How To Approach The CEO Search

Posted August 10, 2015 on CUInsight

BY MARC RAPPORT

Whether a credit union’s board of directors is looking for a turnaround or to stay the course will determine the best qualities of a candidate. A plethora a variables will determine the qualities a board wants in a credit union’s highest-ranking employee.

A credit union’s board of directors is charged with many things, perhaps none more important than hiring and replacing its president and chief executive officer. Should the board look at internal candidates? Should it look outside the credit union’s walls? Or both? Should the board approach the search differently if it wants to turn things around as opposed to staying the course?

“There are thousands of credit unions with distinct memberships, boards, and cultures,” says Deedee Myers, CEO of the Phoenix, AZ-based executive recruitment firm DDJ Myers Ltd. (DDM). “Each needs to determine its own best way to proceed.”

Here, Deedee and DDJ Myers vice president Peter Myers offer advice for boards sizing up the field and preparing to replace their quarterback.

DDM: Turnaround situations could mean several things, including a financial turnaround, a cultural turnaround, or a mixture of both. Financial turnarounds require diverse in-depth leadership competencies that differ from those of growth-oriented CEOs. The competencies of discernment, action, and engagement are primary for turnaround situations.What qualities should a board look for in a CEO when the credit union doesn’t want to merge but does want to go in a new direction?

What do these competencies mean in real life?

DDM: Discernment allows the executive to zero in on specific financial and cultural variables — such as values, beliefs, and practices — that need support or divesting.

Action is fundamental to producing effective results. Imagine a futuristic and strategy-oriented executive who is equipped to thrive in the theoretical realm landing a position that requires 60 hours a week of tedious yet necessary tasks. It’s not a recipe for success.

The third element is articulating and maintaining engagement. Engagement is multifaceted and includes conditions of success that will be accounted for. Turnaround CEOs need to be able to articulate standards for success, solicit engagement, and continually develop processes for cultivating people.

What qualities should a credit union board steer away from in that scenario?

DDM: The focus should be on what qualities should receive attention rather than what qualities to steer away from. Research proves that those who focus on strengths are generally more successful than those who focus on weaknesses. The “move-toward” concept generates more innovation, engagement, and cross-functional collaboration.

The board needs to be able to access a strong, credible network to reach passive candidates who might not consider moving until you present an outstanding opportunity.

Any advice for assessing internal candidates?

DDM: A primary element to consider when dealing with internal candidates is what they have done to effect change and develop under the former or current leader. If the prior CEO managed with a heavy hand, did the internal candidate cease all efforts to effect change? Or did the candidate muscle through the authoritarian CEO and do what needed to be done?

If the latter occurred, does the candidate have the grit to respectfully and professionally outline their position in full, assess the options, and recommend a course of action to the board? If the former occurred, the board should look at how the leadership style of the resigning CEO might have restricted development.