I believe the culture of your organization is your golden goose.
In this episode, I’m going to share with you how to protect your bank from the carnage that happens by bringing in executives from the outside who don’t get your culture.
- If you’re the kind of leader who feels like your executive team is ready to run a bank twice its current size and the next-in-line are ready to do the same, don’t go anywhere because I have a few nuggets for you to make things even better.
- If, on the other hand, you’re looking around the table at your executive team meetings and seeing a lot of gray hair and you’re not absolutely convinced the next string could, within a few years, run a bank twice the size, you’re going to love what I have to share with you—so you can solve this before it’s too late.
- If you’re somewhere in between, that’s typical, and you’ll love knowing that you can protect your momentum and decrease the chance of an “Oh my gosh—we didn’t see that coming” moment.
There are a few challenges to getting your next executive team ready.
- First, your current team may be operating so well that the people beneath them haven’t really had a chance to develop their skills and their ways of being.
- Second, there may be too few candidates internally that want the life of an executive, and they’ve made that clear. If you can’t even identify at least three people who are candidates for each executive slot, you’re in trouble.
- Third and most challenging, some banks think they’ll solve the problem by recruiting when the time comes. The Society for Human Resources and Management has statistics that show only one-third of all managers and executives placed in a new firm last more than a year.
It’s a HUGE risk, both that they won’t work out or WORSE, that they will stay, but destroy your culture in the process. It seems like most banks have at least one of these three issues.
Today, I’m going to give you a four-step solution that will guarantee that your organization never finds itself without fully prepared executives (and a strong bench).
Step 1: The 3:1 Formula for Executive Replacement
Unlike so many approaches to succession planning where a successor to the throne is listed, and then people sit and wait for their turn, you need to have at least three people selected for each position. Each future executive should have a working development plan to gain the skills and an executive’s “way of being.”
Step 2: Farm; Don’t Hunt
In contrast to the “we’ll find a headhunter” approach, realize that growing your own is always a better alternative. But “growing” doesn’t happen without an extreme education and development plan that you stick to long-term.
Step 3: Focus on Thinking Skills.
Beyond teaching future leaders the skills they need, what makes an executive an executive and not a manager is their “critical thinking skills.”
Future leaders need the ability to sort through options quickly—see the forest for the trees—and pull out what doesn’t matter so that a fast decision can be made.
A recent study showed that CEOs identified their biggest problem was not having enough talent to move into the C-suite. From talking with hundreds of bank executives each month, it’s an extreme issue in banking that could cost hundreds of banks their existence.
Step 4: Coach ‘em Up
Unlike the “sit and wait” approach, getting that executive-in-waiting an executive coach or executive education is imperative.
This goes far beyond the Graduate School of Banking, where people learn how banking works. They need an education on how to systematically and reliably make more money with less risk.
So, four steps:
- First, get a succession plan with at least three in line for every position, and get them tracking fast.
- Second, get the growth and development plan kicked off and institutionalized.
- Third, beyond the skills, they need to learn to “reason” like executives, and last, they need to understand what really works to make money—they need to learn the new game of banking.
By having your executive development and succession plan in the works, you can assure that your bank will be in business and healthy through the next generation. Join me next time where I’ll show you how to build more accountability in your executive team.