Every day there are articles that either forecast huge turnover in credit union leaders or actually announce a current changing of the guard at a specific credit union or association. The fact is that leadership turnover is likely to be more severe than is being predicted. Most of the attention and statistical forecasting is focused on the retirement of baby-boomer CEOs. Yes, that is a significant contributor to expected turnover. But so too are other causal factors that aren’t being talked about -- illness, death, performance terminations (those will probably be communicated as “early retirements”), and normal job mobility (i.e., a CEO moving to a larger or more attractive opportunity).
All these CEO moves will trigger a “domino effect” that will cause openings down through a credit union’s management organization and across the industry. As a result, a 50% turnover of all senior leadership positions (not just CEOs) could easily occur in the next few years.
The challenge of maintaining effective leadership comes at a time when managing a credit union has become more complex and demands a more skilled approach. Yet, expectations still run high. New leaders are expected to “hit the ground running” and produce results quickly, as well as transition and integrate seamlessly into their new role and possibly also a new organization.
Managing the Transition Process
Most new executives are up to the task technically. They have learned and been coached on financial management, operations, products and services, member service, and support systems. But few have been taught how to manage the transition and integration process itself. Today that process is called onboarding and is being recognized as a critical component in an executive’s leadership development. An onboarding process provides a road map and best practices approaches for a new leader. The process helps them navigate the obstacles of their new role, avoid missteps and mistakes, and meet expectations.
According to Mark Elliott, founder of PowerStart Onboarding, many of the Fortune 500 corporations saw that the “sink-or-swim” approach to leadership transitions wasn’t working. Too many of their newly placed leaders were struggling, even ones with strong track records of success and experience making job changes. As a result, Onboarding processes have in recent years become more and more available.
But, credit unions are late to recognize the need. Elliott tells the story of one of his clients, a CEO of a billion dollar credit union, who said: “We give more support and training to a new teller than we do to a new executive. And, look at the investment we’ve made in the executive and what’s at stake.” That CEO understood the need to take action to fix the problem. The question facing the credit union industry is: Will newly placed leaders find themselves in a sink-or-swim situation? Or will they receive the support and leadership development to accelerate their onboardings? It is a critical time for the industry.
The Importance of a Structured Approach
As a CEO or human resources executive responsible for building talent in your organization, the first step is to assess what your organization needs. In the past the focus was on talent identification. That is still important. But so too is ensuring the identified talent gets the necessary support and specialized development to be successful when assuming a new leadership position. With the challenges of today’s marketplace, it is no time for stumbles and mistakes.
Many organizations assume that a promoted candidate has a huge advantage over a recruited one. After all, the promoted leader knows the culture, has established relationships, and understands how things work in the organization. Of course some of that is true, but it also is fraught with potential for problems. A person promoted from within is rarely given the breathing space of a “honeymoon period”. In fact, the expectations of their performance are often unrealistically high. Their established relationships may have been as peers and now are as the new leader’s subordinates. That’s a huge change. And, the culture at a lower management level is often very different than the one they will experience at a more senior level. So, do promoted leaders need an Onboarding process? Elliott says yes, in different ways but every bit as much as a recruited leader.
According to Elliott, “Organizations that commit to helping their new leaders succeed will see a greater return on their investment and will significantly reduce the costs associated with a leadership failure.” Facilitating success is more than a brief orientation, periodic discussions, and the offer of an ‘open door if you need me’. Providing your new and emerging leaders with a structured program designed to teach them how to succeed in their new role is needed and will make a huge difference.
By understanding the issues that new leaders face – and by providing them with the tools to manage them – you will help your emerging leaders to generate momentum, create early wins, lay a solid foundation and build credibility that will translate into both immediate and long term success.
Mark Elliott has over 25 years experience in consulting for companies in the United States and abroad. His consulting work covers a broad range of issues including leadership assessment and development, executive recruitment and assimilation and organizational development. PowerStart Onboarding will be available in September 2006, through an online university format in strategic partnership with Harland Educational Services. For more information about PowerStart Onboarding visit www.powerstartonboarding.com.
Harland Educational Services, part of John H. Harland Company (NYSE: JH) delivers solutions for staff and member education and research. For more information, call us at (800) 291-6117 or visit http://www.harlandeducation.com.