Credit Union CEO Succession Best Practices – Hiring a good search firm tops the list

by: Fred Johnson, President/CEO, CUES

When I returned from Vietnam, I was a company commander. A formal ceremony in front of the company was held when I passed the command to my successor. When I realized I had left my field jacket at the ceremony site, the battalion commander told me not to go back—it would confuse people to see the old leader when the new leader had just taken over.

Changing leadership in the military generally is far more formal than the process used in business; however, realizing that the process is important and has an impact on many people is key to success. As I work with my board and staff in preparation for my retirement from CUES at the end of this year, I’m glad we can implement succession planning best practices learned not only in my military experience, but also in my 23 years as the leader of an association dedicated to the development of credit union leaders.

I’m confident your CU’s next CEO succession will run more smoothly if you:

• Hire a knowledgeable search firm. They ask things that most boards wouldn’t know to ask. CUES is using JMFA, our partner in CUES Executive Search.
• Make sure you have a good description of what the CEO job at your organization really entails. For example, my job involves 150 days of travel a year. That’s a crucial detail to make sure candidates know as they apply. Make sure you define, up front, the expectations your CU’s board will have of the new CEO.
• Develop a succession timeline. Do some reverse planning. Start with the day the new CEO needs to be in the corner office. Then work backward. How much overlap time would you like with the new CEO? How much time will your search firm need? Write it all down so you can track your efforts and adjust if things aren’t going as planned. Do a budget for your process as well.
• Have formal criteria and a process for your board to use in deciding who to hire. Unless boards have a process, they will fall into the human tendency to hire people they like or feel good about, rather than people who have just the right skill set or leadership style for the job. At CUES we use the predictive index to help hire staff who will work well for a particular job, and I’ve recommended using the program in the search for my replacement.
• Remember that culture eats strategy for breakfast. Make sure candidates understand the culture of your credit union. If the culture at your credit union needs to shift, they should be aware of that up front.
• Leverage technology to check candidates’ claims. Online tools can help confirm the information on candidates’ resumes.
• Make a decision about how much overlap to have with the two leaders, if any. As I said earlier, the army advocated no overlap. But your board will have to decide what is right for your credit union. CUES is looking to have a couple of months of overlap—a little, but not too much.
• Set up some expectations and goals for the first part of the new CEO’s career. Even if the new CEO was the No. 2 executive for a long time, becoming CEO is a lot more change than just moving offices. Make sure your board offers some guidance for what’s expected in the first six weeks, six months and year.
• Go carefully when talking to staff. While it’s important—if possible—not to surprise staff with a CEO’s departure, be aware that talking about change—especially change that’s still a long time off—can be pretty scary. So tread carefully and listen to the feedback you get.

Fred Johnson is president/CEO of CUES, a Madison, Wisconsin-based, independent, not-for-profit, international membership association for credit union executives. CUES’ mission is to educate and develop credit union CEOs, directors and future leaders. www.cues.org