Excellence in CEO onboarding

Excellence in CEO onboarding

Introducing a new CEO to the CU's processes, operations, and culture sets the stage for success.

January 18, 2017

When Sandi Carangi became CEO at $75 million asset Mercer County Community Federal Credit Union in 2015, she worked side-by-side with the outgoing CEO for the first month, and had access to him via phone for an additional two months.

This initial day-to-day interaction with the outgoing leader was invaluable, she says. When the former CEO left the confines of the Hermitage, Pa., credit union, Carangi was ready to “take the wheel” and ease into her new duties but could still reach out to him if questions surfaced.

“It was a three-month process,” Carangi says. “He helped with the day-to-day operations and then let me run with it. But being here in the office that whole first month was probably the most important part of the process.”

Not all onboarding programs are so well thoughtout. Some outgoing CEOs spend months or weeks serving as a sounding board for their replacements. But in other cases, new leaders often must navigate the onboarding process alone.

No matter what method credit unions ultimately use, credit union boards that don’t already have an onboarding process in place for incoming CEOs should develop one. It’s one way to ensure a smooth transition, especially as 10% of credit union CEOs plan to retire within the next two years, according to CUNA’s 2016-2017 Staff Salary Report.

While each credit union has its own approach, the most important component is setting and communicating both short- and long-term goals and expectations, says Charles Shanley, executive vice president at John M. Floyd & Associates, a CUNA Strategic Services alliance provider.

This includes walking the new CEO through the basics, “such as where the breakroom is, working the phone system, and making the proper introductions,” says Shanley, who oversees the company’s recruitment services. “That’s usually the board chair’s responsibility.”

Start with introducing the new leader to everyone at the credit union, including employees who report directly to the CEO and community partners. This might be easier for individuals who were promoted from within the credit union, but for those coming from outside the credit union, it’s a critical step.

Shanley says these initial actions usually cover the first 90 days, although every new CEO and credit union is different.

Once relationships take shape, the new leader can move on to more strategic, long-term goals, including learning day-to-day operations and the credit union’s culture, and developing processes and policies to improve the credit union’s performance.

Meeting with the board and setting clear expectations is the most important part of any CEO onboarding process, Shanley says. After setting those goals, the board should continue to monitor the CEO’s progress toward achieving those goals.

If the CEO isn’t clear on expectations and the board doesn’t provide feedback, the new leader will be flying blind. Onboarding, Shanley says, requires “consistent feedback, clear expectations, and monitoring.

“You can’t just turn the keys over and let them go,” he says. “That would be disastrous.”

Onboarding best practices

While there’s no universal formula for CEO onboarding, some practices have proven effective, such as:

Mentoring. When a CEO announces plans to retire, some credit unions create a succession plan that involves having the incoming CEO shadow or be mentored by the outgoing leader.

For Amey Sgrignoli, the onboarding process at $450 million asset Belco Community Credit Union was a multiyear process. The board at the Harrisburg, Pa., credit union decided to pursue an internal candidate for the top spot two years before its CEO and executive vice president retired.

The board formed a committee to identify potential prospects for the positions and created a selection process that included interviews, performance reviews, feedback, internal and external training, and job shadowing.

Sgrignoli held the “interim CEO” tag before being named CEO in January 2014. She then moved into a more formal transition process, which involved job shadowing with the outgoing CEO to cover everything from operational tasks to strategic planning.

“Within the first six months, I was responsible for full oversight of the credit union, and the retiring CEO was in an adviser/consultant role,” Sgrignoli says. “He was very much behind the scenes after the first few months. So when he did retire, I was already up and running.”

Consulting. At some credit unions it’s not possible for outgoing CEOs to provide guidance to their replacements. If these credit unions use an executive search firm to find a replacement, the company will often provide guidance for a few months once the new individual begins the role.

At $330 million asset Infinity Federal Credit Union in Portland, Maine, the board worked with an executive recruiting firm to define what a “star CEO” would be, and developed a list of expectations and goals for its new leader. When Elizabeth Hayes took over as the credit union’s CEO in 2014, she worked with the search firm for a few months as part of the onboarding process.

Self-directing. When no formal onboarding program exists, new CEOs must create their own plans.

Scott Wilson, president/CEO of $518 million asset SeaComm Federal Credit Union in Massena, N.Y., didn’t have the option of shadowing the outgoing CEO when he took on the role in 2007. Instead, Wilson tailored his onboarding process by focusing on a set of self-created goals, including meeting with senior level managers, understanding each area of the credit union, and learning from the board what it wanted him to accomplish.

“The benefit to immersing yourself in the first 100 days is that it will enable you as a new CEO to really have a true picture and understanding of what needs to be done,” Wilson says.

Mike Lee also didn’t have a formal onboarding program when he became CEO of $220 million asset KCT Credit Union, Elgin, Ill., in 2013.

For the first two weeks, Lee’s goal was to find out as much information about the credit union as he could. He set out to examine the credit union’s history, determine what worked and what didn’t, gauge employees’ morale, and review the credit union’s accomplishments and shortcomings.

“That became my whole onboarding process,” Lee says.

Ongoing lessons

Important components of a successful onboarding program include:

  • Learning the daily operations;
  • Meeting and forming relationships with senior leaders, employees, and community partners; and
  • Starting a road map to meet strategic goals.

But CEOs say there are other important ideas to take away from the process. Leaders often don’t fully realize these ideas until they complete their onboarding process and immerse themselves in their new job of leading the credit union.

First, it’s vital to form and maintain a healthy relationship with the board. These individuals—the CEO’s boss—play a crucial role in making decisions that impact the credit union and how it functions. The board also plays a role in the CEO’s success—or failure.

“You just went from having one boss to having many bosses,” Carangi says. “That’s a big change, and you don’t realize the significance of it until it happens.”

While the CEO title comes with a sense of power and responsibility, it also brings with it a “sense of aloneness,” Hayes says. This is a feeling new CEOs often underestimate.

The CEO is in a position where others come to him or her for guidance or answers. In previous positions, there was always a higher-ranked leader that a person could go to for advice.

“You must work through issues on your own, and that can be uncomfortable,” Hayes says. “Unless you have a network or mentor, you’re really on your own. You don’t have anybody to bounce ideas off of, and you’re walking into a brand new culture.”

Also, CEOs must understand that change will not occur overnight.

When assuming the leadership role, CEOs have ideas about how to tweak policies, procedures, products, and services to ensure the credit union functions more efficiently and better serves its members.

They also know it’s important to be seen as a decisive leader so everyone knows where the credit union is going, Hayes says.

But be cautious in rolling out too many changes too quickly, Wilson advises. Instead, study the credit union and collect the necessary data to make sure those changes—which might look good on paper—are actually the best moves for the credit union.

“Don’t make any impulsive decisions,” Wilson says. “Take time to evaluate the organization by gathering as much information as possible. That will give you enough data to make the key, critical decisions for the long-term future.”

Don't forget these three onboarding features

Credit unions often overlook these three helpful features of CEO onboarding programs:

1. Lists. Important details can be lost in the shuffle during the onboarding process—such as expiration dates and other milestones for contracts with outside vendors (i.e., health insurance, bond coverage), and contacts at those companies.

“During those first three months, I had no idea what the dates were until vendors called or emailed,” says Sandi Carangi, CEO at Mercer County Community Federal Credit Union in Hermitage, Pa. “I would have loved a cheat sheet.”

2. Team building. It’s essential for the new CEO to build rapport and relationships with staff to ensure a smooth transition.

“Team building is critical to success when the outgoing CEO is gone,” says Amey Sgrignoli, CEO at Belco Community Credit Union in Harrisburg, Pa.

3. Priorities. Having a list of key areas or items to focus on, such as the importance of building a strong relationship with the board, can ease the transition to the new role, says Scott Wilson, president/CEO of SeaComm Federal Credit Union in Massena, N.Y. 

►This article appears in the January issue of Credit Union Magazine. To read more exclusive content, subscribers can visit our digital edition and access our app. Not a subscriber? Sign up today.