How Credit Unions Can Develop “Ready-Now” CEO Candidates

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How Credit Unions Can Develop “Ready-Now” CEO Candidates

Executive succession planning and finding someone to step into a CEO position is a critical role of your credit union’s board. When done strategically, an active approach to succession planning can help organizations develop internal candidates into “ready-now” executives and position them for a CEO role years before a current leader leaves their position. While the process is lengthy and thorough, our “C.U. on the Show” guest shares why it’s critical to creating sustainable leadership within your organization.

Doug welcomes Deedee Myers, founder and CEO of DDJ Myers, a firm specializing in strategic planning support, succession planning, leadership development, and board governance. Having worked in the credit union movement for over 35 years, Deedee is revered as a thought and practice leader in transformative change, organizational evolution, and helping advance people and organizations.

Focusing on the importance of leadership development, Deedee explains in detail the process she uses when helping credit union boards develop “ready-now” CEO candidates—and it should start a lot earlier than you may expect. For example, Deedee encourages executives, CEOs, and boards to develop a mindset that considers the future of the candidate and organization with every hire. Could your new branch manager be developed into an executive and later a CEO? During the episode, Deedee explains the different sides of the recruitment process, including:

  • What boards, CEOs, and recruiters are looking for when searching for a new CEO
  • What credit unions can do to develop internal candidates for the CEO role
  • What credit union executives can do proactively to better position themselves for a CEO role

The Search for a New CEO

When reviewing resumes, Deedee shares how it takes less than six seconds for recruiters to decide whether a candidate is viable. She explains she searches for specific language that demonstrates how candidates have added value to their organization and how they see themselves in the future. She provides tips such as adding a solid value statement at the top of your resume, focusing on strategic rather than operational language, and showing you’re committed to continual professional growth.

However, the resume is only one part of the process. As Deedee puts it, credit unions should move away from a traditional linear checklist of what a CEO should be. That is why she also helps credit unions perform a multitude of assessments to find a leader with both the skill set competency, and the ability to add long-term value, envision the organization’s future, and embody the emotional intelligence required of the role.

What Credit Unions Can Do

Deedee provides several ways current credit union CEOs and boards can help develop internal candidates for a possible CEO role in the future. One of the first steps a board should take is to begin proactively building a succession and executive development plan long before the current CEO plans to leave their position. Deedee encourages and facilitates conversations among the board and CEO about the future of the credit union, industry, and CEO role. Engaging a firm like Deedee’s can help boards establish a baseline of criteria and evaluate where internal candidates currently fall within those standards. Credit unions can then use that data to support executives in refining or improving their readiness.

If you are a current CEO, you can find new ways to help internal candidates grow and mature into a potential CEO role, which improves an executive’s skills and strengths and incentivizes retention. For example, you could offer cross-training opportunities, involve the executive in strategic planning and board meetings, give them more responsibility, or move them into an entirely new role to see how they perform.

What Credit Union Executives Can Do

Suppose you’re an executive interested in a CEO role, whether at your or another credit union. In that case, in addition to improving your resume, you can express to your CEO that you want more leadership responsibilities or to be part of a cross-functional task force. Additionally, you can connect with leaders outside your organization who have already attained a CEO or similar position. It also reflects favorably if you’re highly involved in the community and continuing education.

Stream the episode to learn more about becoming or developing a “ready-now” CEO candidate, plus:

  • A realistic timeline Deedee suggests for when boards should begin succession planning
  • What happens when a candidate presents red flags, or there are limited internal candidate options
  • How your credit union’s board “type” can affect your ability to find a viable CEO candidate

Listen today.

 

Deedee Myers and DDJ Myers are not affiliated with or endorsed by ACT Advisors, LLC.


Audio Transcription (pulled from the podcast)

Doug English (0:00)

My guest on today’s podcast is Deedee Myers, founder and CEO at DDJ Myers. Deedee is known as a thought and practice leader in transformative change and organizational evolution for people and organizations. In this episode, we discuss strategies for becoming or developing a CEO ready-now executive, including cross-functional leadership and resume tips. And be sure to listen to the end, where Deedee shares when and how to work with your board when developing internal successors. Welcome to the show, Deedee. We’re delighted to have you with us today to talk about how to get ready for the CEO role. But before we get into that, tell me how did you get started working with the credit union movement? 

Deedee Myers (00:47)

Oh gosh, I have to say thanks to Wade Barnett. He’s an investment person. Long time ago I met him, maybe 35 years ago, when I worked in asset liability management. And that’s how I got started in this field. He said, hey, you got to move away from banks and include credit unions in your client work. I worked at Sendero Corporation—headed up their marketing, education, and client training for asset liability management, a wildly successful organization. So we expanded and brought credit unions in. So in our business here, Doug, even in the search part of it, we were huge in banks for a long, long time; we just kept getting pulled in, drawn into credit units. So now it’s a huge part of our offers, from five in the morning until eight at night. It’s just what we do. Credit unions. So we’re loving it. 

Doug English (01:37)

There’s a bunch of wonderful people in the credit union movement. And some of them need to get ready for the CEO role. Lots of folks are reaching that age and the NCUA has a new proposed regulation for board-required succession planning. So talk to us a little bit about what you’re seeing going on in that area of the credit union movement? 

Deedee Myers (02:02)

Well, first of all, I hope whatever comes out of NCUA is actually embodied and not just as a checklist thing we have to do in credit unions, but it’s actually integrated throughout the organization. And there’s that spirit of like, let’s develop people, let’s keep looking to the future. What we’re suggesting for our clients is to have a recruitment strategy that when you hire somebody, actually project their future potential value to the company. So if they come in, as a branch manager or area regional manager, could they later on be your chief experience officer? Later on, could they be your CEO? So instead of just bringing them in as a body for that role, what value could they have? So that’s one thing. So I’m hoping that NCUA proposed ruling has that kind of impact and value in organizations. Second, Doug, there’s a lot of CEO retirements going on; it picked up quite a bit last year. We doubled ad revenue on our CEO searches so we have our track shoes on; we’re doing a lot of good work there. What we’re hoping from the candidate or internal candidate perspective is that more of the people who think they want to be CEOs start to look at how they have actually created their own journey map to be a CEO. So one thing that happens is we run a CEO search, go out to market, and we get resumes. And we look at the resumes. It’s widely known that recruiters take three to six seconds to look at a resume, and then decide, do I keep looking? Or does it go into the no pile? So that’s a start there.

Doug English (03:45)

Wow, large font.

Deedee Myers (03:47)

Absolutely. I was watching a YouTube video the other day and she said she does six seconds. I go, yeah, I get it. I used to say three, but you know, six. So it’s like, what is on the top of that resume that we need to see where we’re enticed to lean in and keep going? 

Doug English (04:05)

Hmm. Let’s go into that. So tell me what do you want to see? What is the thing that causes you to keep going? And what’s the thing that causes a hard stop in that resume? 

Deedee Myers (04:16)

Yeah, so I admit, I’m a bit of a weird duck in this kind of domain, because I like to look at what’s the strategic context this person has about their life, about their career. I like to look and see where the candidate locates themselves in the career? How do they identify themselves? So at the top of the resume, what I’m looking for is there a statement like, I’m a CEO ready-now executive; I’ve impacted and added value to organizations in these ways. So I’m looking for that pull in. If that’s not there, I’ll go right to their position. A lot of resumes, Doug, people just put their position at the top of the resume, then they regurgitate their position description. I oversaw accounting, I oversaw finance, I did this, I did that. So I’m going okay, I keep looking and looking, and I go, what’s the value add they had? If they did oversee the investment portfolio or they oversaw the retail operation, how did that add value to the membership? How did that add strategic value? How did that support their vision? So I’m looking for that vision, strategy, value impact kind of language on a resume.

Doug English (05:20)

So strategic thinking, right, in the way you put the language together, showing that you’re already mentally thinking like a CEO, and not just thinking like a role player. A critical role, not that it’s a minor role, but that you’re thinking strategically about the way you even evaluate your own history. 

Deedee Myers (05:47)

Yeah, language is important. So if we see on a resume responsible for, oversaw, to me that’s very operational versus if I see initiated, changed, lead, inspired, added, contributed—boom, boom, boom, just like that.

Doug English (06:07)

All right, so we’re going to have these strategic thinking words in the resume, and what actions should the potential CEO be taking in their day-to-day tasks? Like how do they get ready? You know, we did an interview with a CEO early on in this podcast, a guy named Steve Harkins. He did an interesting exercise with his senior VP level. He had them practice essentially being CEO, he had them run board meetings, he had them run some volunteer events, he gave them problems to solve, and looked for the strategic execution of those problems. 

Deedee Myers (06:51)

I love that. So first of all, one thing we want to look at is how has the candidate developed themselves to be a cross-functional leader. So if they’ve had a responsibility for a single functional domain, they may not be as ready, Doug, to lead across the organization. So one thing they can do is actually be on cross-functional task forces. The cross-functional committees have asked the CEO to take on another area of responsibility. Switch roles with a peer for six months or a year. That’s really exciting but look for coordination and collaboration with other peers. How did they make success with other peers? That’s a great way to look at it. But you have to be able to ask your CEO, hey, I want to be a CEO. Can you help me? What other areas can I bring on? Carla at Numerica is awesome at that where she will take her executives and give them new responsibilities or have them flipped roles just to develop that kind of talent in the organization. 

Doug English (07:56)

There are some issues that might be there, right? If you have a younger CEO, they could feel a bit threatened by some of those activities. Do you see that sort of situation occur? 

Deedee Myers (08:08)

Are you saying a younger CEO developing people and doing that cross work? Well, CEOs are there to lead the organization and part of leading has to be people development, so if they’re feeling threatened about that, then I think they’re in the wrong job. They want to keep inspiring and developing people. Because you know, they may not be there tomorrow and stuff happens. And it’s their job, their legacy, to make sure that there’s sustainable leadership.

Doug English (08:35)

The cross-functional training and leadership within the organization we understand. Now, outside of the organization, we’ve had other interviews on this podcast talking about if you run a $500 million credit union and you want to run a billion-dollar credit union, what should you be doing? And one of the key takeaways was to do what the billion-dollar credit union CEOs are doing. Be where they are, be on the committees, be in the corporate activities they’re doing at that level. So if you want to be a CEO, what should you be doing in your current role outside the organization? 

Deedee Myers (09:16)

I love that. So I talked earlier about how I look at the top of the resume. Then after I’m engaged in the top of the resume, I flip to the bottom. And I go, what is the community impact and value this person’s bringing? Right? Are they involved in their local town, region, and a national way? What are they doing outside the credit union? Because boards do want people who are involved, who do help with the cause and the industry. So I look at that. The other thing I look at is ongoing learning, not necessarily the degrees. I think education is really important. It helps us with our critical and strategic thinking and problem-solving. I look like what have they done? If they got their bachelor’s degree two decades ago and they haven’t done anything since that, that tells one story. But if they’ve gone to the CUNA CEO Institute or the CUNA management schools, or some of the banking schools, or all those great things out there. Then, I go, okay, they’re a continual learner. I look and see those two things there as well. And the idea of I’m a $500 million CEO and I want to be CEO of a $2 billion, $3 billion credit union, I’m hanging out with those people. I’m in those CEO roundtables, I’m actually signing up to lead them. There’s a lot of those things virtually now, Doug, that you can get involved with a lot of roundtables across the country and discussion format. I’m posting, I’m writing articles, getting interviews like this, I’m sharing knowledge. So even in our organization development work, we’re looking at organizations that might be a billion or 2 billion or 3 billion now. But we’re projecting out what do they need to look like in terms of their structure and leadership and competencies and communication and leadership development if they’re when they get to be 5, 6, 7, 8, 9, 10 billion? So they set the target at 10 billion, then they work back to what do I need to do now? And that includes developing people in a big way. 

Doug English (11:12)

Yeah, in an ongoing way. And with the challenge for retaining talent in this environment, I would think that clear path forward would be something that would serve all parties, right? If you’re being groomed to be the CEO, I think that would tend to enhance retention. And can you talk to us a little bit about activities with the board? The potential future CEO, what sort of activities should they have with the board?

Deedee Myers (11:40)

Oh, that’s a good question. There’s two domains there, Doug. There’s the kind of CEO who has the executive in the room only when the executive needs to present something. So they come in, do a 10-, 15-, 30-minute presentation, Q&A, they’re out the door. That scenario, they haven’t had the benefit, Doug, of what was the after conversation, what kind of questions came up? You know, that sort of thing. Then there’s the second domain where the CEO says, no, I really want to develop my people and I want the board to know I’ve got an excellent team and I don’t have all the answers. So I have my team in the boardroom all the time interacting. Of course, there’s probably some guidelines there. But if we are a kind of organization where we believe in internal development, then we do need to have our executives in the boardroom, adding value, listening to the kind of dialogue the board has, and being able to think ahead. So if I’m that kind of CEO, I have people coming in, my people are ready to respond to questions and be more of an impact on the board, I’m thinking, than if I just bring them in and out for 20 minutes and they’re not involved in the after conversation. Of course, strategic planning events are powerful. Please don’t sit with your buddies at strategic planning, please integrate, and sit at tables with board members. And mix that up. When we do facilitation, in the middle of the day we have people change tables. So if I’m sitting with you all day, Doug, or all morning, then I’m going to switch up, I’m going to sit with maybe Christina or Mary or Bob, you know, so we want to mix it up. So people get to know each other. Those are three ways of doing it.

Doug English (13:24)

In my discussion with Peter, we talked about how to keep your board focused on strategic thinking. And one of the many takeaways I have from our discussion was your job as the CEO is to not put tactical content in front of your board because if you do, then they’re going to dig into that content and think tactically. You need to put strategic content in front of your board and look at those longer term more strategic activities. Does that inform them anything in regard to succession planning, as far as how to have that discussion with your board? A CEO reached out to me in advance of this podcast and said he had some frustrations in the movement, not in his credit union, but in the movement, seeing some boards sort of go off in a wild, different direction when the CEO had prepared an internal candidate for many years, had a well-established internal candidate. But then when the CEO actually announced, the board sort of had these side candidates or just went outside immediately, and his concern was how to prevent that and ensure that continuity. 

Deedee Myers (14:34)

That’s sad when that happens. Oftentimes, it goes back to I don’t know what Peter shared with you, but we have this work on six types of boards. So that might be another session here, but one of them is independent, where the board does their thing. The CEO does their thing. But they’re not cross-pollinating. They’re not in a cross-collaborative kind of generative conversation. So therefore we don’t know if I’m the CEO, I don’t know if the board is doing something on succession planning. So the board is responsible for CEO succession planning. My thought is, why not start five years out, start the conversation in the boardroom—five years from now, what kind of CEO would we need, then four years, three years. So there’s different activities the board can do five years, four years, three years out, Doug; they’re very strategically thinking and being guided by maybe a consultant on how to strategically think about it. And they should inform the board, when the board is looking at CEO competencies from three, four, or five years out, that helps the CEO develop the internal candidates. So the internal candidates understand what the board’s looking for. So when there’s not that conversation, it is a big breakdown. And it does impact retention of good candidates, internal candidates, I should say. There’s that whole piece that needs to happen in advance, so the CEO knows how to build people and then an open dialogue. So two years from now, the board should have an update on the internal candidates, so they know how the internal candidates are being developed. So there’s a readiness report that is great for them to see every quarter. When you get closer to a year, that’s a monthly conversation. But what I’m also seeing is a year before the CEO is retiring, the board should pull the trigger and do an external search if they’re not going to go internal. They should know that. So, this piece here, Doug, is I think there’s some awesome internal candidates and we’re willing to certify them. We’ve done that with clients, we work with them starting two years out and at about a year we go, you got people, you don’t have to do an external search. So then we can continue to develop the internals. However, at that one-year mark boards may still go, okay, we got good people. Let’s make it more competitive and do an external search. I think the board needs to know if they’ve got ready-now candidates.

Doug English (17:01)

That is really interesting. So let’s go deeper into there. So the idea is that I assume you’re engaging a consultant to help dig into the psychological qualifications and skill qualifications of your internal candidates to see if they have a strong aptitude for the CEO role. So talk to me about how that works. I think you said you want to do that at least two years out. And then that would give you the data to determine how strongly to lean inside versus outside, right? Can you tell me how that works? 

Deedee Myers (17:39)

Absolutely. Two years is a minimum that I hope to start on. I have a client who’s done it eight years in advance, and now we’re three years out. So the pace is quickening. What we’ve developed is a rubric. It’s like a 20-page booklet that we use as a guide conversation. And I’m just sharing this as a way of thinking. So we start with that strategic overview, what’s the strategic context of the CEO role in the future? That two-year mark. How do we see our credit union two years out? How are we looking at the industry? What is our strategic trajectory? So we create a common language, Doug, about how to talk about that CEO role in the future. Which is really cool, because it gets his net strategic format. Then we also look at what’s the governance framework? You know, once you have a new CEO, is that board going to lean in more, put their fingers in more to the organization? Are they going to still lean out and be strategic? So if they’re going to do an external search, external candidates are going to want to know, what’s the governance framework when I come in? You know, so that’s another conversation. So we also do a 360 for the CEO. What are the internal populations going to say about the next CEO? What did they think is needed? What are they saying about what kind of leadership is needed? And then externally as well, so that’s a good piece of work. Then we go into soft skills, like you talked about, go into emotional intelligence that’s required, values, drivers, motivating factors, it’s a whole way you can assess all that. The last thing, what are lessons we look at, Doug, is what’s going to be on the ideal resume. Because once you’ve set the leadership context there, and you’ve looked at what are the competencies and characteristics that are needed to enter to be able to pivot the organization. And I’m going to give homage here to Ram Charan. That’s his piece of work I borrowed from; he’s awesome in that. We’ve got to move away from the linear checklist of what we want in a CEO. We need to look at competencies and characteristics that interweave and interface in certain kinds of situations. So then we get to the resume, like, oh, one of the biggest conversations there, Doug, is, wow, what kind of degree do we need? Do we need a degree? Do we need a masters? That’s a huge conversation, especially in the context of DEIB these days. There’s a whole school of thought on if we go and say we have to have a degree. What does that do for us, limiting our population of qualified candidates and access to education for all populations? So there’s that piece. Do we want somebody that’s cross-functional in leadership, like we’ve talked about, or come up through a certain functional domain of expertise? And then lastly, our favorite part is values—what are the values we want the CEO to embody from day one, so they can make all this great stuff happen?

Doug English (20:40) 

That is awesome. So you’re really clearly defining the end point as far as the skills and the target for the role as it’s going to stand when the transition happens. And then you’re pulling it back into what do we want to see on the person’s resume to make them ready for the place we’re going to be when the transition happens. That’s what I heard you say, so then, the next question is do you give an evaluation of the internal candidate’s ability to get there? 

Deedee Myers (21:14)

Absolutely. Absolutely. We take this document and it is a conversation that the board’s agreed on, this is how we all want to look. And they’ve aligned. And that’s a lot of work, which is great. We want alignment. So then we actually go and look at the internal candidate and see how they line up with the strategic context piece. How would they add that value? Do they have the education? We do the assessments. We interview quite a bit. So yeah, we’ll write up a CEO readiness report. And then the nice thing about it, Doug, is if we start early as a board, the end of the report will say, here’s where you line up really well, candidate. And these are the two things you need to focus on for the next two years. So they got a place to go.

Doug English (21:58)

Have you been in situations where the information you give to the board is that you might need to look external? When does that happen? When is it that there’s a closable gap between the skills this person needs to have and the options your C-suite currently provides? 

Deedee Myers (22:16)

Absolutely. Well, in our CEO readiness report, right up front, we’ll do an executive summary report for the board and say, hey board, and we do a verbal report out too, because we want to have that conversation, we’ll say, here’s where your candidates line up. And this is the risk you have if you put this person in the role. And if you put this person in the role, you have to be comfortable and manage that risk, and not just let that person go on their own. We’re really clearly upfront stating, here’s where it works. And here’s where the risk is.

Doug English (22:47)

I assume you would use a variety of testing to get the psychology of the candidates, both internal and external. So you’d have the same comparisons. Is that true? 

Deedee Myers (22:59)

Absolutely. We do the same testing internally and externally. We have to. So absolutely, we have a number of instruments we use. Some have just worked so well and they’re easy to understand. And we draw from two or three different organizations that put out testing, Doug, to see, are they saying the same thing? You know, so if they’re all saying the same thing, there’s a high validity index here.

Doug English (23:27)

Yeah, we do the same thing when we hire our employees, we use some of these tests. And you can tell with the consistency of the answers whether or not they’re doing a great job thinking about the answer or just getting the answer. 

Deedee Myers (23:43)

Yeah, we get flags, we get red flags, or we get inconsistency index scores, things like that help us. We’ll share that with the candidate. So before we present a candidate, we go through their assessments with them and say, here’s what they’re saying. What do you think? So we do a feedback session as well. And I think it’s important to note that all of our principal recruiters are also certified in all these instruments; we don’t need to use external consultants. So we’re all certified. That’s part of our foundation here. It’s important for us that the candidate validates the assessment reports before they’re used in a presentation of how they’re ready.

Doug English (24:26)

Is there data that you’ve seen about the effectiveness? Of course, effectiveness can be measured in a variety of different ways. But I’m just wondering if there’s any data about internal versus external candidates, and the only word I can think of is effectiveness of the organization going forward in either one of those scenarios. Is there any data you’ve seen on that? 

Deedee Myers (24:50)

We have tons of data, Doug, tons. So let’s go with internals first. So there’s internals where there’s been a lot of development, a lot of personal and professional development of people. These candidates score on the same level with the external candidates. Then there’s internal candidates in an organization where there’s not been that development; they score below average. So we do have a threshold of where we think we need to be on emotional intelligence and personal mastery that we use as a baseline. External candidates that have been in organizations that have developed people will score higher on these assessments. So that’s one piece of information. Yes, we have that data. And then what we also want to look at, Doug, is go back to how this person really added value. So I can have a high emotional intelligence quotient yet maybe I don’t add value because I’m at a certain place in my life, I just want to do my job and go on. So we don’t want to just take the test scores, we can’t hire just on that—it’s a piece of information. Then we want to go back and see what’s on the resume. But even more, in several interviews with the candidates to keep peeling back that layer, what they’ve done, how has it impacted? And what mistakes have they learned from? So that’s another whole piece of the process.

Doug English (26:21)

Interesting. So would I be correct to infer then, if the board has been relatively passive, I know that’s fuzzy as heck, but about succession planning and development. If something comes up, right, a healthcare situation comes up and suddenly your CEO is going to leave within a relatively short period of time, then the preparation isn’t there. The planning, the years of preparing for the leadership roles, if it’s not there generally, then an external candidate is going to be more successful in that situation. 

Deedee Myers (27:04)

Nice summary. Yep. Absolutely. Absolutely. So what we’ve developed is that might put a context here is there’s five levels or types of conversations in a boardroom. So the way you just described that passive board are levels one and two, we’re a fiduciary sound board and we do oversight. What we’re looking for is more boards to go to the higher levels, and be strategic thinkers and sense makers, futuristic thinking—those are levels four and five. The lower level boards are going to go about the search a bit differently than the boards that are used to being in those higher-level conversations, Doug. It’s our job as consultants to help the boards who are really good at fiduciary oversight; all five levels of conversation are needed. I’m not putting emphasis on one or the other, all needed. But it’s our job as consultants to help those fiduciary and strong oversight boards to start to look differently at the CEO role and start to think of themselves as themselves as board members, as leaders, not just overseers.

Doug English (28:15)

Awesome content, Deedee. Thank you so much. As we wrap things up here, any final comments for our listeners, for the leaders of the credit union movement, about board readiness in the process of getting ready to be a credit union leader?

Deedee Myers (28:30)

The sooner we start the conversation, Doug, the more options we have as we go through this journey and learning together. So start early, even though you don’t think you need a CEO for several years. It’s really great to have a three-hour session, maybe every year or every other year, since the board’s role in CEO succession is to start early. I just love to continue the conversation every year; it gets richer and richer in the boardroom. So I really appreciate the time today. Thank you.


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