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This is bonus coverage from “Passing the Baton” from the September 2016 issue of Credit Union Management magazine.
The process behind both the hiring of its successor CEO and the transition currently under way at DuPont Community Credit Union reflects the organization’s longstanding commitment to “organic” internal executive development, suggests President/CEO Gerald Hershey.
Hershey will retire from the $1.1 billion Waynesboro, Va., credit union serving 80,000 members in March 2017, ending 17 years as its chief executive. The board announced in June that EVP/Chief Operations Officer Steve Elkins will succeed Hershey, and the intervening months have involved a steady transfer of leadership responsibilities.
Hershey shared his intentions to retire with the board—which belongs to the Center for Credit Union Board Excellence—in October 2015 and formally announced his retirement plans in March 2016. Working with a consultant from C Myers, Phoenix, the board developed a hiring process through which Elkins was identified as the best candidate for the job, without an external search.
“At the end of the day, the board structured a rigorous process, and the incumbent earned the position on his own merit and not simply as a recommendation from the outgoing CEO,” Hershey says. “If the board had seen the need for a change in direction, they would have gone outside to find a change agent. But they’ve seen results from our internal, organic executive development.”
Elkins concurs: “The board engaged in a very deliberate process that involved a lengthy questionnaire and formal interviews.”
In the first stages of the transition period after Elkins’s appointment as successor, the credit union changed its approach to board meetings. Whereas the entire nine-member executive team had previously attended board meetings, the sessions through the summer and early fall were reserved for Hershey and Elkins to create a comfortable environment “for the CEO successor and the board to get to know each other and learn how to give feedback,” Hershey explains.
Elkins will officially become CEO on Jan. 1. In October, he will lead the strategic planning session and will be taking the CEO’s chair at board meetings beginning in the fall. Hershey will be available for consultations with his successor from January through his official retirement in March.
Throughout the summer, Hershey stepped back increasingly from decision making and leadership with the executive team and board. “My role has become asking the big questions, like ‘Did you consider this?’ rather than ‘I think we should do this,’” he notes. “We all recognize there is that history of who’s who in the room that could get in the way of this transition, but we acknowledge any occasional awkwardness as something we need to work through.”
DuPont Community CU has been committed to the internal development of executive talent, and that commitment has paid off in terms of steady growth and successful execution of strategic objectives, Hershey says. The board of directors sees those results both in the credit union’s financial performance and in regular contact with the executive team at board meetings and annual strategic planning sessions.
Given its location in rural Virginia two hours from a major airport, recruiting is not always easy for DuPont Community CU. “When we do a good job growing our talent of executives who ‘get’ this environment and community, it adds value to our understanding of how to better serve our members,” Hershey notes.
In January, the executive team underwent “some significant structural changes,” including the assignment of C-suite titles (CFO, CLO, CTO, etc.) in place of vice president designations. Among Elkins’s responsibilities, once he assumes the role of CEO, will be to ensure that those executives continue to receive the leadership development they need and to round out the talent on the senior leadership team.
“We need to continue to identify strong internal candidates for leadership development, a practice that offers continuity, stability, and cultural integrity where managers can transition to senior manager and executive titles,” Elkins says. “That’s our objective.”
Since Elkins joined DuPont Community CU in 2003, the credit union has almost tripled in asset size. During those 13 years, he held vice president and senior vice president roles in finance, retail, lending, commercial services, marketing and operations. Many on the credit union’s executive team “have grown up with this organization,” he notes. “New complexities come into play as a credit union expands its operations, and we need to evolve as leaders. It takes different kinds of thinking and leadership to continue that growth and progress.”
To keep that progress going, Elkins acknowledges that it will now be his job to lead DuPont Community CU in enhancing its strengths, pursuing opportunities, and “identifying candidates with the necessary skills and interests and help them grow with the organization” by networking with colleagues at other high-performing credit unions and undergoing formal leadership development.
Karen Bankston is a long-time contributor to Credit Union Management and writes about credit unions, membership growth, marketing, operations and technology. She is the proprietor of Precision Prose, Portland, Ore.
