Are you ready?
By Michael Wolsten, Michael Wolsten Consulting
What happens if a key leader leaves tomorrow?
Succession planning isn’t just about preparing for retirement—it’s about ensuring stability, continuity and sustainable growth. For credit unions, that means having a plan that not only satisfies internal leadership but also meets the expectations of your board of directors and the NCUA.
Leadership transitions are inevitable. But without a proactive strategy, they can lead to confusion, stalled momentum and loss of member trust. With the right process in place, a credit union can face transitions with confidence and clarity.
The Common Challenge
A credit union executive I recently worked with admitted they had no formal succession plan. With several senior leaders nearing retirement and no clear path for developing or promoting future talent, concern started to grow—especially with an NCUA exam on the horizon.
We built a strategy that:
- Identified high-potential team members
- Paired them with mentors
- Outlined a structured knowledge transfer process
The result? The leadership team felt secure, the board was confident and emerging leaders had a roadmap for their development. The NCUA examiner even complimented the CU on how thorough and proactive their plan was.
Succession planning isn’t about reacting to a crisis. It’s about building a foundation today for a stronger tomorrow.
The ABC Framework: Use a System, Not Just a Spreadsheet
In the ABC Framework, we talk about moving from reactive leadership to strategic, sustainable growth through three steps: Assess, Build, Cultivate. Succession planning is no different.
When you apply the ABC system to your leadership pipeline, it becomes more than a form—it becomes a living process that scales, sustains and supports the growth of your team over time.
Practical Steps to Build a Succession Plan That Actually Works
1. Assess: Identify What’s at Risk
Start by identifying which roles are mission-critical. Who holds knowledge or decision-making power that, if lost, would disrupt the operation of the credit union? Typical roles include:
- CEO and C-Suite positions
- Branch or department managers
- Key Board leadership roles
Next, map out your current team. Who is within 3–5 years of retirement? Who is likely to be recruited away? Where do you lack depth?
Tip: Create a Leadership Succession Tracking Sheet that lists key positions, potential departures and the readiness level of internal candidates. Review it quarterly with your senior leadership team.
2. Build: Develop Future Leaders Now
Spot and support your rising stars—those who show initiative, adaptability and strong communication. These team members may not have all the skills yet, but they have the mindset to grow.
Give them:
- Mentorship from seasoned leaders
- Cross-functional projects
- Leadership development training
- Opportunities to shadow decision-making meetings
Don’t forget about your board. Many credit unions fail to plan for board succession until it’s too late. Start identifying and mentoring future board members early—especially those who represent younger generations or underserved segments of your field of membership.
3. Cultivate: Document, Train and Reinforce
This is where most plans fall short. Great strategy means nothing without consistency. To bring your succession plan to life:
- Create written policies and procedures for leadership transitions
- Document key processes and institutional knowledge now, not later
- Hold recurring check-ins to assess progress, adjust development plans and ensure your leaders are growing
Also, make sure your plan is exam-ready. NCUA examiners are increasingly asking for formal succession policies—especially after recent regulatory updates. Ensure your plan includes:
- Succession procedures
- Emergency backup assignments
- Roles and responsibilities for leadership and board
- A simple way to update and track succession metrics
A plan that lives in a binder on a shelf won’t help you—or satisfy an examiner. The key is to cultivate it consistently over time.
Power Questions to Drive Action
Ask yourself and your team:
- Who are our high-potential leaders and how are we developing them?
- What leadership gaps could emerge in the next 1–3 years?
- Are our board and executive leaders aligned on the succession plan?
- How are we ensuring senior leaders are passing down knowledge before they exit?
Are we prepared to confidently hand our plan to the NCUA at a moment’s notice?
Succession Planning Isn’t One-Size-Fits-All
Your plan doesn’t have to be perfect—but it does need to be intentional. The best succession strategies are customized to your culture, your growth goals and your operational structure. Whether you’re a small CU with one branch or a growing institution with multiple departments, the core principles are the same: plan early, build leaders continuously and revisit often.
Your Next Step
Choose one role—just one—and build a plan for who could step into it next. Pair that potential leader with a mentor. Document three key responsibilities that role holds. That’s how it starts.
Succession planning isn’t something you put off until later. It’s a leadership responsibility that impacts your team, your board, your members—and your future.
Are you ready to build a plan that works?
P.S. If you are looking for more great credit union-specific content like this, check out our Credit Union Playbook Newsletter. Head on over to creditunionplaybook.com to get started.