CUs not doing enough to plan for coming wave of CEO retirements: Expert
SEATTLE—Leadership turnover is a serious issue credit unions must address in their strategic planning.
That was the message from Deedee Myers, CEO of Phoenix-based consultancy DDJ Myers, speaking during the National Association of Federally-Insured Credit Unions’ annual conference here. She noted in the typical credit union top-level executives are responsible for 90 percent or more of the organization’s strategy. She said that is understandable, but it is not sustainable because some estimates predict as much as 52 percent of credit union CEOs will retire in the next six years, representing 60 percent of CUs with $750 million or more in assets. Of those, 59 percent of board chairs say they have “definitely not” identified a CEO successor.
“Thousands of baby boomers turn 65 every day,” Myers said. “Those people are seasoned leaders – who is going to take their place? Developing mid-level talent needs to be a strategic priority. Yes, the board needs to talk about technology and cybersecurity, but they also need to talk about people development.”
Myers said mid-level leaders who remain in “learning mode” ultimately develop stronger leadership skills. Credit unions, therefore, need to “challenge and stretch” their people with meaningful objectives, she said.
“Piecemeal training or one-day-wonder training will not accomplish these goals. Training needs to be exceptionally hard to help people become exceptional leaders.”
Leadership is more than a title, it is how the person is. A title does not give someone magic skills, any more than putting on bigger shoes makes someone run faster. Myers suggested empowering all employees by telling them, “You do not wait for the next idea, you are the next idea.”
“Develop mid-level leaders who can make a contribution, and don’t tell someone who has an idea that strategy is for executives,” she said.
The breakout session audience was asked a discussion question: What would be the impact of your middle-level talent increasing their ability to demonstrate personal initiative and act quickly to recover from adversity? One attendee said there needs to be an ongoing effort that is supported at every level, pointing out it is one thing for a CU to say “we empower our people” and another to make people feel empowered.
Discussion question No. 2 was: What is it about your culture that allows those in middle and lower levels to take unprecedented action? (actions that have never happened before)
An attendee noted his CU had 15 positions turn over in the last 36 months, which led to promotions at multiple levels, which in turn allowed new people to become leaders. “We pay close attention to those who are self-starters and show initiative,” he said. “For people to take unprecedented action, senior leaders need to let them know they are allowed to fail. Give employees a general framework to work from and then support them if the idea does not work out. Let the expectation be innovation, not perfection.”
Peter Myers, senior vice president at DDJ Myers, said great leaders aim to transform their team, the organization and themselves. “When people see a cause outside themselves, and realize they can make a difference, then they will stretch themselves,” he said.