Why flattening your org chart may raise your succession game
Many industries are experiencing an interesting shift toward flatter organizational structures. The financial services sector is no exception. With fewer levels of hierarchy, the thinking goes, there is more room for autonomy. This creates space for employees to rely less on supervisors and more on their training when making day-to-day decisions.
The need to make those decisions faster is among the varied reasons organizations are flattening their org charts. Too many cooks in the kitchen typically overcomplicates choices. Over time, unnecessary complexity can create a culture of micromanagement and mistrust—not exactly the kind of environment that attracts top talent, nor supports a strong leadership continuity plan.
Indeed, today’s up-and-coming leaders seem to prefer greater autonomy at work. It’s no wonder. Autonomy leads to feelings of being valued, greater happiness and engagement. What’s more, it often motivates employees to go out and learn how to do something they may not already know how to do. In other words, autonomy shapes workers into leaders—making it much easier to develop an attainable succession plan.
Another reason credit unions may be making the shift to flatter structures is to manage the necessary connections between a growing number of products, services, channels and experiences. Members expect credit unions to meet them where they are, enabling engagement on the same product via phone, chat, in-branch or on a mobile banking site. The more internal complexity, the more difficult it is for credit unions to deliver on that expectation.
Leadership Continuity Considerations for Flatter Structures
Whatever the motivation, flatter org structures do create new challenges for leadership continuity. Among them is the necessary change to employee retention strategies.
As an example, lateral movement has long been a go-to reward for acknowledging the hard work and value of an employee. What happens when there are simply fewer management-level positions on your credit union’s org chart?
Fortunately, best practices for retaining top talent within flatter organizations have emerged in recent years. They center on values like autonomy, recognition, equity and belonging.
This includes things like allowing employees to develop their own job descriptions and craft their own titles; developing new channels for distributing kudos both internally and externally; providing pay transparency across divisions; and establishing employee resource groups.
Another ideas is offering non-traditional or highly competitive employee benefits that consider all the stages along an employee’s journey. Much like credit unions map out different touchpoints along a member’s financial journey, succession planners can design a benefits package that evolves alongside employees as they progress through different leadership and life stages.
Aligning Succession to Structure
Like a lot of workplace trends, the pandemic accelerated the shift to flatter orgs, thanks in part to the increased humanity employees experienced at work. From seeing the inside of their superiors’ homes on Zoom to bonding over shared anxieties related to COVID-19, the cultural and emotional scaffolding of corporate hierarchies began to crumble.
If instituting a flatter structure is on your credit union’s road map, consider how you will align your leadership continuity plan to the new architecture. For instance, you may need to adjust executive rewards, retention and retirement strategies to ensure the employees you’ve identified for successive leadership remain happy and loyal for the long-term.
Competitive executive benefits are crucial to retaining top talent, and to have an effective succession plan, retaining top talent is job No. 1. If competitive packages sound too ambitious for your credit union’s budget, chin up. There are plenty of innovative methods you can deploy. For instance, total benefits pre-funding and charitable donation accounts are great options for funding competitive retention strategies.
Making enhancements to your executive benefits program may improve the chances of your retention and succession plans’ ultimate success. As a bonus, instituting better packages will show up-and-coming leaders you are considering how the change to a flatter structure impacts them and their futures at the credit union.
To learn more about maintaining relevant and competitive succession plans, download the eBook, “6 market realities impacting credit union leadership continuity.”
Andy Roquet is a senior executive benefits specialist for CUESolutions provider CUNA Mutual Group Executive Benefit Solutions with more than three decades of service to credit union leaders. He can be reached.
The views presented here are the author’s alone and not necessarily representative of opinions held by LPL Financial or any affiliated entity.
CUNA Mutual Group and Cuna Mutual Group are marketing names for CUNA Mutual Holding Company, a mutual insurance holding company, its subsidiaries, and affiliates. Certain brokered insurance products from various insurers may be offered through CUNA Mutual Insurance Agency, a subsidiary of CUNA Mutual Group. Each insurer is solely responsible for the financial obligations under the policies and contracts it issues. For more information, contact your Executive Benefits Specialist at 800-356-2644.
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