Craig Esrael, chairman of the board of PSCU Financial Services, said a succession plan made years before had helped lead the giant payments CUSO to choose a relatively little known payment executive as its next CEO.

The nationwide payments CUSO named Michael Kelly, a payments executive with Fiserv, as its new CEO this week. Kelly had been Fiserv's general manager of its payments network.

Esrael, president/CEO of the $369 million First South Financial Credit Union of Bartlett, Tenn., described how the members of the board consulted PSCU's detailed succession plan, even as they grieved the death of former CEO David Serlo.

Serlo had been the CUSO's first employee and served as the organization's CEO from the early 1980s until he died from complications of cancer. The board named long-term executive Mike Yatros to serve as interim CEO until the search was completed.

“I had known Dave for years and we were great friends,” Esrael said. “And literally several of us were still grieving when we got that plan out and started to go through it, but we knew that was what we had to do.”

Esrael explained the board and Serlo had first created the plan many years ago and that it had been updated last about three years before Serlo's death. The plan laid out a general guideline of what the organization should look for in a successor to Serlo, but was not too specific when it came to how the board should accomplish that goal.

Among the first questions the board faced, Esrael explained, was whether to look within the credit union industry or outside it for someone to guide the group–and that, in turn, would help drive the executive search firm they would choose.

“After considering it carefully, we decided that PSCU has such a credit union focus–it is owned by credit unions, its members and clients are credit unions and it has credit union values at its core–that we had to choose someone from within the industry who would at least be familiar with credit unions and how we work,” he said.

Only one of the board's criteria for a new CEO had anything to do directly with experience in the payment's industry, Esrael said. The bulk of the criteria had to do with a candidate having leadership qualities like charisma and eloquence. “We wanted someone who people could think of when they call PSCU Financial Services to mind,” Esrael added.

With the help of a search firm, the board soon gathered 200 written applications that laid out the applicant's responses to a set of specific questions. How each applicant answered the questions had been up to them, and Esrael reported the applications ran from between 30 pages and 200.

The applications provided a basis the board used to winnow down the number of applications before starting upper level, formal interviews. The search firm had already conducted initial interviews, he said.

Even though no one on the board knew Kelly or had worked with him previously, Esrael said that the payments executive won the board over with the connections he made with board members and the shared vision he had of the organization and its future.

“It was clear that he and the board were in widespread agreement on where the organization could and should go and what it could take to get there,” Esrael said.

Kelly had worked for Fiserv twice, rising the first time to become manager of business development for the technology and payments firm before leaving to found and became CEO of a company called ePayments Consulting Group, and then coming back to Fiserv as general manager of payments network.

As president of ePayments Consulting Group, Kelly “devised and implemented innovative strategies to help financial institutions capitalize on their debit portfolios to grow their noninterest income,” Fiserv said when he returned.

Fiserv's payment networks saw record growth in the numbers of transactions while Kelly was general manager of payments network.

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PSCU Financial Services Said Succession Plan Led To Kelly

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