The Leadership Pipeline: How to Build the Leadership-Powered Company, authors Ram Charan, Stephen Drotter, and James Noel explain that many leaders—especially first-time leaders—struggle because they fail to make a critical transition. Leaders need to transition from getting work done personally to getting work done through others.

Too often, new leaders enter their roles without the necessary leadership skills, without a clear understanding of how to use their time properly, and without a solid grasp of the work values that leadership requires.

Why does this happen? There are several reasons, but one of the primary reasons is that many leaders are promoted for the wrong reasons.

In credit unions, leadership promotions are rarely made with bad intentions. In fact, they’re usually based on reasons that seem logical, fair, and responsible at the time. The problem is not why these decisions are made—it’s what those reasons unintentionally optimize for.

Below are the most common faulty reasons people are promoted into sales leadership roles.

You may be wondering, “Why are these reasons faulty?” The answer isn’t that these qualities are bad or undesirable. In fact, many of them are valuable traits we want in future leaders. The issue is that they don’t reliably predict leadership success.

When someone is promoted without being prepared for a fundamentally different job—one that requires new skills, a different use of time, and a new definition of success—we unintentionally set them up to struggle.

And when promotions are based on the wrong indicators of leadership readiness, the impact extends beyond the individual. Teams lose direction. Performance stalls. The organization never fully realizes the potential that promotion was meant to unlock.

When leaders are promoted for the wrong reasons—or promoted without proper development—the impact shows up quickly and consistently.

New leaders often fall back on what made them successful before. They do the work instead of coaching it. They solve problems instead of developing people. They avoid difficult conversations because those conversations were not required when they were individual contributors. Over time, they feel overwhelmed, frustrated, and pulled in too many directions. Eventually they settle into routines that feel comfortable but are far from effective.

Teams feel the effects just as clearly. Expectations become inconsistent. Strong performers feel unsupported. Average performers stay average. Underperformers continue to coast. Accountability becomes unclear or optional. No one gets what they truly need to succeed.

The result is predictable: performance plateaus, opportunities are missed, and growth slows—not because people lack capability, but because leadership was never fully developed to bring out their best.

The great news is that leaders who were promoted for the wrong reasons—and who are still missing the mark—can absolutely be developed. They can be retrained and equipped with the tools they need to lead. But it is going to take some work.

It starts with redefining what leadership actually is. Leaders must be trained on new skills, guided on how to use their time differently, and taught which outcomes to value most.

Leadership is not about doing the work. It’s about:

These are The Four Essential Elements of Leadership.

Leaders need to understand that their role isn’t to solve every problem—it's to inspire their team to create solutions. A leader’s job isn’t to put out fires, perform individual contributor tasks, or cling to familiar “busywork.” Leaders manage resources and people in the most effective and productive way possible.

Give your leaders permission to stop doing everything. Leaders need to be taught to delegate, challenge their team, and to inspire them to create solutions and take reasonable risks. Leaders need to know that it’s okay for their team members to make mistakes and not always have the right answers (a.k.a. the answer the leader thinks is right).

It should be no surprise that these are the same attributes we should be developing in up-and-coming leaders before promoting them. Great leaders love people, find the fulfillment in helping others succeed, and value long-term growth over short-term fixes.

Leaders need to be supported in their leadership roles the same way they are expected to support their teams. That means that middle management and senior leaders need to step up their leadership skills, time application, and work values as well. They need to make sure their leaders are being led with the Four Essential Elements of Leadership as well.

In fact, leaders who model leadership are, unsurprisingly, the best developers of future leaders.

When leaders are developed intentionally and promoted based on demonstrated leadership capacity, the impact extends far beyond the individual.

Teams gain clarity. Expectations become consistent. Coaching replaces pressure. Confidence grows. Employees understand what good performance looks like and feel supported in reaching it. Employees feel safe taking risks, suggesting solutions, and assuming responsibility.

At the organizational level, results become sustainable. Growth no longer depends on a few high performers. Sales culture strengthens without sacrificing service. Turnover declines. Leadership benches deepen. The credit union becomes more resilient.

And ultimately, no one benefits more than the members.

This is the real payoff—not just better numbers, but better leaders. Leaders who develop people serve members well and help the credit union fulfill its mission for the long term.

Credit unions often promote the wrong people into leadership, not because they choose bad employees. They do it because they confuse strong individual performance with leadership readiness.

We reward production, reliability, tenure, cultural fit, and initiative—assuming those traits will translate into effective leadership. Too often, they don’t.

The good news is this is fixable. Leadership is a learned discipline, and the gaps created by poor promotional decisions can be closed through intentional development. When credit unions redefine what leadership truly is, train leaders to coach rather than do, shift how leaders use their time, and redefine success, performance improves. Teams gain clarity. Confidence grows. Accountability becomes part of the culture instead of something leaders have to force.

Fixing a situation where a leader was promoted for faulty reasons and is underperforming doesn’t require replacing people—it requires investing in them. When credit unions commit to building leadership capability, they unlock the potential of the leaders they already have. That is how leadership mistakes are corrected, cultures are strengthened, and long-term growth is achieved.