Get the Most Out of Your Strategic and Succession Planning

It’s nearing the end of the year, and that means one thing: It’s strategic planning season! While your credit union may have an idea of what could be coming in 2025, how much thought has your credit union put into strategic succession planning? Do you have one? What positions is it necessary for?

The Credit Union Connection Co-Founder/CEO Sarah Snell Cooke sat down with Michael Wolsten of Michael Wolsten Consulting to discuss strategic planning, succession planning (including the NCUA’s new rule) and executive coaching for 2025. Michael adds it’s equally important to pay homage to the past while also moving forward with credit unions’ planning..

Read the full transcript:

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Sarah Cooke 00:01

Hello and welcome everyone to this edition of The Credit Union Connection. I am your host, Sarah Snell Cooke, and I am here today with Michael Wolston of Michael Wolston Consulting. Welcome.

Michael Wolsten 00:12
Thank you. Thank you for having me.

Sarah Cooke 00:13
Absolutely. So, tell us a little bit about yourself and your firm. Yeah.

Michael Wolsten 00:17

Gosh, you know, I love helping support credit unions all across the country. And what we do is focus on strategic planning and making sure that you have the right people and the right culture and really the right service in place, which is just so, so critical. I got to work for one of the largest credit unions in the country, at Idaho Central Credit Union for 14 years. So I got to see kind of, all the patterns, kind of what you know really worked, and some of the things that didn't along the way. And so I just love having that passion and being able to serve credit unions, who I believe missionally, serve just a huge portion for what our country needs, which is being member owned. There's not a lot of entities that are like that, right? So that's a little bit of what I get to do. And I just, I love doing it every day.

Sarah Cooke 00:57

Yeah. Yeah. I have to say, at I have to say at, I think a lot of us consultants started out seeing what we liked and didn't like and decided to carry it off to other, to all the companies. So I'm going to, I know you cover a wide swath of services at your consulting firm. The first thing I want to touch on, though, since we're in that season, is strategic planning. And so what are, what are a couple of things, and I know that every credit union is different, yada yada, but what are a couple things that every credit union needs in their strategic plan for 2025 and beyond? Oh,

Michael Wolsten 01:35

absolutely. Well, one of the big ones is probably succession planning as part of strategic planning. I know there's been a lot of focus on that. I know you guys with CU Connection have been talking about that quite a bit as well, with some of the changes that are coming for federal credit unions. But really, especially for those small, medium sized credit unions, it's so critical, because anytime you have a sudden change, or you have a departure, you have something in the C suite, and really, even for the board, it can create some big, big changes. And I've seen that firsthand with a lot of the credit unions that I've worked with, is that they're saying, hey, you know, we want to be prepared, but we don't really have some of these next level pieces that we need if, unfortunately, something big happens, or if we lose some key members. And so, you know, that's really, I think a critical piece. I always say looking at the past, present and future is so important. Sometimes credit unions are so forward focused that they don't take us a moment to look backwards and say, Well, what are some of the things that we want to do more of? What are some of the things that worked really well over the last three years that we don't want to lose and we want to make sure are built into some of our planning? I think that's really critical. And then I think, you know, probably the biggest one is, I call it the big five. This is what I focus on, specifically with planning. And everybody does a little bit differently. Just even having a plan is really helpful. But how do you have a really efficient plan and one that people want to get behind? And what I found is, if we're focusing on culture, we're focusing on service, we're focusing on growth and kind of the sales piece, we're focusing on the financials, which is obviously always really important, but those first three really feed into to the financials, right? And so we have to make sure that that's consistent. And then what's the systems, what's the technology, what's some of those bigger expenditures that we're going to focus on? And then how do we do that in a real, responsible way over the next three years and making sure that everybody gets that buy in. I really love making sure that everybody's heard, so I survey the C suite. I survey the board. I survey, a lot of the time, frontline team members. What do they see? What do they want to see more of what do they see as some of the strengths? And how can we grow? Because once we kind of do that collectively for everyone, then when once we present that plan, there's a lot more buy in, because everybody already feels like they're part of that process. So I think those are some really critical areas for sure. Yeah,

Sarah Cooke 03:50

absolutely. And that's also part of the culture is, you know, bottom up, top down. And so when you, I love what you were talking about, with it all being aligned because one of the things, I mean, at least in my area of, of the credit union business, is one of the, one of the first things you know, credit unions often will say they want to grow, or they want to reach a certain market, but then they cut back their marketing the minute anything gets a little tight. And I'm sure it's not the only area, but yeah, like, how do you ensure that the budget is aligned with what your strategic plans are for? Yeah,

Michael Wolsten 04:28

absolutely. Yeah. Great. Great question. So a lot of times what we'll do is we'll bake in some of those specific action steps and some of those programs, some of the pieces that we're wanting to accomplish in those big five areas into the budget ahead of time, because you have to do some of the pre work and say, Hey, we really want to roll out this new initiative, or we want to focus on growth. Well, what does that growth plan actually look like? What does the marketing look like? And I think to your point, if you don't budget it in for next year and have a vision, the money's not going to be there. You can have all the best of intentions in the world, but that's not going to be in place. And so it's really important to allocate those dollars ahead of time. It's really important to know who the action owner is, so not just the CEO, which sometimes happens, where everything kind of gets plopped onto the CEO, who are some of the key owners that can move some of these initiatives forward. And then what are the milestones along the way? What does success actually look like? Right? Is it our target towards how many new members we have? Is it certain activities, you know? Is it, is it a certain revenue goal, like, like, you know, our goal for net income? What? What is that? And so if we don't have some of those key pieces in place, it's really challenging to be able to look ahead to the next year and say, well, here's, here's what success was, right? So I think that's really important. Yeah, and,

Sarah Cooke 05:43

you know, I think it's very important. What you said also there is the outcome is not necessarily 18 different email campaigns throughout the year. The outcome is, what is the revenue generated by those, or what are the number of loans generated? Or however you're measuring that success, and it certainly isn't putting out a certain number of campaigns.

Michael Wolsten 06:03

Right? Yeah, absolutely.

Sarah Cooke 06:05

And so how do you go about doing strategic planning without putting too much of yourself into it? I feel like I might have a little too much influence on things if I were to do it. What? How do you do that?

Michael Wolsten 06:16

Yeah, yeah, absolutely no. I think that's great. So I do two pieces that are a little different. Not everybody does it this way. And again, there's lots of different ways to do it. I won't buy in. I want a plan that everybody gets so excited about, because, number one, they've contributed to it, and we've asked them some of those deeper questions. Part of it's SWOT Analysis Questions. Part of it's what they want to see. Part of it's maybe, what are some, kind of call them, stub toes? What are some of the areas that we really need to improve for our team members or for the credit union? And if we can get that up front first, then we have a lot of great data to move forward in. And then it's really we're moving the credit union forward from some of the bigger stakeholders. And then the second one is, I do a pulse survey, and so I survey the entire team. A lot of times. I'll survey different segment groups, and I'll say, hey, from the board's perspective, what are some of the pieces that you feel like, you know, are really beneficial for the credit union? Or I'll do a pulse survey for the team, and I'll ask them questions like, do they feel really valued in the work that they're doing? Do they feel like they have, you know, support through their career? Do they feel like their managers, you know, you know, producing some really effective one on one time, because culture specifically, which I believe is the biggest driver for credit union success, you know, credit unions are very mission driven. And if you can get everybody behind your mission and your goal, holy moly, like, you know, you don't have to, you know, go as crazy with some of the other areas, because you have everybody moving forward together. And so what I want to know is what's sort of the ground truth and how bought in our people to begin with. Because if we can know that, and we can know where we want to go, now, we have a lot more ammunition when we're putting the plan together. And it's not just a well, we kind of put, we've got to put this plan together, right? I hate, I don't know about you, but I hate attending, I'm on some boards as well, not credit union boards, but other nonprofit boards. And there's nothing worse than sitting in a meeting all day and putting a plan together and then it being like, Well, that wasn't really inspiring, and that wasn't really something that people are going to move forward with, and that this is probably going to collect dust, you know, and just sit on some shelf. It needs to be kind of like a living, breathing action plan. Everyone in the organization and everyone can easily see, oh, this is my part in that. Oh, this is what I'm going to own. Oh, this is where we're going. Oh, this is why that's important. And if we can do that, then I think you know that can really be transformative, and has been for actually, quite a few of the clients that I've gotten to work with.

Sarah Cooke 08:38

That's very important for the CEO and others in the C suite to emphasize the importance of actually putting together, you know, the tactics to fulfill the strategic objective, very important for that follow through, yeah? And you definitely don't want to sitting there collecting dust. And I think I'm going to steal that term stubbed toes.

Michael Wolsten 08:58

Yeah, they're the worst, right? And they're not going to kill you, right? That's not like, Oh man, I gotta go. Well, I don't know, maybe if you break it, so maybe you got to go to the hospital. But for the most part, they're just going to be really annoying, but it's, it's really kind of painful, and every organization has them. I don't know a team who doesn't have a stubbed toe, right? It might be operationally, it might be with culture, it might be with, Hey, how are we really growing? And that's growth is such a big piece, right, for so many credit unions, and wanting to grow and and needing to scale and grow, otherwise there might be, well, we've got to merge with someone else, or, gosh, you know, we can't keep up with some of the regulatory burdens, or whatever it might be. But there's a certain way to do that that's not just a continual shot in the arm of, you know, spending money. And like you mentioned, the 50 email campaigns. Email campaigns can be amazing, right? And marketing is amazing, and there's so many things you can do, and that should be supplemented with an amazing place for people to walk into, right, once they open up the email, once they go into that place, hey, it needs to be a culture where people are staying right, and you're not having a lot of turnover and new faces, right? Needs to be a culture where, man, people are really excited about offering those products and services, right? And they're the ambassadors. They're wearing the hat in the t shirt, right? And they're, they're kind of the raving fans. If you can have those elements all together through your plan. And that's, that's where the real growth happens, yeah,

Sarah Cooke 10:18

when you, when you take care of your people, for sure, it sounds trite, but definitely the money follows. I feel like, speaking of that you, you started to talk a little bit about succession planning and leadership development, kind of how important that is in the role and having a culture, obviously, of education and moving forward and upward, and, you know, supporting people so, so many credit unions are emerging out of existence right now, and one of the larger reasons is because they can't find a leader, but they did nothing to find a leader, whether it's internal or outside. So how do you go about like some really solid succession planning to ensure you have somebody either to move upward or are out, finding somebody who's going to maybe be that next person? Absolutely.

Michael Wolsten 11:03

Yeah, two clients that I can think of that come to mind. One's a credit union in New York, and one's a credit union in Detroit, and both of them have longer standing CEOs. Both of them are nearing retirement, and both of them said, we don't really have a plan, right? We don't even know exactly who that person's going to be internally, and, and they knew that they would love to have someone internal, because you can have external hires, and a lot of times that can work out great, and sometimes it's not the right fit, right? And they really both had a desire for it to be more homegrown. And so they engaged with us about a year and a half ago, and we built out the plan. We said, Hey, worst case scenario, here's where things are at. We built out the policy for succession planning. We built out kind of the succession board. Who's ready now, who could be ready down the road, those types of things. But when we did some of those exercises, they're like, we don't have anybody ready now. We need some help with that. And that's where I love coming and supplementing the, you know, the executive coaching piece to say, Hey, who are those people who are maybe on the C suite deck or close to that that you really want to develop over the next, you know, 12 to 18 months, and really help them be ready for that role. How do we build out some development plans for them? Because I found it's pretty common, unfortunately, a lot of times, for the C suite to focus on development plans for mid-level managers, maybe even frontline folks, and kind of developing them up so they can grow in different areas. But for the C suite, sometimes that's lacking because they're just so busy and they don't really have a specific plan on here's the areas that I need to grow in to move forward in my career. I need to be stronger in in delegation. I need to be stronger in how I'm helping hold my teams accountable. I actually have a really hard time having difficult questions or difficult conversations with folks you know, and how I coach. And so sometimes there's just some of those gap areas, and if we can help support those folks who are next up, or that we've identified that the board has said, Gosh, it would be great if we could develop someone in house, then now we can actually grow from the inside out and be proactive in some of those areas, instead of like you mentioned, gosh, we had a change. Something happened, someone retired, and now we're looking and we don't really quite know exactly what we're looking for. And that can happen to all work with clients where, you know, maybe we haven't done that work, the development piece, proactively, but now, when we're in the CEO hunt stage, and we're looking ahead to succession planning. What does it look like, not only to fill that role, what kind of CEO do they want to have, but then, now that we've kind of gone through that exercise, who is the bench? Who do we want to develop, and what could that look like as we move forward?

Sarah Cooke 13:40

Anyway, I do want to get to executive coaching, because I think it's an interesting topic and, but I want to go back one, one smidge about the NCUA reg, recently provided a rule that requires succession planning. What are your thoughts on it?

Michael Wolsten 14:00

I think it's great. Now, you know, as someone who is very freedom loving, I sometimes I have a hard time with things being regulated, right? Or like the government's telling us that we have to do that. So that part's a little hard. At the same time, I believe the statistic is, you know, 30 to 40% of credit unions don't have any sort of strategic plan, right? They don't, the board hasn't aligned, and that's a really important function, and this is a really challenging place for CEOs to be put in, right? It's, hey, this is, this is maybe my legacy, or my timeline of what things can look like. I don't know exactly what the board wants for that next CEO, or even for some of the C suite positions, some of these key positions, how do I navigate that? And so I'm a big fan of number one having a plan. But a lot of times bringing in someone from the outside is so helpful, because then what you can do is again, see sort of that ground truth of where are things at for the C suite, bringing in some key assessments and knowing exactly where folks land in sort of their capabilities for some of those executive functions. What does the Board want for now, but then also, what do they want to see longer term? And I just, I think those conversations are so critical, because if they don't happen, you know, then a lot of times it can put a, you know, a credit union in place where they do need to merge and be absorbed. And so while I don't love it being forced, I do think it's number one, a great conversation. And I think it's great to be proactive on it, because it's not going away, right? And there will be continued changes that that need to come. And if you can be ahead of the game with that, gosh, it's such a such a better place to be.

Sarah Cooke 15:32
Yeah, I'm just so upset that the NCUA had to do something, yeah,

Michael Wolsten 15:37
you got like, oh my gosh, yeah.

Sarah Cooke 15:39

It really is so important, and you know, not only for having that succession plan, but also for all credit unions that you know, as we, as they merge away, there's other dangers that we're, we could face. And like I said, a lot of that is due to the lack of succession planning and boards as well. You need to, you know, make sure you can find enough board members. That's been a situation as well in some credit unions, which is interesting. I'm going to jump back forward to executive coaching. So talk about, for people who have never done it, what the goal of executive coaching is like, and what it might look like?

Michael Wolsten 16:25

Absolutely. Well, I firmly believe that people are put in leadership positions for a reason. Typically, you know, they're the right people at the right place at the right time, with some exceptions. I mean, there's some folks who maybe don't have the right fit, or, you know, maybe they're not in the right role, but for the most part, if they're leading and doing some things and having some good things happen in a credit union, they're there for a reason. And so my goal is to help equip those folks. And what I find a lot it just may be an analogy that helps, is a lot of times the CEO has been able to kind of climb to the summit, right and they've been able to do a lot of the work and lead, but they're kind of like, how do I, number one, transfer all of the knowledge? How do I transfer in a really systematic way what I've done to my team, and how do I help develop them so that they can climb to the top of the mountain as well, maybe not specifically as the CEO, but that they can really master their position? Yeah, and so there's some gap areas, and that's true for any leader. And so what I do is help say, hey, I can help, kind of be that guide. I can help along the way. I can help, if we're using the climbing analogy, right? Hey, I've got the equipment. I know how to scale the summit. I know how to make some of these things happen. Do you need some additional support along the way? And so what we do is we talk about some key coaching frameworks that really work consistently, time over time. And I kind of, kind of reference that a little bit with my time at Idaho Central. You know, we opened, gosh, I think I helped open 20 different locations over the course of those 14 years. So we expanded pretty quickly and organically. And what I learned was some of the really key things that always help and developed my own frameworks to say, gosh, you know, when we're looking to hire folks, when we're looking to coach people, when we're looking at our own development, when we're looking at difficult conversations, there's just certain things that always work, and there's some things that are again, stubbed toes, or some things that can really hold us back. And so what I like to say is, I help accelerate the process. I believe everybody's very capable as leaders and can grow, and everybody has amazing capacity. I just shrink the time, but I make it more intensive and focus and say, What could we get done over the next six months to help your executive team grow and help you achieve certain results? And so a lot of times, we'll focus our time on what results we want to see. Hey, we want to see culture grow in some of these areas, with those benchmarks I was sharing to some of these key areas. Hey, we want to see profitability, you know, or net income be able to grow in some of these key areas. We want to be able to see growth happen at a stronger place. Hey, we want to measure service to a higher level, right? Maybe measure, you know, it's being measured in some ways, but here's what we want to accomplish, because I always believe in tying coaching to a result. Coaching on itself is great. But if you don't have a benchmark that you're focusing on that has a real world, tangible, something you can kind of hold, then sometimes it can sort of feel like it's a luxury, or it's a well, you know that's, that's nice, if we get to do that. Well, if you're looking to grow in some key areas, you need to have some of those key metrics, and then obviously you want to have a real set plan on here's what we're focused on each month that's progressively helping us grow individually, but obviously as a team as well. Yeah.

Sarah Cooke 19:32

And one of the things I've heard from some of the executive recruiting teams is that, you know, the credit unions, as they get larger, the C suite gets so specific, and it's different verticals that they're seeing fewer and fewer people actually prepared for the CEO position, if that's what they want. Something that's really interesting, like you were saying, ensuring that the next level is ready to go, or, you know, I guess again, you can do it from outside, and it can be successful. But having, I feel like having the comfort of somebody internally, might be a better choice, because you do, I mean, what can you learn from somebody and in a couple interviews versus working with them for 10 years?

Michael Wolsten 20:15

Yeah, there's more there's, yeah, to your point, there's more risk. And again, there's been great, see, I can think of, you know, a handful of CEOs that I know who have moved into new roles in new organizations, right? And they made that jump over, and are doing great work, and so, but it is more risk, because you don't quite know, right? And so there, and the success rate of those CEOs moving over sometimes is lower than if someone's developed in house. And you can really focus on, hey, we know who they are. We know that they align with the culture. Because that's, that's probably one of the biggest pieces, right? Is, does somebody align with the culture? Can help drive it forward? Can help, you know, drive the credit union forward in a way that brings everybody along too. I've seen that happen as well. Sometimes is there's not that alignment. And so that can be really challenging, for sure.

Sarah Cooke 21:04

And so I allow all my guests a final thought. The end of our recording. We talked about a lot of, a lot of different things, strategic planning, succession planning, budgeting, leadership development, culture, executive coaching. So any of those rounded, final thought, Yeah, please.

Michael Wolsten 21:29

Oh, great, great question. Well, you know, for the credit union, obvious, you know, audience, and obviously, I have a big heart for credit unions specifically and, and just for the work that's being done. So first off, I wanted to just say thanks to everyone in the credit union industry. It's really rare. And I just feel very fortunate that we get to, you know, be helping members in different ways. Again, I don't work at a credit union at the moment, but I feel like I get to do that through proxy a bit with the clients that I get to serve. And so I just, you know, want to say thanks for that. And then, you know, parting note, I would just say there, because we're member owned and because there's such that responsibility, I think it's so important for credit union leaders to reinvest in yourselves. And you know, there's a lot of different ways to do that. It could be through executive coaching or planning or different elements, but even taking as little as like 30 minutes every week and saying, This is the time that I'm going to focus on being a better leader. This is the time I'm going to take to focus on learning something new. This is the time I'm going to take to be strategic. Because I find that that's one of the biggest areas and issues that CEOs can have, is slowing down enough, and the C suite specifically to, you know, slow down and help be creative in some of that thought and really reinvest and kind of re energize themselves, which helps them be even better leaders and helps them have even better outcomes. So that would be my final thought, no matter what you decide to do as a leader, having just even that little bit and building that over time can make such a difference for you and for your organization. Absolutely

Sarah Cooke 22:56
great thought. Great final thought. Thank you, Michael, so much. I appreciate you coming. Yeah.

Michael Wolsten 23:01
Thanks so much for having me. Appreciate it.