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Hardy and Michaels, who are both under age 40, emphasized that, properly understood, succession planning means more than merely planning for eventual replacements, it should be a way of tapping into the full talent of everyone on the credit union staff.

“When I look at succession planning, I see the root of the word, success,” said Hardy, explaining that as CEO, he considered one of his jobs is to find and unlock the staff's passions and then help move them to positions that are going to engage those passions not only for their success but for the success of the whole organization.

When asked how that employee development and formation should progress, Hollen stressed several times that he looks for the human qualities in potential successor more than just having a working knowledge of skills.

“Strength of character, humility, empathy, honesty, all those things are the most important things,” Hollen explained. “Someone can learn operations or finance or other skills they need, but you have to start with those human qualities.”

Hardy took the position that leaders are born, not made, but added that merely being a born leader is not enough.

“A leader is going to show their leadership qualities no matter what the field,' he said, 'but leadership qualities will only take them so far if they don't train and develop themselves.”

Hardy said his credit union had not particularly thought about succession previously, having fallen into a pattern where succession tended to go to the second executive in charge automatically. However that changed soon after he became CEO, when the second executive unexpectedly passed away from cancer and the third executive had to resign. The experience of having had so much of its institutional memory and leadership disappear in a relatively short amount of time brought home to the credit union's board of directors that the organization needed to change how it developed its own talent.

“Now if something should happen to me, my board knows they have two executives they can ask on short notice to step into my position,” Hardy said.

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Not for CEOs: A Succession Plan Is Not a Replacement Plan (Video Included)

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