Strategic Succession Planning
 

Strategic Succession Planning

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Succession planning is the right people at the right time doing the right work. In this podcast and presentation from the 2013 NAFCU Annual Conference, Deedee and Peter discuss how you can develop a ...

Succession planning is the right people at the right time doing the right work. In this podcast and presentation from the 2013 NAFCU Annual Conference, Deedee and Peter discuss how you can develop a strategic organization successional plan to ensure the successful transition of key leadership for your credit union. This session covers an overview and best practices, levels and types planning, board evaluation, behind the scenes conversions, and the integration of board succession planning with CEO succession planning.

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Strategic Succession Planning Strategic Succession Planning Document Transcript

  • Strategic Succession Planning Presented by Deedee Myers, CEO DDJ Myers, Ltd. July 12, 2013 Boston, MA Conversation Today • • • • • Overview and Best Practices Levels and Types Board Evaluation Needed Conversations Integration of Board Succession Planning with CEO Succession Planning Insert Your Logo Here 1
  • Public Conversations: Succession Planning in the News Article in USA Today: Fewer babies are being born and fertility rates are lower – trends that cause concern as 78 million Boomers age. Insert Your Logo Here Succession Planning The right people are ready at the right time to do the right work. Insert Your Logo Here 2
  • Even the NFL Needs a Succession Plan Insert Your Logo Here Conversations Happening • • • • • • In Board Room Outside of the Board Room Staff Members Examiners Strategic Partners 3
  • Succession Policy The Succession Policy of this credit union is to intentionally seek and develop people to meet the needs of the board and CEO now and in the future. Three Investment Levels 1 Regulator Satisfier 2 Strategic Succession Planning 3 Core Leadership Development 4
  • What are We Trying to Achieve? • A more strategic process for Succession Planning beyond an emergency plan. • An increase in strategic thinking about leadership continuity within the board room and C-Suite. What Does the Industry Need? • A shift towards strategic leadership continuity. • Knowledge making organization. • A conscientious shift from the hunker down and bunker mentality created during the first years of the financial crises. 5
  • Strategic Context 701.4 (a) “…. The management of the Federal credit union is vested in it board of directors. While a Federal credit union board of directors delegated the execution operational functions to Federal credit union personnel, the ultimate responsibility is non-delegable.” Needed Conversations • Philosophy – Discuss different philosophies – Decide on a philosophy – Take appropriate action – Remember: No action is action 6
  • Board Evaluation Why do it? •Considered “best practice” •Creates opportunities •Moves the board toward co-commitment •Encourages learning •Improves focus •Supports future board recruitment and development Board Evaluation Why do it? • Other parts of the organization are evaluated for continuous learning. • Board requires organization evaluated • Board conducts CEO evaluated • Employees are evaluated So, why not the board? 7
  • Board Evaluation Why do it? • Boards that do a board evaluation govern organizations that consistently outperform other organizations. • Direct correlation between board evaluation and effective response to the evaluation and high performing organizations. Board Evaluation How to do it? 1. Decide reason and relevance. 2. Design questions related to the reason and relevance. 3. Conduct with confidentiality. 4. Pool answers. 5. Create board dashboard of effectiveness and collective competencies. 8
  • Board Evaluation What to do with evaluation responses? -Facilitated conversation on Board Dashboard -Generative Conversation Director Evaluation Conduct a self-assessment Receive a 360 assessment Confidential Receives relevant feedback in context Address gaps in self-assessment and 360 Development plan Receives support 9
  • Orientation and Development Policy/Plan 88% of CEOs were not confident or were uncertain about the effectiveness of board evaluation processes. Alden (2004) reported that credit union boards “go through the motions of self-assessment but don’t know what to do with the results.” Seven Generations of Succession Planning 1. Board of Directors 2. CEO Disaster Replacement 3. CEO Strategic Succession 4. Executive Roles 5. Middle Managers 6. Internal Talent Pools 7. Identify External Talent 10
  • Seven Generations 1. Board of Directors 2. CEO Disaster Replacement 3. CEO Strategic Succession 4. Executive Roles 5. Middle Managers 6. Internal Talent Pools 7. Identify External Talent Responsibility • Board • Board • CEO Board CEO Executive Roles 11
  • What are we looking for in a board member? Asking the question: “What are we looking for in a board member?” might be one of the most significant instrumental activities organizations can undertake to improve recruitment (Brown, 2007). Board Position Description • Qualities, skills, and knowledge desired • Mission, Vision, and Values of CU • Code of Conduct • Legal & ethical obligations • Time requirements • Educational requirements • Leadership competencies • Duties 12
  • Board Position Description Approved and signed Referred to during: •Recruitment •Education Events •Performance assessments Recruiting and Vetting 1. What is needed in a board member? 2. How many board members are needed to best serve the credit union? 3. What is the anticipated replacement date for a board member? 4. How will we know when we have the right person? 13
  • Recruiting and Vetting • The board is the search committee. • There is no HR to do this for you! • Each member should be intimately aware of the qualities and duties required. • Constantly searching for the next board member (incapacitating illness, sudden demise, surprise departures, underperforming…) Nominating Process • • • • • • • Create short list: Black Book Collect resumes, CVs, Bios, LinkedIn, Vet interest, interview: Ask questions Recommend Interview and reference Board votes Develop as a contributor 14
  • Needed Conversations • Initiate two conversations in the Board Room -What competencies are currently best leveraged? -What competencies do we need today to be effective and sustainable in the future? -How do we know? Orientation: Board Member Development 1. What are the expectations that must be met prior to voting? 2. How does a new person know the expectations? 3. How will a person obtain or meet these requirements? 4. How will you know when they have met the requirements? 15
  • Orientation and Development Policy/Plan • Development practices lead to stronger board members. • Stronger board members are a significant predictor of board performance. • Educated board members are far more likely to exist in organizations perceived as operating effectively. Development Policy/Plan •Continual development of individuals •Continual development of team 16
  • Orientation and Development Policy/Plan Team Evaluation • Board performance, as a team. • Areas of improvement to work on in the coming year. • Shared understanding of effectiveness. • Refresh individual understanding and create a shared perspective of responsibilities. • Asses individual satisfaction with the board’s performance. • Assess opportunities for team development. Orientation and Development Policy/Plan “Time spent building an effective board as a team is not wasted…the interpersonal dimension…was found in organizations that were judged to be more effective.” (Brown, 2005) 17
  • Director Development Generative Conversation with Chair Reflective – historical Speculation – what could be different (scenarios) Shifting – what needs to shift Action – effective change Director Development Individual Development – Continuous Education and Development • Based on Position Description - Position description sets the expectation and forms the basis for development. – Evaluation • Meeting attendance. • Quality of attendance (comes prepared…). • Constructive contributions to conversations and the business of the board. • Participation in continuing education efforts. 18
  • Board Learning Culture: Structured Development • Creates a learning culture in the board room. • Go beyond the initial individual orientation. • Create learning and development initiatives. • Subject Matter Experts on-site for education. • Make learning part of your agenda two to four times a year. • 15 minutes a meeting. A 10 Step Process for Successful Recruiting 1. Establish What is Important: Mission, Vision, Values 2. Determine Qualifications: Expertise and Knowledge 3. Create Volunteer Position Description 4. Identify Prospective Candidates 5. Design and Implementation Application Process 19
  • A 10 Step Process for Successful Recruiting Cont’d 6. Interview and Vet 7. New Volunteer Orientation 8. Annual Individual Review 9. Board, as a Team, Evaluation 10. Board Learning Plan Cover All the Bases Incapacitating illness Sudden demise Under performing Surprise departure Organization restructure 20
  • Outcomes of a Succession Plan • Increase capacity for knowledge generation and sharing. • Provide increased opportunities for HiPos. • Tap potential for intellectual capital. • Encourage advancement of diverse groups. Insert Your Logo Here Outcomes of a Succession Plan Cont’d •Improve employee morale. Improve employees ability to respond to changing environmental demands. •Be more relevant in the market. •Legacy leadership and open learning environment. •Walk your talk. Insert Your Logo Here 21
  • Planning for CEO Successors • A board responsibility • Insist on “ready now” or “drop-in” candidates • Integrate CEO coaching in position description • Update CEO position description as part of strategic planning • Keep current on compensation and executive benefits Succession planning is not a “drive-by” event that leaves leadership to chance. 22
  • CEO Responsibility • Mentoring and coaching internal candidates • Provide access to a Leadership Development Plan • Presenting an annual evaluation of candidates Viable Starting Points • Strategic Plan • What decisions does the CEO make? • What competencies are required to make those decisions? • How does our governance process support CEO/Board relationship? 23
  • Approaches Rifle Top-Down Futuring MarketDriven Career Planning Insert Your Logo Here Competencies • Resume skills: – Expertise – Education – Accomplishments • Intelligence • Leadership Presence (93%) 24
  • Timing Opportunities Fitfully Every vacancy can become a crises. Periodically Usually quarterly or annually; may be coordinated with annual performance review. Continuously Ongoing; development and coordination become 2nd nature. Dissemination: Open or Closed Closed Treated as top secret, under the table. Managers assess employees without input from those impacted by the process. Open Treated with candor. SP is explained to organization. Work requirements, competencies and conditions of success are openly communicated. Invitation extended. Varying degrees of openness. 25
  • Internal Candidate Status Ready Now: Able to step into role immediately or within 6 months. Two successors ideal. •Can step in with minimal lead time. •Has demonstrated success that will add immediate value to the role. Interim: Able to fulfill on basic tactical requirements of the position for a period of 3 to 6 months. •Possesses core competencies to support current strategic initiatives. •May or may not be a potential permanent successor. Targeted: Ready in 6 to 36 months. One to two successors ideal. •Is in specific development for this role. •Seen as worthy of time investment to move to next level of leadership. Ready Future: Ready in 36 to 60 months. Two or more here depending on depth above. •High potential with specific and significant learning gaps. •Needs more success in current role or other roles, or basic knowledge. Learning: Identified as potential high performer. •Early in career or leadership cycle and lacks knowledge or experience breadth or depth. •Leadership competencies show promise but are not yet matured. Ready Now • Able to step into role immediately or within 6 months. Two successors ideal. – Can step in with minimal lead time. – Has demonstrated success that will add immediate value to the role. 26
  • Interim • Able to fulfill on basic tactical requirements of the position for a period of 3 to 6 months. – Possesses core competencies to support current strategic initiatives. – May or may not be a potential permanent successor. Targeted • Ready in 6 to 36 months. One to two successors ideal. – Is in specific development for this role. – Seen as worthy of time investment to move to next level of leadership. 27
  • Ready Future • Ready in 36 to 60 months. Two or more here depending on depth above. – High potential with specific and significant learning gaps. – Needs more success in current role or other roles, or basic knowledge. Learning • Identified as potential high performer. – Early in career or leadership cycle and lacks knowledge or experience breadth or depth. – Leadership competencies show promise but are not yet matured. 28
  • Succession Planning Risks CEO Mike Benton Ready Now Interim VP Operations Molly Haeusslers Naomi Amaya Molly Haeussler VP Lending Peter Johnson VP Strategic Development Naomi Amaya VP Human Resources Kathleen Elizabeth Fiona Summers Bryce Edward Fred Weston Targeted Ian Jefferson Scott William Ready Future Rebecca Young Bridget Condon Learning Marley Jackson Rebecca Young Madison Nichols Jeff Richardson Rebecca Young Insert Your Logo Here Benchmark Insert Your Logo Here 29
  • Insert Your Logo Here Communicate the Succession Planning Process/Timeline •Lack of communication produces collateral damage. •Greatest risk is last 18 months of CEO tenure. •Good people start to look outside when there is lack of communication. 30
  • Conversation Today • • • • • Overview and Best Practices Levels and Types Board Evaluation Needed Conversations Integration of Board Succession Planning with CEO Succession Planning Insert Your Logo Here Thank you Deedee Myers, CEO DDJ Myers, Ltd. 31