From Red to Black: Does your credit union have a Succession Plan?

 

Succession planning plays an integral part in your credit union’s future health by providing a plan of action for your credit union’s board and employees if something happens to the CEO, whether it’s a sudden death, accident or unexpected retirement.

 

Not only can a succession plan protect the future of your credit union, it can also help to protect the long-term success of the entire movement. The National Credit Union Administration Chairman Debbie Matz emphasized the importance of succession planning at a recent CUES Directors Conference and urged credit unions to create such plans so that they will be better prepared to provide support and prevent potential crises that could impact the financial security of credit union members and the movement itself.

 

“Engage in diligent succession planning,” Matz said. “The safety and soundness of credit unions will depend in large measure on a healthy, well-planned continuity of leadership on volunteer boards. Volunteer leaders should make this a high priority of service.”

 

Still not convinced? Here are some reasons why succession planning can't – and shouldn't – wait:

 

• You can't plan for a disaster. Whether it's an unforeseen illness, a natural disaster or a CEO's decision to suddenly retire, the reasons for having a succession plan in place before it is needed are endless. So while you can't plan for disaster, you can put into place a series of contingencies that will help your credit union stay afloat if, in fact, catastrophe occurs.

 

• Succession planning benefits the business now. Succession planning has evolved over the years and is no longer a plan that can only be accessed when leadership is going to change. Instead, a succession plan can be used before its "real" intent is necessary. It can be used to build strong leadership, help a business survive the daily changes in the marketplace and force executives to review and examine the company's current goals.

 

• Succession planning gives your colleagues a voice. By involving the board and other staff members it will give them an opportunity to express their needs and concerns. Giving them that voice will also help create a sense of responsibility throughout the organization, which is critical for successful succession planning. Resist the temptation to solely carry the entire weight of creating and then sustaining a plan.

 

• A succession plan can help sustain income and support expenses. A succession plan can provide answers as to what you – and your staff – will need for future income, as well as what kinds of expenses you may incur once you step out of the main leadership role.

 

• Succession planning makes you look at the big picture. Some companies mistakenly focus solely on replacing high-level executives. A good succession plan can go further and force you to examine all levels of employees. The people who do the day-to-day work are the ones keeping the business going. Neglecting to add them to the succession planning mix could have dire consequences. As you develop your plan, incorporate all layers of management and their direct reports.

 

• Succession planning strengthens departmental relationships. When regular communication occurs between departments you are more likely to experience synergy, which breeds a culture of strength. Make sure that you link your succession planning activities with human resources. After all, HR is about people. By including HR in succession planning, you can incorporate elements like the employee-evaluation process, which can help when deciding whether to fill vacancies with internal candidates.

Change – a major component of a succession plan – is exciting and can bring a company unforeseen rewards. Still, change can be a source of tremendous stress, especially when peoples’ livelihoods are at stake. As you put your succession plan together, consider its positive effects on the business. Planning for the future is exciting and, if done correctly, can inspire your workers to stay involved and maintain company loyalty. It's true that a plan is often put into place to avert catastrophe, but it's also a company's way of embracing the future – a business strategy that is essential for survival.

 

Need help with your succession planning? Give us a call. Bill can be reached at (262) 751-3420.

From Red to Black: Does your credit union have a Succession Plan?