“Additionally, we engaged an ex-credit union executive recruiter to educate the SACU executive committee about executive recruitment pros and cons. The executive committee then recommended to the whole board of directors to approve Steve Hennigan as the next president and CEO when I retire.”

The appointment means more than new names on some office doors. It represents a change in leadership style. In July 2009, a document titled “The Rationale for a New Leadership Approach” was distributed to the board then passed on to SACU management. The four-page presentation outlines a shift from a traditional patriarchal approach to what Hennigan dubs an adaptive style.

As openly stated in that document, Farver was brought in as CEO at a time when SACU was in great crisis. A strong decision maker was needed to bring SACU from insolvency to financial strength, and Farver had developed a reputation as a turnaround leader.

“Jeff is one of the best fighter pilots this credit union could have,” Hennigan said. “As the complexity of the outer world goes up, the number of gauges the CEO has to watch goes up exponentially. The era of stable conditions for flying is ending. So we have to adopt a whole new leadership approach.”

Farver added that, “In this world of complexity, I think a great many managers were looking for change. This is not the hobby of the day. This is a cultural change, and it takes time.”

The written rationale puts it this way: “We now live in a global economy characterized by rapid change, accelerating scientific and technological breakthroughs and an unprecedented level of competitiveness…. These developments ask for a greater capacity for innovation, self-management, personal responsibility and self-direction. This is not just required at the top; it is required at every level of our organization, from senior management to first-line supervisors and even to entry-level personnel.”

Farver believes the fairly long transition period is an advantage.

“In the fall of 2008, Steve as COO reengineered the processes we use to plan, prioritize and prepare out annual business plan and budget. A long transition period allows opportunities for the successor to implement new systems and processes that he will want to use when he becomes CEO,” Farver said.

“Another benefit is that I shifted my focus to the more mature business products of indirect lending and manufactured housing lending, while Steve put his energies into dealing with the more complex world of member direct products and services.”

Suppose someone had visited the credit union in 2009 when the rationale for change was presented, then returned to the credit union in 2012 or 2013. What transformations would the visitor see?

Hennigan suggested the overall effectiveness of the management function itself would be modified. If the management function is restyled, the rest of the organization will follow through.

“We're embarking on a new strategic direction,” Hennigan noted. “We're going to focus on a multichannel approach in the way we deliver products and services to our members. In the traditional model, the branch is the mainstay location our members would go to in order to transact business.”

“But with new technology it's no longer simply a branch transaction at a teller line. We've got to deliver seamless service across all channels, whether that be a face-to-face channel at a branch, voice-to-voice through a call center or self-service through ATMs or home banking. What I think you would see in 2013 would be a seamless and full experience for all members.”

Challenges? Actually, Farver indicated, when the plan was presented to the board, it was explained it could take 10 years for the results to be fully implemented throughout SACU.

It's also necessary to overcome the usual “but we've always done it that way” reaction.

If it sounds as though Farver and Hennigan have different management approaches, they indicate that while their styles may differ, they share certain core values and support each other. They're convinced they have structured a thoughtful transition.

“Imagine a rectangle with a line from one corner catty-corner to the other,” Farver said. “The space below the line designates my leadership role that declines as we approach year-end 2011. The space above the line reflects Steve's leadership role growing as we lead up to 2012. I am now telling the board and senior leaders that Steve defines the future for SACU, not me.”

Just as there was careful transition planning at the office, Farver has thought about his personal retirement agenda. Although it's not a done deal, he hopes a local university will develop a financial education module. He would teach the practicum and a Ph.D. would teach principles and theory.

For his part, Hennigan is looking forward to helping grow a new cadre of credit union managers. He's pleased that over the years he has been assigned a variety of jobs at SACU, giving him broad exposure to different functions. He sees a lot of credit union leaders retiring or nearing retirement, leaving a void. He believes it will be a real challenge to fill that gap, and it won't happen overnight.

But if that isn't accomplished, “our industry is in trouble.”