Succession Planning Supports a Learning Culture

Succession planning is a necessity and a challenge for credit unions, just as it is for other companies. Deloitte Insight recently published a study that found 86% of leaders surveyed thought succession planning was urgent or important, but only 14% felt their companies did it well. Yet, doing it well can energize your culture and catalyze needed change.

Identifying new leaders, and preparing them to succeed existing ones, can be hard to get right. Many organizations have an undisciplined approach that’s primarily dependent on perceptions – not based on data and other objective information. The process is not transparent and employees are not informed. Often times there is a lack of accountability and managers view succession planning as a check-the-box exercise, and their efforts are ignored. Decisions may fall to a small leadership group that “knows the needs” of the credit union. They create plans based on likability or tenure, instead of thoughtfully- and skillfully-collected data. Moreover, the process can be anxiety producing and damaging to morale. Managers must face the fact they are not indispensable, and those climbing the ladder may sense the process is opaque, subjective and unfair.

Nonetheless, when done well, succession planning can actually enhance your culture. In a healthy culture, succession planning is a win-win process that uses quality information and is focused on talent development. Good hard data replaces general management impressions as the basis for identifying people in succession. Any data-gathering must be executed in a manner that provides an employee with context and comprehensive communication on the process. Written assessments should be supplemented with one-on-one meetings that focus on the person’s career plan and vision. A well-planned, data-based, effectively-communicated process advances transparency, and allows engagement and learning to supplant concern.

When employees ask the question “What’s in it for me?” they readily see career path possibilities based on personal development, learning and advancement. This is about more than creating pipelines of people to fill vacant slots. It is an opportunity to engage and promote leadership committed to the organization’s values and vision. This forms a fundamental basis for a learning culture that increases employee engagement, leading to better member service and financial results – the ultimate point of the process.

An employee’s potential, not just past accomplishments, should inform the planning activity. Talent development is about preparing the workforce of tomorrow and management must have a good sense of where the organization is headed to identify future talent needs. Identifying potential is crucial. The process is iterative and creative as the business landscape is constantly changing; leaders must prepare their people accordingly.

The commitment must start at the top. Senior leaders must advocate for it, assign clear responsibility and hold people accountable. Planning for senior leadership is essential, but this is not just about the C-suite. It’s about exploring advancement opportunity throughout the organization. In fact, the strength of the succession planning effort by your credit union is a good indicator of the strength of the C-suite.

A credit union’s board is not exempt from the process. Given the major responsibility of oversight, the board itself should commit to this best practice. Unfortunately, many directors feel defined by their position, and although they are volunteers, there are times when personal interest may supersede member interests. Planning for board and board committee leadership can catalyze needed board level change. As with succession planning for employees, assessment of individual directors and the board as a whole will yield insight into the skills currently residing on the board, and skills directors need to lead the organization into the future. Credit union oversight responsibility must involve understanding around technological platforms, new products and strategy involving diversity, including the importance of board composition that represents the membership’s diversity. A board assessment can indicate where strengthening of the board is needed, and lead to constructive measures. For one client, a board assessment, which included succession planning-related questions, catalyzed change at the board level. Certain members retired, making way for new members who increased the diversity of the board in both background and needed skills, and the number of directors was decreased. These were among the measures making the board more effective.

Identifying and developing the people who will guide the organization in the future is essential. What’s more, succession planning done well will support your culture, lift morale and increase engagement, giving your people more opportunity to thrive.

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.