How Patelco Credit Union Simplified Succession Planning

Susan Makris barely pauses when the ground shakes beneath her. Mid-conversation about Patelco Credit Union’s succession planning strategy, the chief people officer laughs off a mild California tremor and keeps going. That resilience mirrors the approach Patelco ($9.5B, Dublin, CA) has taken to leadership development — steady, focused, and ready for what’s next.

Makris has good reason to be enthusiastic about Patelco’s plans. In an effort to better position itself for success, the credit union has shifted away from the “9 box” and other traditional succession planning metrics over the past decade.

“We were spending more time having conversations about the box someone was assessed to than talking about the capabilities and needs we have today and in the future,” Makris says.

With that in mind, she and other credit union leaders met with the board to review the entire talent-management process, including succession planning and leadership frameworks. That was crucial not only for succession-planning efforts but also the additional regulatory requirements that will come into play when Patelco passes the $10 billion asset threshold.

The result is a simpler, three-tiered evaluation that classifies leaders at the director level and higher in one of three buckets:

• Top Talent/Next Gen: Leaders who have already mastered their current role and have the ability to take on work of a greater scale or scope. The credit union is likely to promote this individual within the next two years and wants to provide continued development opportunities.
• Key Talent/Pro In Place: These employees will continue to develop in their current role, with some growth and development opportunities available as warranted
• Monitor/Transition: These leaders might be challenged in their learning; the credit union will assess them for today and the future.

“We have clear expectations for our leaders based on talent assessments, cross-functional calibration, and transparent plans communicated to the individual,” Makris says.

The “Next Gen” pool includes eight to 12 people at the vice president level or above who could be promoted to senior vice president or a role on the executive leadership team within two years. That includes investments to help those staffers grow, whether it’s conference attendance, leadership programs, training and certification, and more. Those investments total anywhere from $2,500 to $10,000, but all go toward new opportunities and not the employee’s paycheck.

4 Key Agilities

Patelco’s training efforts contribute to a strong foundation for its long-term succession planning, where its work — for both planned and unplanned departures — all ties back to the strategic plan, cascading what’s expected of leadership down through the executive team.

At Patelco, leaders who want to progress must show strength in four specific agilities:

• Cognitive.
• Business.
• Execution.
• Leadership.

Demonstrated success here depends on how effectively a leader operates within those agilities and whether they have the capability to drive the business outcomes Patelco is looking for, Makris says.

That philosophy started with the CEO and executive leadership team and later spread to those at the vice president level and then at the director level.

Retention And Career Pathing

“We’ve always had the philosophy to hire not just for today but for tomorrow,” says Makris, who has been with Patelco since 2014. She adds that because the credit union is located so close to Silicon Valley, the war for talent is especially challenging, particularly as it relates to corporate functions like technology, HR, finance, and compliance.

“Those critical roles maybe aren’t directly front-facing but are super important in supporting our strategy and ensuring we have a safe and secure environment for our members,” she adds.

Patelco’s new strategy has helped retain talent that in the past might have gone to fintechs or other competitors, whereas a commitment to paying a living wage for those who aren’t yet senior leaders of the organization has helped retain lower-level staff.

“Our talent and succession program is imbedded in our ongoing talent-management program,” Makris says. “It’s not an event; it’s not once a year; it’s completely integrated in our year-round performance feedback.”

Patelco’s talent planning and leadership development is a subset of broader workforce strategies the credit union doubled down on a few years go as the pandemic subsided. Guided by a mission centered on financial health and wellbeing for members, CEO Erin Mendez and the board determined the credit union should be equally committed to those issues for team members.

“If we promote financial, physical, emotional, and career health as our four pillars that support overall wellbeing, how can we organically benefit from those efforts and experiences?” Makris says. “Ultimately, the objective is that our team members have experienced what it means to have financial health and wellbeing so they can deliver our purpose and mission to our members.”

The credit union formally rolled out that strategy in 2023. The work to support it has included more efforts around pay transparency, including ensuring team members are aware of the salary range for all positions, along with the skills and capabilities needed for roles. Staff can then develop plans to acquire the skills or certifications they need for specific roles if an opening becomes available, which can provide a path forward at the credit union.

“We’ve tried to lead with all four pillars,” Makris says. “If you have career pathing, we have good financial, physical, and emotional rewards to support the team member and ultimately give them opportunities to keep advancing.”

Looking For Succession Planning Inspiration? Callahan’s Executive Roundtables bring together HR leaders for candid, moment-in-time conversations on what’s working now and what’s next. Attend a roundtable, and you’ll leave with practical takeaways and a trusted peer network to call on long after the conversation ends. Learn more today.