“Providing Strategies for Success”
Finding the Heirs Apparent:
“Leadership Succession Planning
for Ensuring Your CUs Future”
Utah Credit Union Association
Volunteers Conference
October 22nd, 2011
Presented By: John A. Vardallas CAE,CUDE
Founder/CEO TheAmericanBoomeR Group
Madison, Wisconsin USA
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Welcome Utah Credit Union
Leaders…
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My First Car…….
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My Team…….
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My Credit Unions…
• UW Credit Union
($1.3 Billion)
•
Summit
Credit Union
($1.6 Billion)
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Today We Will Be Discussing:
How To
Replace AND TANSITION
ceo/BOARD leadership!
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Poll Question?
What Would You Do If Your
CEO/Chairman Was Hit By A
Bus While You Were part of
this program?
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Why Succession Planning?
-- 30% of Credit Union CEO’s will be stepping
down by 2014— AND
40% of Credit Unions have no FORMAL
SUCCESSION PLAN (CU TRADES)
-- The NCUA’ s Letter to Credit Unions 161
identifies succession planning as one of seven
internal controls deserving special attention.
“The existence of a detailed succession plan that
provides trained mgmt personnel to step in at a
moment’s notice is essential to the long-term
stability of a credit union”.
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Why Succession Planning? (cont)
-- Shrinking pool of talented leadership
available due to widespread business
retirements nationally
-- Downsizing of middle mgmt and flattening
of organizations the past decade have
created a shortage of executive talent
-- 66% of senior managers hired from
outside usually fail within the first 18
months—Center for Creative Leadership
(The Succession Planning Process Helps
Cultivate New Leadership!)
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Where Do CU CEOs Come
From?
• 33% are promoted internally
• 33% are recruited from other CUs
• 34% from other outside
organizations
CUNA Salary Survey
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Factors That Are Making the CEO
Job Tougher…
-- Pace of Technological Developments
-- Rapid Change Makes Long Range
Planning Difficult
-- Global Competitive Marketplace
-- Overwhelming Information Provided
Through the Internet
-- Leading and Managing the Needs of A
Diverse Workforce
-- Meeting the Expectations of
Shareholders/Members
-- Can You say “Regulation”?
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New Leadership Competencies
Future Executives will need to
possess a more sophisticated set of
skills mix including global business
acumen, technological
literacy,multicultural fluency, inspire
versus motivate people and the
ability to manage change and
non-hierarchical organizations.
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Why Plan For Succession?
Board/Mgmt have an obligation to the
members to continue the credit
union for future generations
The Succession Planning Process
should cultivate
“Predictability versus Chaos”
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Benefits to the Credit UnionA Succession Plan Can…
A.
Reduce Costs - Loss of Business/Pay for
Desperation/Utilize cu training investments/Fill
vacancies
B. Reduce Anxiety/Fear- By Stakeholders Internal
(staff/board) External
(members/vendors/regulators)
C. Prepare for CEO Retirement Situations
-- Prevent Lawsuits/Create Transparent
Transitions/Groom New Leadership
D. Prepare for Crises Situations
-- Unexpected Loss of CEO
(Death/Termination/Departure for Better
Opportunity)
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“Boards” Responsibility…
As the Watchtower for the Credit
Union Guide by Communicating
during challenging situations:
What are you going to do if the CEO or
Board Member suddenly terminates
employment or position?
Do you have a written plan? What does
your bylaws state?
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“CEO’s” Responsibility…
As the Pilot for the Credit Union: Steer
by Knowledge & Experience
-- Update Job Descriptions
-- Identify Career Paths for staff
-- Develop Leadership potential (mentor/job
rotation/growth opportunities/
professional development)
-- Monitor Internal & External Equity
(Compensation packages/HR Trends/Job
Market)
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Components of A Succession
Plan
1) Materials (job descriptions, org chart,
marketing/part of strategic plan)
2) Resources (budget/personnel/search
firms/executive recruitment)
3) Time Frame (60-180 day plan, benchmark
timetable and dates)
4) Clear Objectives/Strategies (Fill vacancy
of CEO/Ensure transparent transition
possible/Ensure Board selects a “value
added” candidate to the credit union)
5) Updated and Refine Periodically
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6 New CEO Succession Plan
Approach Steps
1. Forecast Business & Leadership Needs
2. Generate a List of Competencies
3. Assess Internal Talent & Identify Gaps
4. Provide Development Opportunities
5. Hold People Accountable for Their Own
Development
6. Make Succession Planning an Integral Part of
Annual Business Planning
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Tips For Boards in Designing A
CEO Succession Plan
-- Take Stock How is the cu doing? What are its
strengths/weaknesses?
Should you be looking for candidates to keep the
cu on coarse or to change directions?
-- Draft a list of possible successors to the CEO
-- Appoint a committee to oversee the succession
-- Motivate the CEO to create a succession strategy
-- Increase the CUs Bench Strength
-- Expose emerging staff leaders to the board
-- Plan for retention of high performing staff(this
may prevent executive poaching)
-- Limit the Succession Time frame (Waiting too
long leaves cu vulnerable to missed opportunities
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Succession Leadership for Small
Credit Unions…
Strategies to consider:
-- Partnering or Twinning with a Larger
credit union
-- Utilizing outside Management Firms
or Retired CEOs
-- A Merger (after a CEO retires)
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Poll Question?
Identify the possible Barriers you see
for an effective Leadership
Succession in your credit union?
----
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Steps To A Successful Board
Succession Plan
1. Develop A Desired Director Qualifications
Profile
2. Develop Director Roles and Expectations
(Job Descriptions)
3. Develop Strategic Recruitment and Exit Plans
(Associate Director/Director Emeritus Program)
4. Establish a Candidate Assessment Process
(Application/Interviews)
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Succession of Directors Checklist…
Concerns/Challenges
-- Lack of Interest/Getting Candidates/Loss
of pool of people due to changing FOM
-- Aging of Boards/Retention of Directors
Who have lost their effectiveness
-- Increased time/development
commitments/expanded responsibilities
-- Liability exposure/Increased regulation
-- More Scrutiny due to concerns over
Ethical Practices
-- Term Limits
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Succession of Directors Checklist
(cont)
Possible Solutions
-- Develop effective director recruiting
program (use directors to recruit, job
descriptions, make a difference, rotate
board members/committee chairs)
-- Increased Liability/Indemnification
clauses/Legal opinions for Dir support
-- Creating Director
Emeritus/Mentoring/Associate director
programs utilizing committee members
-- Ongoing Director Education/Training
-- Regular Reward/Recognition Programs
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Creating A “Balanced Board”…
• Research Your Needs
• Review the Current Profile of Your Board
– Does it reflect your current field of membership?
• What does the Board need to better represent
the current / future membership?
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Determine Your Talent Needs…
• What kind of person does the Board need
to better understand the future direction/
products/services and financial situation
of your CU to help meet the needs of your
members?
• Develop Attributes/Skills profile of new
board member (Community Rep/Human
Resources/Finance/Marketing/Etc)
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Where Do We Find the Next
Generation of CU Directors?
• Task Current Board Members to
Profile/Recruit a new board member
• Utilize CU Web site as a recruiting tool
• Look at Your SEG Groups for persons
interested in Serving
• Appoint to Specific Task
Groups/Committees
• Look for Boomer Age Group Members
• Keep assignments short termed
(Episodic Volunteering)
Key: Focus on Diversity versus Tokenism
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Tips to Remember When Recruiting
Volunteers…
• Give the volunteer the “Big Picture” and a
Compelling Message to Join
• Clearly Define the Task (Job Description)
• Describe the Expectations/Time required
• Assure support and assistance
• Be Prepared to respond to stated/hidden
objections (legal/time/fitting in)
• Convey excitement/fun/the opportunity to
help Make a Difference
• List out Education/Training Opportunities
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(Focus on the CU Philosophy)
Creative Group Exercise
CREATE YOUR IDEAL
CEO
&
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And Finally…..
The Keys to Effective Succession Planning
and Ensuring Your Credit Unions Future
-- Make it part of your credit unions overall Strategic
and Business Planning Process
-- Your Top talent Must Embrace & Plan for Change
-- Choose Your Staff/Board Leaders for the Future
Not the Past
-- Think of Your succession plan as your credit
unions “Leadership Will”
-- You as today’s CU Leader are preparing the CU
for Tomorrows Members…
What Legacy Will You Leave?
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Open Forum Time…
• Final
Thoughts,
Questions,
Discussion Items
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Thank You For Your Attention and
Input.
I wish you Personal and Professional
Success! …JAV
Please feel free to contact me
if I can be of service to you.
7x24x365 Direct Cell: (608) 577-8707
JVARDALLAS@AOL.COM
www.theamericanboomer.com
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About John A. Vardallas CAE,CUDE
“Providing Strategies for Success”
John A. Vardallas is an International Credit Union Business
Consultant and Founder/CEO of TheAmericanBoomeR
Group, a Madison Wisconsin based Speaking and
Consulting Business. His work focuses on helping credit
union leaders and organizations increase productivity and
profitability.He conducts High Performance Leadership &
Management Development, World Class Service, Change
and Growth programs for staff and directors. He also
facilitates Strategic Planning sessions for a variety of credit
unions throughout the USA each year.
For a free E-Catalogue of Programs & Services you may
contact John/ Office (608) 221-4621 Cell (608) 577-8707/
e-mail jvardallas@aol.com/ www.theamericanboomer.com
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