Developing Your CEO –

A ‘Competency Model’ Will Help

CUES Directors Edge
Vol 25/No.2 Summer 2014
click here for pdf file

The time a CEO stays with an organization has steadily declined to an average of five years, according to a recent study by Korn Ferry ( While credit unions have often fared better than other types of organizations in retaining their CEOs over time, credit union boards still will want to consider leveraging leadership competency models within their talent toolkits, if they haven’t already. By identifying the qualities a CEO should have and/or be developing, a competency model can help identify the best candidates during a CEO search. A competency model can also provide a roadmap for developing and managing the board’s only employee: its CEO.

The cost of not managing your CEO is very high. Various studies target the direct and indirect costs of losing a key executive at 300-500 percent of the executive’s annual total compensation. If your board doesn’t manage your CEO well, your medium to large credit union could lose a lot of money.

Will you retain the CEO of your credit union as the economy continues to improve in the next few years? Selection, development and management of the CEO are important roles for the board of directors.

Competency Model Development

Different organizations take different paths in developing competency models that work well for them. For example, I have worked with organizations where we started by adopting a valid, commercially available model, such as the one offered by the Center for Creative Leadership ( In other cases, we have taken clients through a full customization process, given their needs and organizational goals. No one pathway is right for everyone. The steps below describe the journey you could take to develop a competency model that would support the development and retention of your current CEO or the hiring and development of your next one.


Agree on the project goal, organizational requirements and current state.

  • Example goal: “Accelerate development of emerging and future leaders.”
  • Example requirement: “Keep project investment at a reasonable level.”
  • Example current state: “We are losing 50 percent of emerging talent.


Differentiate between general leadership requirements and critical competencies.

  • Illustrate the difference by collecting success stories from people who are already demonstrating the qualities you hope to cultivate.


Develop your preliminary competency framework.

  • This is a chart or spreadsheet listing the most relevant leadership and management competencies for your CU.
  • Create competency definitions and examples of high performance behaviors.


Validate the reliability for your new leadership competency model. 

  • The most important and common way to do this is to survey to see if the competencies identified are truly essential for success.
  • Develop a communication and change management plan/toolkit.
  • Pilot, refine, and continue integrating the model for additional return on your investment.


Dan Loichinger is founder, president and principal coach at Loichinger Advantage LLC. As a TEC Chairman (,he facilitates CEO roundtables that provide developmental experiences for top executives.He and his firm associates have partnered with credit union, industry and non-profit clients for 15 years.