Hiring and developing a successful credit union CEO can’t be reduced to a formula. But the surprising results of a recent Filene Research Institute study could help guide your credit union in the right direction its next CEO search.
Report author Murray Barrick, PhD, of Texas A&M University, says he was surprised how often personality traits seemed better predictors of credit union success, often more important than leadership skills or high-productivity work practices.
Here’s a brief description of each of the three variables measured: Personality traits included:
Leadership skills included relationship building, and the ability to complete tasks and plan/implement strategic change.
High-productivity work practices (HPWPs) are a collection of human resources practices that have shown to improve job satisfaction, reduce turnover, increase productivity and overall organizational performance.
Examples include merit-based incentive pay; performance appraisals for coaching and to clarify goals/expectations; Internal/external equity in compensation; and involving employees in problem solving, increasing efficiency and overall performance.
The research also sought to determine how the variables—alone or in combination—of personality traits, leadership skills, and HPWPs predicted credit union success, which itself was broken down into three elements: transformational leadership behavior, employee engagement, and organizational performance.
Personality is More Important Than Skills Another surprise to the researchers was which personality traits were most important.
A CEO’s overall personality traits were more important than leadership skills in two of the three success factors: organizational performance and employee engagement. The third measurement of credit union success, transformational leadership, leaned more heavily on the CEO’s leadership skills, with the top three predictors (plan/implement strategic change; relationship building, and task completion) accounting for 55% of the overall predictors of success.
The highest predictors of employee engagement, by far, were the use of high-productivity work practices (33 %) and the CEO’s conscientiousness (32%)
The top two predictors of a credit union’s overall performance were the CEO’s emotional stability (30%) and the CEO’s relationship building skills (18%)