Successful onboarding is a key part of any talent management strategy. With the high cost of recruiting, business leaders must understand that effectively integrating new hires into the organization is an important step to ensure their success. Unfortunately, Gallup's most recent State of the American Workplace report shows only 12 percent of employees strongly agree their organization does a great job of onboarding new employees. 

As the captain of the ship, a new bank CEO's onboarding is critical to their success and, therefore, the success of the bank. A new CEO who is not effectively onboarded—no matter how qualified for the role—is working from a "knowledge deficit" and may bring in an agenda that doesn't fit the bank's current position, according to R. David Fritz, Jr., managing partner and co-founder of Executive Benefits Network (EBN). Fortunately, most Wisconsin banks follow well-established succession plans and onboarding strategies. "Banks tend to do a good job of preparing the next leader for the bank," said Curtis Chrystal, president and CEO of Wisconsin Bank & Trust, Madison. "I'm privileged to be part of an organization that places high value on development plans, and is always looking for internal candidates that can take the next step." 

To get a better view of how onboarding a CEO works in practice, WBA interviewed six bankers who took on that role in 2018—either for the first time or at a new organization. Combined with Fritz' expert perspective, these conversations revealed three keys to successfully onboarding a new CEO: beginning with strategy, building relationships, and strong communication throughout the process. 

Begin with Strategy

An important best practice for both the selection and onboarding of a new bank leader is to begin with a review of the bank's strategic plan as prepared by the board and senior management, according to Fritz. That ensures that the board and the new CEO are on the same page regarding the priorities and direction of the bank moving forward. That said, there's no one-size-fits-all approach to onboarding a new CEO. Each bank and incoming chief executive is unique, so flexible onboarding is the most effective. This requires a formal process incorporated into the succession plan, combined with the adaptability to adjust that process to fit the bank's and CEO's unique needs and leadership style. "We have onboarding plans for different levels of the bank, but not for this specific role," explained Brian Spreuer, president and CEO of River Bank, La Crosse. "It's very individual." 

For example, the Blackhawk Bank Board began the succession process five years in advance, looking at internal and external candidates, and determined an internal candidate would be more likely to preserve the bank's strategic direction and culture. "Though there was a plan in place for several years, it was rather fluid and changed over time," said Todd James, president/CEO of Blackhawk Bancorp, Beloit. The idea of a separate CEO for the bank and holding company emerged fairly late in the process. James and David Adkins now hold dual roles as president of the bank holding company and Blackhawk Bank, respectively. "Our succession plan is almost more of a gap analysis and it goes layers deep," Adkins explained. The bank explores who potential successors to various roles are, and—if they're internal—what gaps they have, and how the bank can go about filling those gaps. "That flexibility is key to onboarding the CEO," said James. "The Board had the flexibility and insight to do what was right for our bank, rather than follow an external model."

Another common onboarding practice that helps ensure continuity of strategy is an "on the job" transition, especially in retirement situations, where the outgoing CEO stays on for six to nine months to work with the incoming CEO and provide training and advice. For example, Jim Popp, CEO of Johnson Financial Group in Racine, started as president of Johnson Bank with a planned transition into the role of CEO after six months of working alongside the existing CEO. "At Johnson Financial Group, they were very thoughtful about putting someone in charge of the transition so that all of the information I needed was collected and we were able to walk through it all," Popp said. "That said, there's always stuff you learn on the fly. That's just the nature of it."

Building Relationships 

Another key to successful CEO onboarding is building relationships between the incoming leader and customers, staff, and other important stakeholders. "It's very important that the CEO is out meeting the bank's key customers, including commercial relationships, large retail relationships, and significant depositors, which includes increasing his or her visibility in the community," Fritz explained. 

This early relationship-building is especially important with bank staff, because it can be the difference between retaining and losing key talent. "The most important part of that transition was I got together with all the key people early on and we were able to keep everyone on board," Spreuer said. Scott Cattanach, president and CEO of Peoples State Bank, Wausau, spent his first month as CEO meeting one-on-one with key sales, operations, and support staff. He focused on listening and answering questions, while also keeping track of recurring comments made across department lines. "I tried to follow up on all of the concerns or requests made and visited all our banking locations to meet every employee," he said. 

Other stakeholders who new CEOs should build relationships with include major vendors and/or suppliers, tax auditors, and the bank's legal counsel; all are good sources of information for a new CEO, according to Fritz. "From talking with those key connections, the CEO can develop a good vision of the bank's strengths and weaknesses and then use those findings to develop a really solid strategic plan," he said. Solid peer relationships with other bank leaders are also important. "Develop a peer group of CEOs, including local, state-based, and regional, to provide the CEO with a sounding board and perspective," Fritz advised. For example, Cattanach joined the WBA CEOnly Network in order to learn from more experienced CEOs. "I have found our state's community bankers to be both knowledgeable and helpful," he said.

Consistent Communication 

Strong, consistent communication between the board/selection committee, staff, and the new CEO is the final key component to a successful CEO onboarding process. First, after selecting a candidate, the board should "promote and sell" the new CEO to all key constituents, including staff, shareholders, and customers, according to Fritz. "Explain why they were chosen and why they are the best person to lead the bank to success," he said. "Open communication and regular updates on the process from the search committee is very important for a seamless transition from searching to onboarding to 'going live.' Everyone likes to be in the know." When this is done well, the new CEO can be easily accepted and trusted by staff, which Chrystal says surprised him. "The willingness of people to accept you as a new leader without 'proving up' yet was incredible," he said. 

For the incoming CEO, communicating directly with staff provides a broad perspective of the bank while also building relationships and establishing strong communication habits. "Spend the time to go out and talk to people at every level and in all corners of the organization," Popp advised. "There's nothing like hearing directly from people and having them hear directly from you. Communicating effectively with the entire company is one of the most important things you'll do as CEO." This is even more important if significant changes are part of the incoming CEO's strategy. Cattanach recommends summarizing the strategy and its benefits into an "elevator speech" to share with employees. "A leadership change, even to a well-known leader, creates a lot of uncertainty in the minds of employees," he explained. "Communicating the basic plan and getting buy-in from your senior leadership team and bank staff takes time, but once you earn their trust and staff see the benefits of the strategy or change, everyone begins to pull in the same direction."

Executive Benefits Network (EBN) is a WBA Bronze Associate Member. 

Advice for New CEOs

The six executives interviewed for this article also offered advice for their peers based on their experiences stepping into the CEO shoes. In addition to the list below, several of these CEOs mentioned prioritizing as a key skill to hone. 

Adkins "It's really about the culture. Focus on that first. A new CEO may have great initiatives, programs, great ways of doing things… but if the culture of the organization isn't where it needs to be those things will be difficult to implement. You have to make sure the culture is receptive and reflective of the vision that the CEO has."
Cattanach "My best advice is to listen to other respected leaders, including those within your bank, and take constructive advice. Seek the advice of bank leaders to learn from their experience, and empower them to provide their own solutions."
Chrystal "Get to know all your staff. Make yourself visible to everyone. Your frontline staff have the most interaction with the customers who make up the core of your business. Make sure they know the value of their efforts. Offer praise when things go well, and handle adversity in private. Reward great performance and make sure you celebrate it with all staff."
James "The biggest thing in my situation is how hard it is to pull yourself out of some of the things you were doing before. Especially if you're an internal hire, make sure you get a strong successor for your previous role, and don't be afraid to let them change things and do things better than you did. I try to learn from the people who work for me rather than thinking I have all the answers."
Popp "One of the things you are reminded of very quickly when you become CEO is the impact of the things you say and do. You set the pace and everyone is watching. It's funny, but a passing remark as you're walking down the hallway can be misinterpreted as the go-ahead for a new project. The gravity of what you say, when you say it, and how you say it is very strong. It's like the old E. F. Hutton commercials—when you talk, people listen."
Spreuer "We went through a safety and soundness exam immediately after I took over. The exam went well, but you can never be fully prepared for that until you go through it as the CEO."