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Beyond the Boomer CEOs: Prepare Your CU
imes, they are a-
most readers of
this publication won’t get that
reference to the great Bob Dylan
Fully half of baby boomerswill turn 65 in the next 10 yearsand like the definition of classic rock, it will impact the creditunion community tremendouslyin terms of retirements and theirreplacements.
The coronavirus pandemicis highly likely to accelerate theprocess. Consider the stress on acooperative financial institutionand its leadership when dealing with the relatively suddeneconomic crisis. In addition,the need for digital transformation has only become a greaterimperative for continued member service. And on the flip sideof that is the transformation ofthe traditional retail businessmodel. Regulatory pressures aremounting. That means alterations to management style andbusiness model, quick and consistent learning curves, and justchange.
Half of CEOs plan to transition– whether retire or change positions – in the next six years. Andit’s not just CEOs, but the entireC-suite that will be affected. Ifyour credit union is not preparedwith a succession plan, the transition will not go smoothly and itcan take years, literally, for thecredit union to recover. No credit union can afford that.
We must become more agile and tech-focused right now.That will require a very differentskill set than when most creditunion boards hired their lastCEO, possibly decades prior.
Fintechs havealso invaded credit unions’ battleground in the warfor talent. Theirproducts are innovative and exciting, which can bevery attractive for ayoung executive andtheir pockets may bedeeper, too. Ensuring your credit unionhas a competitivecompensation andbenefits plan – not just competitive for the credit union market,but for others who are trying torecruit the same talented executives – is critical.
Understanding the need forthe type of leader your creditunion will require is crucial andnecessitates a clear understanding of the current strategy, aswell as what the credit unionmay look like five to 10 years out.If your credit union is $100 million in assets right now and it’sexpected to reach $400 millionin assets in the next 10 years,that alone will require a differentorganizational structure, diversification of products and services, and potentially charter orfield-of-membership changes.Each of these pieces fall together to complete a framework foryour next CEO candidate.
Include your credit union’scurrent CEO in these discussions, too. They are experts infinancial services, in your market and particularly internallyregarding your credit union.
Despite the stiff competition
in the talent pool and a broad
understanding of what’s in store
for the future of financial institu-
tions, only 68% of credit unions
have succession plans in place.
To maintain a thriving credit
union, ensure your board is pre-
paring for the future by:
1.Encouraging open dialoguewith the current CEO to keepthe board’s finger on the pulseof his or her intentions.
2. Running fire drill scenarios.
3.Considering internal teammembers and preppingthose who would make goodcandidates.
4. Studying your competition foryounger executive and potential merger opportunities.
5. Networking at conferences forcredit unions, banks, fintechsand others that will put you incontact with people who mightbe of interest. Some CEOs whoarrive in credit unions fromthe for-profit world are themost appreciative of the creditunion environment.
6. Interviewing recruiting firmsthat have vast networks andexpertise in and outside thecredit union market.
7. Keeping on top of executivecompensation trends and howthey can map to your creditunion’s long-term performance goals.
Supplemental Executive Re-
tirement Plans are important for
not just recruiting but retaining
high-quality leadership. Ensur-
ing it aligns to the board’s vi-
sion for the credit union can be
complicated, so it’s a good idea
to retain outside experts. Many
credit unions have long-time
CEOs, and executive compen-
sation plans have changed tre-
mendously since the last time
the board may have studied the
In fact, we recommend creditunions treat their successionplanning almost like strategic planning; it should be performed annually to stay on top ofthe issues of the day and your internal candidates’ progress. Arethey filling skill gaps with education and training? How are theyleading their current area of responsibility? How do they manage the politics of the organization? Review their strengths andweaknesses with brutal honesty.It’s a multi-year process to develop a real understanding of aninternal candidate’s potential.Rigor matters.
Finding your credit union’snext CEO is the biggest decisionthe board can make, and thesuccession plan must be carefully put in motion as early inadvance as possible to ensurea smooth transition that keepsthe credit union moving forward. And within that processthere are 100 other importantdecisions to make, from capabilities of the candidates to howthey’ll be compensated. Prepareso your credit union doesn’t letyour top talent go – like a rollingstone. n
Kirk Kordeleski (left) and Tim Strandquist
Executive Benefit Consultants
OM Financial Group
The Fatal Flaw inSalary Surveys
Salary surveys should bebased on value, not a CU’sasset size, North Bay CUCEO Chris Call argues.
Seniors DemandDigital Banking
CUs have an opportunity toadopt tech and educationaltools geared toward oldermembers, Lightico’s ZvikiBen Ishay says.
Keeping YourPassword Off the Wallof Shame
Vizo Financial CorporateCU’s Mike Bechtel sharessix steps to creating strongpasswords.
Fighting ID Theft andFraud
Vero’s James McCabediscusses how CUscan help members stayon guard and defendthemselves.