Ensuring that credit unions have the leadership and talent needed for future success is a critical responsibility of current CEOs and boards. As baby boomers approach retirement, the careful planning for the eventual replacement of top leadership has gained strategic importance. In this 2011 NAFCU Annual Conference session you learn how to develop a candidate profile based upon the current and future needs of your credit union, identify and assess internal candidates, ensure their continued commitment and outline a competitive compensation package. Presented by Loretta Dodgen, Ed D., Consultant and Managing Partner, Human Capital Solutions Group More info at http://www.nafcu.org/hcsgroup

1. Succession Planning:
The Internal Search
Presented by
Loretta P. Dodgen, Ed. D.
HCS Group
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2. Succession Planning
• The transition from one CEO to another is a
critical moment in the life of the credit union.
• Succession planning for the CEO role is a key
responsibility for Boards.
• A properly designed and executed succession
plan is critical for a successful transition.
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3. Succession Planning
• Research-The success of an organization is
determined by the effectiveness of the leader.
• Increased scrutiny requires Boards to ensure
that important decisions are based upon
detailed, complete, and objective information.
• Failure to plan is a strategic risk.
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4. Succession Planning
Additional Benefits
• Framework for senior leadership
development aligned with strategic needs
• Ongoing analysis of the position needs
• Clarification of key expectations
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5. "Would you tell me, please, which way I
ought to go from here?"
"That depends a good deal on where you
want to get to," said the Cat.
"I don’t much care where--" said Alice.
"Then it doesn’t matter which way you go," said
the Cat.
"--so long as I get SOMEWHERE," Alice added as an
explanation.
"Oh, you’re sure to do that," said the Cat, "if you only
walk long enough.“
(Alice's Adventures in Wonderland, Chapter 6)
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6. Succession Planning
Phase One: Planning for the Transition
• Outline the strategic direction for the credit
union over the next 5 to 10 years
• Identify the qualities, skills and experience
required for those leading the credit union in
order to attain the strategic vision
• Outline the Compensation Philosophy and
Policy
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7. Succession Planning
Phase One: Planning for the Transition
• Review the organizational structure to ensure
alignment with the strategic direction and
needs of the credit union
• Outline the Succession Process
• Roles and responsibilities
• Process for planned and unplanned exits
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8. Succession Planning
Best Succession Practices for Boards
• Board and CEO discussions on long-term
succession planning should begin 3 to 5 years
prior to the time a CEO transition is expected.
• The full board should be involved.
• Open and ongoing dialogue should occur
between the CEO and the Board on the topic of
succession planning, including a formal annual
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9. Succession Planning
Best Succession Practices for Boards
• Board members should be given ongoing
opportunities to interact with internal candidates
in various settings.
• The succession should be staged but horse races
should be avoided.
• Developing internal candidates is generally
preferable to external recruitment.
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10. Succession Planning
Best Succession Practices for Boards
• The outgoing CEO should exit immediately or
have a limited, clearly defined role.
• A comprehensive emergency CEO succession
plan should be in place at all times and reviewed
at least annually.
• Consider the political and emotional impact of
the transition.
Oliver Wyman, NACD Insert Your
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11. The Internal Search
Phase Two: The Search
• Conduct an internal and external scan
• Do you have qualified candidates within
the current staff?
• Is there a significant difference between
the internal talent and that available within
the external market?
• Is the credit union positioned to attract
external talent and retain internal talent?
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12. The Internal Search
Phase Two: The Search
• Outline a timeline that allows for a
comprehensive search and selection.
• Move as quickly as possible to minimize
disruption.
• Ensure that volunteers are able to commit to
the time.
• Determine if outside consultant will be used.
• Include triggers for external
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13. The Internal Search
Phase Two: The Search
• Clearly communicate the process and criteria.
• Will you post and accept applications from
interested internal candidates?
• Will you approach qualified candidates and
invite them to participate?
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14. The Internal Search
Phase Two: The Search
• Treat all candidates graciously and fairly.
• Be consistent.
• Include an objective evaluation component.
• Avoid courtesy interviews.
• Maintain confidentiality.
• Compensate a successful internal candidate
as you would expect to compensate a
successful external candidate.
• Plan ahead. Insert Your
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15. Succession Planning:
The Internal Search
Questions?
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