MADISON, Wis.-A new Filene Research Institute study that concludes a credit union CEO's personality is even more important that ability or experience came as no surprise to two industry veterans.
CUES CEO Chuck Fagan said being a "good listener" is the top trait he would look for when hiring a chief executive.
"The executive team will offer different perspectives, and the CEO has to listen to those perspectives, because he or she will not have all the answers," he said. "The CEO might have been a CFO and therefore will have expertise in certain areas, but might not know about marketing, for example. The CEO has to be able to trust the executive team."
Dennis Dollar, principal partner with credit union consultancy Dollar Associates, Birmingham, Ala., and a former credit union CEO himself, told Credit Union Journal, "As a firm that does executive search work, there is no question personality is as important as ability and experience. A credit union hiring an executive ignores personality at its own caution. Personality is key in dealing with members, staff, boards and the community.
"It is a vital ingredient," added Dollar, also the former chairman of NCUA.
Practical Applications
According to CUES' Fagan, when hiring a CEO-or other C-suite-level positions-credit unions should consider using a recruiter, as tapping the expertise of people familiar with uncovering personality traits is an "absolute first step." He noted there are many personality tests available online to help determine if a person is a good fit for a CU's culture.
"A predictive index should not be the ultimate factor in hiring, but it can be a good indicator," he said.
Fagan also recommends a CEO candidate interview with a number of different people within the credit union. This would include group interviews with several members of the management team together, plus a series of one-on-one interviews, all to gather reviews on how well the candidate gets along with people.
"This does not apply just to the hiring of a CEO," Fagan asserted. "The executive team has to be cross-functional. The team is there to challenge each other and come up with alternative views, not just agree with the CEO, in order to come up with the best way the lead the organization."
If Fagan was the board chair of a credit union looking to hire a CEO, he said he would be looking for an "approachable" personality.
"I would want someone who is able to connect and build relationships," he explained. "I would not want a 'yes' person. I would want someone who can work with the board, can challenge and be challenged."
Better To Be Loved Or Feared?
Fagan said the Filene study is timely given a separate study spotlighted in the July/August 2013 issue of Harvard Business Review. The study, by Amy J.C. Cuddy, Matthew Kohut and John Neffinger, poses the question, is it better for someone to be loved or feared?
According to research by Cuddy, people judged to be competent but lacking in warmth often elicit envy in others, an emotion involving both respect and resentment that cuts both ways. "When we respect someone, we want to cooperate or affiliate ourselves with him or her, but resentment can make that person vulnerable to harsh reprisal," the study said.
According to Fagan, the most compelling takeaway from the Cuddy, et al study was personality is the most important aspect when a new executive first walks in the door, then strength, knowledge, skill and ability become more important after the CEO has connected with people.
"This makes sense based on the Filene study, as the findings of the two studies dovetail together," Fagan assessed. "It is important for a leader to connect. Years ago a credit union might have looked just for knowledge and competence. At CUES we try to tap into colleges and universities knowing there is a need for a leader to connect. The two studies confirm it is very important that the leader has the ability to build relationships."
