During our recent trip to the nation’s capital for the CUNA GAC, we held many discussions with credit union board members who wanted to bend our ear about their CEO’s imminent retirement. It’s not surprising, since we have been hearing the statistics for many years that half of the industry CEOs will be retiring within the next 5 years.

As the reality of this statistic unfolds, how does a credit union ensure that the change is managed to reduce internal disruption? How do credit unions stay on their strategic path, continue to provide high levels of service to their members and keep employees engaged during a CEO transition? The answer lies beyond the dust covered succession plan on the bookcase in the board room.

In a December 2016 article published in the Harvard Business Review, authors Victoria Luby and Jane Stevenson outline seven tenets of a successful CEO succession process. This process is several years in duration so every step may not be possible if a credit union is facing a pending retirement or an unplanned change. However, many of the tenets still apply to an imminent CEO replacement.

Develop a CEO Success Profile – This is a document that outlines the board’s vision for the successful CEO’s competencies, experience and personal traits. It is designed to reflect the organization’s business strategy, as well as its short- and long-term priorities.

Assess Candidates – Use the CEO Success Profile and industry benchmarks to evaluate candidates. For example, if a long-term strategy for your credit union is to be the lender of choice for your community, loan ratios from the candidate’s current institution can tell an important story.

Think Like a Chess Master – Plan 2 or 3 moves ahead. Think about how the choices you make for the new CEO will impact the rest of the organization one or two levels deep. If you promote an internal candidate how will his or her current role be filled – if it’s from within, how will that role be filled? If you hire externally what impact will that have on internal candidates who were not selected? Could that cause undesired turnover? If the goal is to minimize disruption, this must be expertly planned.

Prepare Future Leaders – Cross train your high-potential employees so they are ready to step into leadership roles as they become available. Identify skill gaps and strategically plan to fill those gaps through on-the-job training, formal education, online education, mentoring, etc.

Get to Know the Team – Leaders need to be sure that they are intentionally interacting with staff at all levels within the organization and learning about their career aspirations. Crafting and implementing development plans that grow skills and create experience.

Keep the Dialogue Alive – Succession Planning needs to be a regular topic of conversation at the board table and within the management team. It’s not a one-time event or even an annual review. The board should be kept apprised on a systematic basis of development plans so it can be sure that the organization’s future leadership needs will be met.

Think Long Term – Organizational development needs to be linked to the credit union’s longer term business strategy. As strategy evolves, the competencies of future leaders will change and development plans need to be modified so the skills of our leaders will meet these future needs.

Having a strong and vibrant credit union for your members in the future starts today with implementing a robust strategic succession process.

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