Four Letters. Infinite Potential.

IBM Southeast Employees' Federal Credit Union

Thoughtful Planning and Thorough, Expert Resources Lead to Successful CEO Search

In 1969, a group of IBM employees got together to form IBM Southeast Employees’ Federal Credit Union, each contributing just $0.25. Today, that collection of quarters has grown into one of the nation’s largest credit unions with $878 million in assets, 16 locations in South Florida and the Atlanta area, and more than 73,000 members.

Retirement of long-time CEO creates significant change for credit union
In 2012, the credit union’s CEO announced his retirement after 20 years of leadership, giving a year’s notice. Hiring new leadership was a new experience for the credit union and its board of directors. According to VP of Human Resources and Training, David Lyons, “There is no better definition of change for a credit union than transitioning to a new CEO.”

A successful search begins with the right strategy

Recognizing the importance of maintaining consistent leadership, the board immediately appointed a 5-member committee, with Lyons serving as an advisor. The objective: to have the new CEO on board before the current CEO retired. One of the first steps Lyons took was to familiarize the board with both the search and hiring process, and the cost of hiring a CEO in the current marketplace, including salary ranges, typical executive benefits and fringe benefits.

The committee’s initial planning focused on five strategic questions:

  1. What are the existing CEO’s responsibilities?
  2. When was the last time the CEO’s job description was reviewed?
  3. Was the board interested in shifting the credit union’s strategy with a new CEO?
  4. How important was cultural fit, change and growth going forward?
  5. Did the credit union want the new CEO to maintain the current culture?

The committee established a budget and set a timeline to keep their efforts on track. “We fully expected the search costs would include some salary overlap, since we wanted the new CEO in place a month or two before our existing CEO left,” Lyons said.

Another priority was communicating with the staff about the search and addressing any concerns about new leadership. “We wanted to provide assurances relating to job security and the credit union’s direction,” Lyons explained. “We also made a commitment to update them throughout the process.”

The committee anticipated heavy interest from current employees and external candidates, including executives not actively looking for a job. “Given the volume of applications we expected, we believed we would get the best results by contracting with a professional search firm to help us through the process,” Lyons continued.

Setting the criteria for a qualified search partner

Four potential search firms were considered, with the committee seeking the following qualifications:

  • Established in the credit union industry; 
  • Has experience and a proven track record of successful executive placements; 
  • Provides access to a national network of potential candidates; 
  • Committed to partnering with the credit union; and 
  • Demonstrates a full understanding of the credit union’s culture, to find the right fit. 

The committee selected JMFA Executive Recruiting Services because they met all of their criteria. Plus, JMFA was a trusted member of CUES. “The credit union had been a member of CUES for more than 15 years and that association was very important to us,” Lyons said.

Preparation gets credit union off on the right foot

JMFA Executive Vice President Charles Shanley commended the committee’s search preparations. “They did a lot of things right in the beginning to ensure a successful process, like establishing a manageable-sized search committee and getting up-to-speed on current trends in compensation and benefits,” he said. “Oftentimes when you have a long-time leader leaving an institution, he or she may not have received the proper incremental increases over the years. When it comes time to find a replacement, a search committee may experience sticker shock at current salary and benefit ranges.”

Process begins with a critical getting acquainted phase

For JMFA’s executive recruiting experts, a successful search begins with learning as much as possible about the institution. To do this, they spent time onsite familiarizing themselves with the culture and the candidate competencies they needed to include in the search criteria. “IBM Southeast EFCU is a very member-centric, service-focused institution and it was important to them that we find someone who truly fit their culture,” Shanley said.

JMFA consultants met with the search committee, board members and staff for input. They also met with any internal employees interested in being considered for the position, to explain how the process would work.

Broad reach and a rigorous evaluation process yields top candidates

With a thorough understanding of what they were looking for, JMFA consultants put the search process wheels in motion. By combining traditional search techniques – such as calling qualified executives – with social media resources and networking groups that provide broader access to industry talent, JMFA tapped into their database of 85,000 contacts. Not only did this extend the candidate selection far beyond local applicants or those who apply for every CEO opening, it enabled JMFA to attract passive candidates who weren’t circulating their resume but had the qualities and qualifications the credit union was seeking.

The candidate pool was narrowed down through basic interviews, behavioral interviews and financial reviews of the institution where they were employed. “This process enables us to determine whether any hiccups in an institution’s financials might be caused by the candidate’s decisions or actions,” Shanley said. Candidates who progressed to the second round were asked to complete a project that enabled them to demonstrate their vision and management style in a hypothetical situation. Based on all of the information gathered, the committee then selected the candidates they wanted to interview.

JMFA’s rigorous evaluation process also includes personality tests on the finalists. “We consider this a very important resource for making sure the candidates are who they say they are,” Shanley explained. “Some people are very good at interviewing but you don’t get a true sense of who they really are. These test results offer a 99% accurate picture of a candidate’s personality, leadership style and mentoring skills, and enables us to properly represent the candidates to our clients.”

JMFA then scheduled one last interview with all of the finalists – either in person or via video conference – to ensure the best results. “It’s important to have a face-to-face conversation at this point in the process, said Shanley.

Experts help simplify the final selection
Finally, JMFA recommended eight candidates to the search committee and provided a summary guide that contained a brief overview of each candidate, their resume, testing results, compensation information and completed project results. JMFA consultants met with the committee to review this information and answer any questions. From this list, two candidates were selected for final in-person interviews held at the credit union, followed by a social event that gave the board an opportunity to interact with the candidates outside the work environment.

Once the final choice was made, JMFA assisted with salary negotiations and recommended a provider to help put together a Supplemental Executive Retirement Plan (SERP) that would provide the new CEO with benefits above and beyond those covered in traditional retirement plans. “Including this step in the process was new for us,” Lyons said. “But we believed it was an important retention recommendation.”

“We were very impressed with the way JMFA’s experts handled the entire process,” Lyons continued. “From the beginning they helped everyone understand the timeframe and steps it would take to fill this important position. In the end, the profile binder of the candidates was an excellent tool for the board to review; the personality profile was extremely informative and helped the board to develop interview questions; and the video conference was a very, very good medium to work with and saved us the expense of bringing candidates in to the credit union. When we finally did bring in the final two candidates for personal interviews, we were very well prepared.

“At the end of the day, we were very pleased with the process and the results. JMFA did a lot of the legwork and the process was completed right on our timeline – which is the reason we hired them in the first place,” he concluded.

About JMFA

JMFA is a leading provider of profitability and performance-improvement consulting. For more than 35 years, JMFA has been recognized as one of the most trusted names in the industry, helping financial institutions reach their goals. JMFA is recognized for earnings enhancement and expense control programs, executive placement, as well as product, service, pricing and technology-improvement consulting. Simply stated, JMFA’s programs and services are designed to increase income or reduce expenses. JMFA is proud to be a preferred provider for performance-enhancement consulting services among many industry groups.

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