To provide an incentive for our student peer groups to continue to engage throughout the year, one of GSBC’s intersession projects is a collaborative peer-group project. These groups of 10 students identify a topic of interest, agree on an approach and divide the work among group members. This past year, one of our groups took on the challenging topic of succession planning.
This is a significant issue for the industry impacting all levels of leadership and corporate governance. There are six banks represented in this peer group (they also have two regulators and one industry consultant). Among the six banks, they project an aggregate turnover in their workforce of 25 percent in the next 3-5 years. Here are their succession planning recommendations:
Succession planning allows an institution to identify competency gaps early which can be addressed through development or outside candidates. Succession plans can also utilize current senior leadership as mentors to prepare staff for future roles. This type of engagement between senior level staff and more junior staff can create new ideas and approaches to work as generations work together. Well-defined succession management practices like this can improve employee engagement and retention due to transparency in career paths and development opportunities.
Opportunity, Development & Sustainability
The group provides a hard reality: poor succession planning can result in management being unprepared to lead or the bank selling. This is the precise reason GSBC launched the Executive Development Institute for Community Bankers (EDI) in 2014; there needed to be a better solution than selling the bank or hiring a talent search firm. As of April 2023, 75 bankers have graduated from EDI.
Succession planning is more than “who is next,” and more about opportunity, development and sustainability of the enterprise. The organizations we lead deserve nothing less.
I take full responsibility for the above interpretation of the paper, but want to acknowledge the excellent work done by the original student authors:
Michael Crow (Minnesota), Michael Flohr (Colorado), Mallory Holley (South Carolina), Joshua Johnson (Nebraska), Chris Kaspar (Texas), Carolyn Matzinger (Iowa), Shane Mispel (Vermont), Eby Ness (Missouri), Matthew Speed (Georgia)
Michael L. Stevens
This is the second installment in a 4-part series of articles highlighting the work of our peer groups from the 2022 Annual School Session. Read the first installment, Employee Retention Strategies: Viewpoints from GSBC Peer Group Projects.