Life Without A CEO: How Interim Support And Cross-Communication Created A Succession Success Story

Kathy Elser talks about her first six months at the helm of SF Fire Credit Union.

 
 

Top-Level Takeaways

  • An interim CEO minded the shop at SF Fire Credit Union for eight months while the cooperative searched for its next chief executive.
  • Onboarding for new CEO Kathy Elser included weekly calls with the interim CEO as well as meet-and-greet listening sessions with staff and managers.

Six years ago, a CUNA whitepaper revealed 20% of CEOs at credit unions with more than $100 million in assets planned to retire within two years, yet 42% of the industry’s cooperatives don't have a succession plan in place.

As some credit unions work studiously on their plans, others must face reality a bit sooner. Such was the case at SF Fire Credit Union ($1.3B, San Francisco, CA).

In June 2016, then-CEO Darren Hermann departed the credit union, and the board named Marla Shepard as interim CEO. Shepard had more than 40 years of credit union experience and had retired as CEO of California Coast Credit Union in early 2015.

 

 

 

The search was on at SF Fire for a permanent CEO. And after eight months, the staff was ready to welcome Kathy Elser as their new leader.

Elser joined the Golden State credit union from BECU, where she was chief financial officer and senior vice president of finance and administration.  

“She has the experience to lead during a time when credit unions continue to face disruptive and competitive forces,” said board chair John Sweeney in a statement posted on SF Fire Credit Union’s website. “Her robust industry network will also serve our members well.”

Here, Elser talks about her first six months on the job, starting anew after 20 years at BECU, and what others in the industry can take away from her succession experience. 

Katherine Elser, CEO, SF Fire Credit Union

What was SF Fire’s CEO search process like? How did the credit union find you? Who was in charge during that interim period?

Kathy Elser: The credit union had an interim CEO during the search process. She had retired from another California credit union and had a lot of experience in the industry. She kept things running smoothly while the board found a permanent replacement.

I wasn’t really looking for a job but had worked with one of the credit union’s previous CEOs, Diana Dykstra, on another industry board. She mentioned my name to the credit union’s recruiter. When Bridget O’Rourke contacted me through Linkedin, I was intrigued by the opportunity.

The selection process included a project and several in-person interviews. Although I loved my hometown of Seattle, I fell in love with the board of directors and spirit of SF Fire Credit Union.

What have you found to be most helpful in your transition to the new organization?

KE: There are two things. First, the support of the interim CEO. Second, getting out and listening to the staff. The combination of those two elements allowed me to quickly get up to speed and identify what is working well and where we have gaps as an organization.

I created a 90-day plan to immerse myself in the organization. I introduced myself to the employees and listened to their thoughts about the credit union.

Kathy Elser, CEO, SF Fire Credit Union

The support of Marla Shepard was invaluable. She stayed on-site for a couple of weeks after I arrived, and we scheduled weekly phone calls for the first 60 days. Plus, she’s available should something come up that I’d like to discuss with another experienced leader.

I also found it helpful to get out and listen to staff versus trying to research or learn about the organization in isolation. Getting the team’s perspective is vital to success.

Did you have a formal onboarding process?

KE: There was not a formal onboarding process in place when I joined. So, I created a 90-day plan to immerse myself in the organization.

The plan included a lot of meet-and-greet sessions at our various locations. I introduced myself to the employees and listened to their thoughts about the credit union. After those initial sessions, I started to sit down with the management team, individually and as a group, to learn more about the organization’s challenges and opportunities.

Based on these meetings, I drafted a report to share my initial observations with the board.  

How have you developed relationships with your board?

KE: My board is engaged, and I am fortunate to get to meet with several of them on a regular basis. Board members drop by the office for informal conversations, and I’ve gotten to know the board chair well these past six months.

The interim CEO has also become a board member and continues to be a great resource and champion of mine. In fact, as soon as I was hired, the interim CEO began running things by me for input and awareness.

What did you do to prepare before arriving at the new credit union?

KE: The credit union hired me hired in January, but I didn’t make the move and physically start until March. However, I did a lot of reading to get up to speed on the credit union before I arrived.

As I mentioned, the interim CEO began to call me regularly to discuss those big decisions that I would ultimately carry out. That awareness was helpful and set me up for success. I am grateful for her willingness to keep me in the loop even before I was physically present.  

What’s been the most challenging aspect of the transition?

KE: Going from a $16 billion shop to a $1 billion shop has given me the chance to go back to my roots, roll up my sleeves, and get my hands dirty instead of relying on a seemingly endless staff. It hasn’t been challenging as much as it’s been different.

One of the biggest challenges at the credit union is that it has doubled in size in the past seven years. This rapid growth has led to both challenges and opportunities we need to address.

We also have a relatively young executive management team. In addition to myself, we have an executive who has been with the credit union 10 years, another who has been here five years, and everyone else has been here one year or less.

The newer team is wonderful in terms of seeing the credit union with fresh eyes and having the opportunity to create our own masterpiece without any preconceived notions. However, we don’t have the history or depth of historical knowledge you might find with more tenured teams.

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You just started, but are you working on a succession plan?

KE: Yes, we absolutely have work to do in that area.

We have discussed succession planning, and I’m working with my individual team members. I’d like to have a succession plan in place for each of them in addition to myself. I’ve only been here six months, but you can identify the superstars pretty quickly, and I want the best opportunities for my team and the organization. That includes succession planning and career pathing.

CU QUICK FACTS

SF Fire Credit Union
Data as of 06.30.17

HQ: San Francisco, CA
ASSETS: $1.3B
MEMBERS: 66,269
BRANCHES: 4
12-MO SHARE GROWTH: 7.9%
12-MO LOAN GROWTH: 4.4%
ROA: 0.91%

What advice do you have for credit union leaders transitioning to a CEO role?  

KE: Take the time to learn about the organization before rushing in to make changes. Learn about the credit union’s history, why it is where it is, and why it does things the way it does.

However, there is a balance. You also need to move fairly quickly to set a clear direction for the future.  If you wait too long, it might be more difficult to make changes. Once you’ve done your research and have tapped the right subject matter experts, make the decisions to move the organization forward.

I believe in hiring outside experts, when needed. For example, the credit union had never done a long-term strategic plan, so I hired Jay Johnson at Callahan & Associates to help us with that.

We all come from different backgrounds and can’t be an expert in all areas. Don’t be afraid to supplement for support.

This interview has been edited and condensed.

Strategy is a process. That's why Callahan & Associates has developed team learning experiences that help executives become more effective, make better strategic decisions, and ultimately thrive — together. Learn more at Callahan.com/strategy.

 

Oct. 16, 2017


Comments

 
 
 
  • Thank you, Dan, for taking the time to read the article and to comment. We appreciate that kind of reader engagement. Regarding the bad math -- you’re right (and it's fixed). Based on the article quoted, more than half DO have succession plans. As far as the apples and oranges observation, it’s true the comparison is not precise, but the point that all credit unions should have succession plans remains valid. Despite a CEO's retirement intentions and preparations, sometimes life has a different plan. And the reason cited for many mergers of smaller credit unions is that they can’t find a suitable successor to a longtime, retiring CEO or manager. From a movement perspective, that’s something to keep an eye on. Of course, whether these numbers are alarming is up to you, the reader. And again, we appreciate your observations. Please continue reading CreditUnions.com and keep those comments coming.
    Rebecca Wessler
     
     
     
  • From paragraph 1: "20% of CEOs at credit unions with more than $100 million in assets planned to retire within two years, yet fewer than half of the industry’s cooperatives had a succession plan in place." First of all, you're comparing apples and oranges - 20% of credit unions > $100 million on one hand compared to fewer than half of ALL credit unions on the other. Second, if 20% of CEOs are planning to retire, it follows that 80% are not planning to retire. If 80% of CEOs are not even planning to retire, then it is decidedly less shocking and less concerning that fewer than half have succession plans. Third, the very CUNA article to which you link states that "some 42% of credit unions don’t have a succession plan in place". So evidently 58% of credit unions have succession plans. But you state that fewer than half have succession plans. Which is it?
    Dan B