The Key for Ensuring Your Credit Unions Future
Strategic succession planning is a proactive, future based practice that all credit union leadership should engage in to ensure the future of your credit union. With the wave of current and near future CEO retirements that are expected in the next five years, credit union senior leaders and Boards should be prepared to avoid the “leadership gap”.
A good number of boomer age CEOs will be leaving the workforce and credit unions can find themselves in a reactive situation if a proper succession planning process has not been adopted into place.
Many credit unions are responding to the departure of a CEO by looking outside the organization for a new leader. But they soon may be looking again according to studies by the Center for Creative Leadership that found 66% of those hired from the outside usually fail within their first 18 months. Why, because they don’t know the culture or business philosophy and are the wrong personality profile.
Succession planning should help credit unions cultivate new credit union leadership. We need to grow our own leaders by developing our own people!
It starts with a “Talent Development” culture and an investment in training.
Credit Union Board and management have an obligation to the members to continue the credit union for future generations. Your succession plan should cultivate predictability versus chaos in reducing the anxiety and fear in preparing for retirement as well as unexpected departures of leadership.
Credit Unions should consider a Six Step Approach to Succession Planning:
- Forecast business & leadership needs.
- Generate a list of desired leadership competencies/attributes.
- Assess Internal Talent and identify gaps.
- Provide Training & Development opportunities.
- Hold people accountable for their own career development
- Review Governance Policy annually for Emergency Succession Planning.
Credit Union CEOs should always be developing leadership by mentoring and coaching potential leaders. Encouraging and allowing for job rotations, fostering professional development and exposing people to growth opportunities. Monitoring internal and external equity by staying competitive with compensation packages and being aware of the job market might keep good talent from bolting for minimal monetary gains and prevent executive poaching.
Tips for Boards for designing a succession plan include:
- Take stock. How is the credit union performing? What are its strengths/weaknesses? Is it going in the right direction? Should you be looking for a candidate to keep the credit union on course or change direction?
- Draft a list of possible successors to the CEO both internally and externally.
- Appoint a committee to oversee the succession process.
- Increase the credit unions bench strength via development of senior staff and exposure to the Board.
- Determine talents/traits/right culture fit needed for your new CEO.
- Conduct thorough background checks.
- If looking outside of the credit union for future leaders utilize
Executive Search firms.
- Create a timeline and limit the succession time frame—waiting too long leaves the credit union vulnerable to missed opportunities in the financial services marketplace.
The keys to effective credit union succession planning and ensuring your credit unions future lie in making it part of your credit unions overall strategic business planning process. Your top leadership must embrace and plan for change. Choose your leaders for the Future–not the past. Today s credit union leaders should be preparing the credit union for tomorrow s members.
Think of your succession plan as your Credit Unions “Leadership Will”— What legacy will you leave?