Entering a New Era of Succession Planning

Credit unions plan for the future in numerous ways. They regularly review the competitive landscape, examine potential impacts from environmental and governmental activities, consider financial scenarios, develop new product and service plans, set strategic plans and evaluate organizational readiness.

But what about workforce planning? The NCUA recently required credit unions to establish succession plans to address future planning inadequacies resulting in credit union consolidations.

Too often, succession planning is excluded from other normal business planning processes. It’s easy to make succession planning a check-the-box exercise. But it should be more than just a requirement. It’s time for succession planning to become a natural part of other organizational, strategic and tactical business planning exercises. And credit unions have the opportunity to show all organizations how it should be done.

Research shows that most employees leave their organizations due to a lack of career growth. Likewise, employees cite a lack of promotions and career development opportunities as the second most likely reason they would leave their organizations, according to Quantum Workplace research.

Organizations in highly regulated industries, like credit unions, have an especially great need to keep talent from leaving because employee institutional knowledge is critical to growing and sustaining these organizations.

While business leaders agree that strategic planning is absolutely critical to preparing for the future, Deloitte reports that only 14% of leaders feel their organization does succession planning well.

Deloitte found several key reasons why companies don’t manage succession planning well, including:

• The length of time to see results is at odds with the general pace of business.
• Succession planning can seem threatening to top executives and potentially destabilizing for organizations that are unprepared.
• Lack of accountability keeps efforts from progressing.
• Too much subjectivity leads to a lack of trust for succession planning.
• Most business leaders don’t really know how to conduct succession planning, leading to the absence of clear processes.

It’s time to usher in a new era of succession planning, one that is an extension of a credit union’s talent management efforts, includes all leadership levels, is connected to employee engagement and unequivocally linked to strategic business priorities.

Hallmarks of the succession planning of the future include:

Agility and Proactivity

Traditionally, credit unions have largely conducted succession planning for compliance purposes. These efforts generally focus on rigid processes and steps that “check the box,” but never really help to identify and cultivate great leaders.

Credit unions that plan well for future leaders go deeper. They proactively plan for the careers and growth of the people by creating iterative leadership identification and development processes with ample time for collaboration, communication, review and modifications.

Inclusivity

Credit unions that are great at succession planning recognize that preparing for future leaders should really be part of the organization’s talent management strategy and include all potential future leaders, not just top executives. They make succession planning a continuous process that touches all levels of leadership within the organization.

Research shows that employees want to be developed and have expansion or advancement opportunities. Credit unions that consistently implement leadership development opportunities at all levels of the organization engage and retain employees more effectively.

Connection to Strategic Priorities

Succession planning needs to support and enable a credit union’s strategic priorities. The first step in effective succession planning is identifying the skills, experiences and intangible qualities required for an organization’s current and future leaders. Those that are excellent in succession planning ensure these leadership requirements map to overall strategies, goals and priorities of the business, such as innovation; diversity, equity and inclusion; customer retention and people focus.

Required Expectations for Senior Leadership

Peter Drucker, who is known as “the inventor of modern management,” said, “What gets measured gets managed.” Successful credit unions measure their most important initiatives to ensure they progress over time. Succession planning should be no different.

Credit unions that execute succession planning well tie efforts and results to the performance of senior leaders. Ultimately, the role of top management is to create growth and sustainability for a business. Securing sustainable leadership must be a top priority for a credit union’s executives.

Shared Vision

Just as credit unions endeavor to ensure all team members understand and can communicate their mission, vision, purpose and identity, they also need to create a shared vision for what exemplary performance and talent looks like. When succession planning is done well, top executives, managers and HR work together to define and share this vision throughout the organization.

A shared vision for succession planning helps it to become part of the organizational culture, alongside other people-focused initiatives, such as employee listening, coaching, mentoring and employee engagement.

A Culture That Encourages Stepping Outside Your Comfort Zone

Part of cultivating leadership is learning new skills and accepting new job experiences. Great succession planning builds an environment that encourages employees to tackle new challenges and stretch out of their comfort zones to build critical leadership skills and expand their knowledge.

Credit unions with an experimentation culture typically also have strong coaching systems characterized by open and transparent feedback that allows managers and employees themselves to identify and request new career opportunities.

Enabled by Data

Credit unions that collect, analyze and use relevant employee talent data help senior leaders, managers and coaches to implement more meaningful succession planning goals and plans for top future leaders.

The best credit unions focus on cataloging leadership roles, capturing tangible and intangible skills of team members, identifying potential gaps in leadership, analyzing talent interest and readiness, and integrating succession planning activities with performance management systems.

Credit unions can integrate succession planning into their overall business planning efforts with a little extra effort, and the results can have big impacts. Those that get succession planning right will find themselves leading the pack thanks to a bench of up-and-coming leaders always at the ready. These credit unions enjoy greater stability, more competitive advantages and improved financial performance.

Anne Maltese is the Director of People Insights at Quantum Workplace, an Omaha, Neb.-based provider of employee engagement and performance software.