Why Everyone Needs SPAM
SPAM is your friend-at least it is when it refers to Succession Planning and Management, as opposed to unwanted e-mail cluttering your inbox or tinned meat.
This kind of SPAM is one every credit union should want and have, according to Janie Warner, VP-human resources of Arkansas FCU.
Succession planning is absolutely critical for credit unions, Warner said, but many CUs are loathe to address it because of the potential for egos and hurt feelings to get in the way.
"We need to get over that, because this stuff is important," Warner told attendees of the Texas CU League's annual meeting.
Among the reasons credit unions need to get on the SPAM stick:
* The continued survival of the CU depends on having the right people in the right places at the right times;
* As a result of recent economic restructuring efforts in organizations, there are simply fewer people available to advance to the top ranks from within;
* Succession planning and management is needed to encourage diversity and multiculturalism in organizations and to avoid "homosocial reproduction" by managers;
* Succession forms the basis for communication of career paths, establishing development and training plans, establishing career paths and creating a more comprehensive human resources planning system.
Warner evoked the famous business consultant Peter Drucker to make the point, quoting the business guru as saying: "The question of tomorrow's management is, above all, a concern of our society. We have reached a point where we simply will not be able to tolerate as a country, as a society, as a government, the danger that any of our major companies will decline or collapse because it has not made adequate provisions for management succession."
A credit union's members, she suggested, could say the same thing, noting that credit unions have been known to go under when there is no succession plan in place to replace a veteran CEO.
The first step towards creating an effective succession plan is understanding what such a thing really is, Warner advised, offering this definition: any effort to ensure the continued effective performance of an organization, division, department or work group by making provision for development, replacement and strategic application of key people over time.
At the outset, credit unions must identify critical management positions, starting at the levels of project manager and supervisor and extending up to the highest position in the organization. This provides increased opportunities for "high potential workers."
The next step is to identify "replacement needs" as a means of targeting necessary training, employee education and employee development. "Look at what you spent on training last year," Warner advised, adding, "This makes us more well-rounded. Think about it. Aren't you a better marketer if you understand lending? Aren't you a better board member if you understand marketing?"
SPAM can also increase the talent pool of promotable employees. This helps a credit union hedge against loss of a key person due to failure of what well-known CU consultant Tom Glatt refers to as the "bus test." "That's when your CEO steps out in front of a bus," she explained. "What happens to the credit union then?"
The process also contributes to implementing the organization' strategic business plans. Going through the SPAM process helps the board and management team consider where the CU wants to be in 10 years and what needs to happen to get there.
Warner offered this seven-step model for implementing SPAM:
1) Make the commitment to systematic SPAM and establish a SPAM program. "Identify someone who could step up to the plate," Warner commented. "Don't make it a guarantee. You're just establishing that 'we're looking at you, we're assessing your skills.'"
2) Assess present work requirements. "Look at your current CEO. What makes the current CEO good at the job," Warner recommended. "Is it his people skills, the MBA, writing and communication skills? Determine which of these skills are musts."
3) Appraise individual job performance. "If they don't do a good job in their current job, why would you think promoting them is a good idea," Warner asked.
4) Assess future work requirements. "What will the manager of the future need to be successful? Don't hire someone for today's needs, Think about where you're going and hire someone who can take you there," Warner urged.
5) Assess individual potential. "Look at their strengths and weaknesses," she advised. "Do they have developmental needs to be the person you need when the time comes?"
6) Close the developmental gap. "Do whatever it takes to get your candidates to the level you need them to be in order to be successful," Warner offered.
7) Evaluate the SPAM program. Like most programs, SPAM requires periodic review to ensure it's still on the right track.
If SPAM is so important, why do so many credit unions avoid it like the plague? There are a variety of common roadblocks, Warner suggested. Ego is a biggie, particularly in cases where the existing person simply can't or won't let go.
"Succession planning can really step on the egos of CEOs," she said. "They start thinking 'they're already looking to replace me,' or 'no one will ever be as good as me.'"
Boards can also be to blame. "Some take a laissez-faire approach," she added. "They think, 'we'll deal with it later.'"
Another common problem: when there's someone who believes she's the "heir apparent" and assumes the job is hers as soon as her boss retires, dies or leaves. This one is often paired with unreasonable expectations or promises.
But regardless of these roadblocks that can cause much pain and discomfort, SPAM is necessary because, in the end, Warner reminded, "the show must go on."