Strategy Execution Requires Talent Planning

Getting your credit union’s strategic planning process right is one of the primary ongoing responsibilities of senior management and the board. Have you also considered, however, that getting your human capital planning right is also critical? Companies that connect their strategic planning and their talent planning do better. The strategic planning process guides your organization from where you are now to where you choose to be in the future, and your human capital plan makes that strategy a reality.

It is obvious that you need the right positions and the right people in them to execute strategy, but for far too many organizations, rigorous human capital planning is the exception, not the rule. What’s worse, too many companies do not think about the top value creation positions and where they are located within the organization.

Your credit union can use thoughtful analysis to discover value creation associated with the various roles. Just as you would identify your most important business opportunities and develop strategies to capitalize and allocate resources to them, you can quantify the functions and responsibilities within your credit union and allocate talent resources to capitalize upon them.

Keep in mind that it is easy to look at your organizational chart and think that the hierarchy in your chart is highly correlated to value creation. This is probably not the case. Essential value-driving roles usually do not match the levels on your organizational chart. There are critical roles filled by people at numerous levels. Sometimes many of the roles with the highest value creation are found at levels significantly below the C-Suite. These key positions don’t always get senior level attention and might be missed.

Don’t let your credit union have key individuals go unnoticed and unrewarded. Be proactive in your human capital planning, and don’t wait until key talent has found better compensation and recognition elsewhere. At times, key people feel they must use the threat of leaving to get an improved pay and recognition package, and great talent can usually generate another offer to make the threat real. Human capital planning makes the drama of countering the threat with a retention package unnecessary.

Extend your talent analysis to your credit union’s board. All too often board recruitment relies on word of mouth and friends of the current board. This is a formula for a uniformity in thinking that can lack the broader perspective that today’s world requires. Continuous technological, tax and regulatory changes in financial services require open-minded creative thinking to grasp business needs and opportunities in new ways. Board members have a duty to provide fellow board members with innovative ideas and new approaches. The right talent mix is needed on your board, just as it is with your entire organization.

Even if you think that every position in your credit union has an adequate job description, a fresh look at them will yield new insights. When was the last time a team of professionals considered current positions and thought about the goal that each position needed to accomplish in order to really create value? With that goal in mind, a clear identification of the responsibilities that the job requires should emerge. Then consider the skills of the person needed to fulfill those responsibilities. The person currently in the position may not be the right fit, so don’t rely on that employee’s qualities as your guide. Instead focus on the skills needed for the outcome you want the position to create.

Your strategic planning process requires quantification. Identify the starting point and progress toward the goal using measures of effectiveness. This same type of process should determine each position’s value to the organization. For the positions that do not yet exist but must be created for your strategy to succeed, these should get the same sort of analysis as existing positions.

Different positions create value in different ways, and quantification of the value should be done accordingly. Monetary measures related to contribution to revenue or cost savings from efficiencies could be used for positions that increase or maintain revenue generation, reduce operating costs or improve organizational efficiencies. Supporting roles are needed to allow the value creation by others to happen. Make sure they are not overlooked, especially as these are often viewed as just cost centers. Functions such as IT, cybersecurity, enterprise risk management and your HR positions are essential to the organization. You could employ more qualitative assessments for them like measures of effectiveness of ERM or of learning initiatives that move the organization forward.

Stuart R. Levine is Chairman and CEO for Stuart Levine & Associates and EduLeader LLC. He can be reached at 516-465-0800 or slevine@stuartlevine.com.