San Antonio Federal Credit Union ($2.9B, San Antonio, TX) is the fourth largest credit union in Texas by asset size. It serves more than 250,000 members in government, healthcare, and the military through 18 branches in San Antonio and one in Houston. SACU is a pioneer in indirect auto lending and manufactured home lending and is a leader in shared branching. I sat down with Jeff Farver, SACU’s former president and CEO, just before his retirement in January to discuss the credit union’s approach to executive development.
Do you train up-and-coming executives?
Jeff Farver: One of the critical responsibilities of a CEO is succession planning, and we take it seriously.
How do you attract and retain talented executives?
JF: If you want the best and the brightest on your team, you have to give them challenging work and tell them when they feel ready for a CEO position, you will support them in their quest. But I tell my people there are also restrictions. I say if they do leave for a CEO position elsewhere, they pledge a long-term working relationship with SACU, and they should not come around stealing talent.
Here’s an example of a long-term relationship: We have a CUSO called Credit Acquisition Resource System (CARS), an indirect auto lending business for 20 credit unions. When Larry Biernacki left SACU to run Arkansas Federal Credit Union ($832.7M, Jacksonville, AR), he signed up with CARS; so did Ed Speed when he went to TDECU ($1.7B, Lake Jackson, TX).
How else do you work with rising executives?
JF: We’re supportive of their individual goals. We want to build a leader’s KSEs – that is, “Knowledge, Skills, and Experience” – and part of doing that is giving them tasks that are long term. A CEO works 3-to-5 years or 5-to-10 years to grow a company. Part of our development philosophy here is to attempt those sorts of horizons. The man who is replacing me in January, Steve Hennigan, has been building a manufactured home lending operation for years; he’s grown it from 11 to 120 employees. This is the kind of work experience a potential CEO needs.
Did you have a mentor when you were younger?
JF: I did not. I became the CEO of an $80-million credit union when I was 34. No one really helped me or showed me the ropes. I think one reason I am so committed to training younger executives is that I did not have a mentor. I pretty much figured things out on my own. I did have a consultant, Jim Cardwell, who helped, and I learned a great deal from Elliott Jaques’ Requisite Organization, a book about leadership development.
A Legacy Of Leadership
Leaders aren't born; they’re made through hard work, said legendary football coach Vince Lombardi. The below CEOs developed as leaders under Jeff Farver and are a testament to the legacy his hard work has created.
How does leadership development work at SACU?
JF: We work on all levels of management. Managers are especially meant to work with persons two levels below themselves; they are accountable for developing talent. We have developed an institutionalized system for leadership development. With first-line supervisors, we work hard on the KSEs. For the next level up we spend more time on the likes of Six Sigma, building leadership dashboards, and reporting systems – different levels require different activities.
How do you deal with the sacrifice of someone leaving?
JF: It’s really not a sacrifice if you keep talented people until they are ready to go. In my experience, it is the Board that is more worried about sacrifice. But I can pretty much assure Board members that there is lots of talent coming up from the smaller credit unions.
Do you see some of your executive development as helping other credit unions?
JF: Yes and no. The knowledge and skills a talented manager has gives you long-term success. I believe each credit union should develop its own talent for the benefit of the present members. Thus the training is really for us. But when a highly developed manager leaves, an indirect outcome for the industry is well-trained talent.
Do you have advice for others leaders that want to develop executive talent?
JF: Everyone has to look into this. Baby boomers are retiring; there are going to be many shoes to fill. I recommend Elliott Jacques’ works, especially Requisite Organization. Something we adhere to is a triangle of skills and abilities. At one apex are the KSEs; at another are Values Preferences; and at another Problem Solving. When we see someone with good KSEs (think résumé) and good Values Preferences, then we look to see if he or she is a good problem solver – the higher up someone goes, the tougher the problems and the more important the problem-solving skills are.
Do you recommend bringing in consultants for in this sort of work?
JF: Possibly. Internally you might be good at building the KSEs but need help in training persons to understand their own strengths and weaknesses. A consultant can help there. Jim Cardwell can be good here. He works with persons on the COO level about the adjustments to be made when moving up to a CEO position, i.e., working with a Board and so on. Persons like Jim can be helpful in mentoring a rising executive to a CEO level.