Unlocking Organizational Success: The Strategic Value of Executive Coaching on Succession Planning and Employee Engagement
Corlinda Wooden, President, Wooden Consulting
To effectively lead in today's complex business environment, the importance of executive coaching has never been more apparent. We have seen a growing demand for executive talent that integrates the expertise of financial services with the specialized skills of an organizational expert who is ingrained in your culture, necessitating a multi-faceted leader. This talent can be hard to come by, so it is critical to start grooming and growing your existing talent within your credit union. The decisions of today impact the success of tomorrow.
The Social Security Administration estimates that baby boomers are retiring at a staggering rate of approximately 10,000 per day. This trend, which began over a decade ago, continues to impact industries across the board, including credit unions. The aging population means a smaller talent pool available to fill management vacancies, heightening the need for effective succession planning.
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Industry research shows that many credit union CEOs are nearing retirement age. In fact, around 40% of credit union CEOs have reached retirement age within the past five years. This significant turnover underscores the urgency for credit unions to develop robust succession plans to ensure leadership continuity and organizational stability. As all baby boomers are expected to be at least 65 years old by 2030, the wave of retirements is set to continue, creating both challenges and opportunities for credit unions to cultivate the next generation of leaders. Without a robust succession plan, organizations risk disruption, loss of knowledge and a potential decline in performance.
Executive coaching plays a pivotal role in succession planning. It helps identify and develop high-potential employees who can be groomed for leadership roles. Through personalized coaching, these future leaders receive the guidance and support they need to enhance their skills, broaden their perspectives, and prepare for higher responsibilities. This proactive approach ensures the organization is never caught off guard when key positions become vacant while also helping to create and sustain a healthy culture where people are engaged and enjoy coming to work.
Engaged employees are more productive, motivated and committed to their work. Gallup's State of the Global Workplace report shows that only 20% of employees are engaged at work worldwide. Yet, engaged employees are 17% more productive and experience 21% higher profitability than their disengaged counterparts. Achieving high levels of engagement is challenging, especially in today’s hybrid work environment, where remote and in-office employees need to feel equally connected and valued. Executive coaching addresses this challenge by fostering a culture of support, growth, and recognition. When leaders are coached to develop strong interpersonal skills, empathy and effective communication strategies, they are better equipped to engage their teams. Coaching helps leaders understand their employees' unique needs and motivations, enabling them to create a more inclusive and motivating work environment.
Hand in Glove: Succession Planning & Employee Engagement
The relationship between succession planning and employee engagement is symbiotic. Effective succession planning can boost employee engagement by providing clear career paths and development opportunities. LinkedIn's 2021 Workplace Learning Report indicates that 94% of employees say they would stay at a company longer if it invested in their career development. When employees see that their organization is invested in their growth and is preparing them for future leadership roles, their engagement levels naturally increase. They feel valued and are motivated to contribute their best efforts.
High levels of employee engagement contribute to more effective succession planning. Engaged employees are likelier to participate in development programs, take on challenging projects, and exhibit the leadership qualities needed for future roles. They are also more likely to stay with the organization long-term, ensuring that the investment in their development yields returns. The Work Institute's 2020 Retention Report estimates that employee turnover costs approximately 33% of an employee's annual salary, making retention through engagement even more critical.
How Executive Coaching Bridges Succession Planning
Executive coaching serves as a bridge between succession planning and employee engagement. It provides a structured yet flexible approach to developing leaders who can drive both initiatives forward. Here are some important ways in which executive coaching can unlock success:
1. Personalized Development: Coaching provides tailored development plans that address each leader's specific needs and strengths. The International Coaching Federation (ICF) reports that 86% of companies recouped their investment in coaching and more, demonstrating the tangible return on investment from executive coaching. This personalized approach ensures that leaders are equipped with the skills and knowledge they need to succeed in their current roles and prepare for future challenges.
2. Building Leadership Capacity: Through coaching, leaders learn how to manage and inspire their teams effectively. Organizations with strong leadership development programs have 2.3 times higher employee engagement rates, according to Development Dimensions International (DDI). Leaders develop critical skills such as strategic thinking, emotional intelligence, and conflict resolution, which are essential for leading engaged and high-performing teams.
3. Creating a Culture of Continuous Improvement: Executive coaching promotes a mindset of continuous learning and improvement. Leaders committed to their own development are more likely to foster a similar culture within their teams, encouraging employees to seek growth opportunities and strive for excellence.
4. Enhancing Communication and Feedback: Coaching helps leaders refine their communication skills, enabling them to provide clear, constructive feedback and engage in meaningful conversations with their teams. This open communication fosters trust, transparency and a sense of belonging among employees.
5. Aligning Individual and Organizational Goals: Executive coaching helps leaders align their personal goals with the organization’s objectives. This alignment ensures that leaders are not only driving their success, but also contributing to the organization's broader goals, creating a cohesive and focused work environment.
Executive coaching is vital to effective succession planning and employee engagement strategies. By investing in the development of their leaders, organizations can ensure a steady pipeline of talent ready to take on key roles while also creating a work environment that motivates and retains top talent. Incorporating executive coaching into your leadership development programs can yield significant benefits from enhanced employee performance to improved organizational resilience. As you consider your organization’s future, remember that the development of your leaders today is the foundation for your success tomorrow. Invest in your future.
Sources:
2. Census.gov
5. International Coaching Federation (ICF)
6. Society for Human Resource Management (SHRM)
7. Gallup
9. Development Dimensions International (DDI)
10. Deloitte
11. LinkedIn