A CEO Transition 18 Months In The Making

A long-term approach to succession at Tower FCU ensured a smooth passing of the torch at the top level of leadership.

 
 

Top-Level Takeaways

  • Tower's succession plan detailed expectations and duties for the first day and first week as well as the first 30, 60, and 90 days.
  • The new CEO was managing up to 90% of the organization four months into the transition.

When Richard Stafford took over as CEO of Tower Federal Credit Union ($3.0B, Laurel, MD) on July 1, 2017, he was already familiar with his new role. Thanks to an extensive succession plan developed by his board and predecessor, long-time CEO Martin Breland, Stafford had spent the previous six months easing into the majority of the duties he’d perform as CEO — all with the benefit of real-time coaching.

In this Q&A, Stafford, who served as executive vice president and senior vice president of member services at Tower before taking the helm as CEO, discusses what other industry leaders can learn to ease the transitions in their financial institution’s future.

How important is it to gain experience within an organization before taking over as CEO?

Richard Stafford, CEO, Tower FCU 

Richard Stafford: If it’s at all possible, I strongly encourage it. You can’t overestimate the importance of understanding the culture and the history of an organization.

Experience within the credit union gives you the opportunity to appreciate culture and history as well as the ability to strike the right tone with employees, the community, and the board. As CEO, you are, in essence, the culture champion, so developing an appreciation for and gaining a deeper understanding of culture is key.

Did you have specific training or coaching prior to becoming CEO?

RS: Absolutely. The credit union’s board and Martin Breland, who had been with Tower 28 years and spent 24 of them as CEO, actually developed a very granular plan.

Martin gave the board a two-year notice prior to his retirement. Approximately 18 months prior, they collaboratively mapped out a detailed strategy to look at both internal and external candidates and ensure a successful transition.

They executed with precision on that plan. It was so granular that once they selected a successor and that successor was physically on-site, there were clear expectations and duties mapped out for the first day, first week, and over the next 30, 60, and 90 days. The plan included Martin working closely with his successor throughout his last six months at Tower.

 

 

 

What was the initial interview process like?

RS: I can speak about the internal process. I interviewed with the entire board, not just an executive committee. It involved situational awareness and analysis in both verbal and written formats. I was provided with myriad scenarios that might play out to test my thoughts on strategy, leadership, and tactical skills.

The board also wanted to thoroughly understand my long-term vision from not only a financial acumen perspective but also a strategic and market analysis standpoint.

Lastly, the board wanted to ensure I embraced the culture and history of the organization. 

What types of responsibilities did you take over during the six-month transition period?

RS: On day one of the announcement, I sat down with Martin and we discussed what the next six months would look like. It was clear which responsibilities I would take over immediately and which I would take over in a week or a month.

At four months into the transition, I was managing 80% to 90% of the organization.

Richard Stafford, CEO, Tower FCU

From that point forward, I ran all the senior management meetings and employee meetings, and I started taking over sections of the board meetings. The senior management team also started reporting to me immediately. This all happened within the first two weeks.

At four months into the transition, I was managing 80% to 90% of the organization. By the time Martin’s retirement came, I had already taken over the majority of the CEO duties.

The moral of the story is to plan in advance — way in advance — and know there cannot be too much granularity in the plan.

This was an 18-month to two-year process. Having the luxury of time to plan really paid dividends. I’ve complimented my board and predecessor on having the foresight to create the plan and the discipline to execute it.

CU QUICK FACTS

Tower FCU
Data as of 03.31.17

HQ: Laurel, MD
ASSETS: $3.0B
MEMBERS: 164,317
BRANCHES: 17
12-MO SHARE GROWTH: 5.43%
12-MO LOAN GROWTH: 40.85%
ROA: 0.50%

How did you and the previous CEO work together during the transition period?

RS: Martin and I worked shoulder-to-shoulder during the transition, but he went out of his way to ensure he didn’t overshadow my style, my leadership, or my strategy.

He provided coaching throughout that six-month period. We had to check our egos at the door, but having that opportunity to work together and be candid with each other ensured we had in mind the best interests of our employees and members throughout the transition.

The significant overlap also allowed Martin to provide a lot of context, coaching, and guidance that only he could give because of his experience.

We continue to keep in touch, although it is usually more social in nature, and he has agreed to remain available to us for an extended period if any transitory questions arise.

How has your experience in areas like sales and marketing helped in your current role as CEO?

RS: I think the board appreciates my holistic view of the credit union industry and financial community.

I have not only marketing and sales experience but also operations, IT, lending, insurance, and wealth management experience.

I might not have realized it back in my 20s and 30s, but these positions helped me develop a greater appreciation for what it takes to be successful in financial services. They helped me truly understand the different lines of business and the member value that each delivers. 

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Have you thought about your own succession plan?

RS: During the transition, we reviewed a 50-item task list, and creating a short-term and long-term succession plan for myself was one of the top five items.

My first task as CEO was making sure we had plans in place to ensure the continuity of the leadership of the credit union. We want all our bases covered on hour one of day one.

Of course, I look forward to a long and healthy tenure at Tower, but it’s prudent and in everyone’s best interest to have a plan mapped out. I think most credit unions have a plan of some kind, but it might not be as granular as ours or put in place immediately when a new CEO takes over. 

What advice do you have to credit union leaders on the cusp of a transition?

RS: If time allows, shadow the current CEO — don’t come in cold.

Also, develop an appreciation for the history and culture of the organization and understand it from the lens of employees, members, and the board.

A CEO must stay true to their core values as well as the institution’s. I was fortunate in that my core values align with the core values here at Tower. 

This interview has been edited and condensed.

 

Aug. 7, 2017


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