HR 4 Coops: Succession Planning — Preparing the Next Generation of Cooperative Leaders

 What happens to a cooperative when a key leader suddenly leaves?

This is a question that many cooperatives may not think about until it actually happens.

A General Manager retires.

A department head resigns.

A key officer becomes unavailable.

Or, unexpectedly, a leader can no longer continue in the position.

The immediate concern is usually:

"Who will take over?"

But succession planning asks a much more important question:

"Who have we been preparing to take over?"

For me, this is where succession planning becomes an important part of HR in cooperatives.

Succession planning is not simply about finding someone to replace a person who leaves. It is about ensuring that the cooperative can continue moving forward even when its leaders change.

For our MSM cooperatives, this does not have to begin with a complicated succession management system.

It can begin with a simple conversation about who needs to be ready, what capabilities they need, and how we will prepare them.

Here are three thoughts I would like to share.

1. Succession Planning Protects the Continuity of the Cooperative

Leaders provide direction.

They make decisions.

They guide people.

They implement plans.

They initiate improvements and lead change.

This is particularly important in cooperatives where the General Manager or a key officer may have accumulated years of knowledge about the organization, its members, systems, relationships, and operations.

What happens if that person suddenly leaves?

If there is no plan, the cooperative may experience disruption.

Decisions may be delayed.

Employees may become uncertain.

Important knowledge may be lost.

Members may feel the effects through slower or less effective service.

And the cooperative may spend considerable time simply trying to find someone who can take over.

This is why I see succession planning as a continuity plan for people and leadership.

It gives the cooperative a roadmap.

A written succession process can identify:

• critical positions;
• the competencies required for those positions;
• possible internal successors;
• development needs;
• temporary or emergency arrangements; and
• the process for a leadership transition.

For smaller cooperatives, you don't need to start with every position.

Start with the positions where leadership loss would have the greatest impact.

Ask:

"If this person is suddenly no longer available tomorrow, who can step in?"

If the answer is "Nobody," that position may need a succession plan.

2. Succession Planning Must Fit the Cooperative's Values and Culture

We should not assume that the person with the best technical skills will automatically become the best leader.

Leadership is more than knowledge.

It is also about values, behavior, judgment, relationships, and the ability to work with people.

Every cooperative has its own culture.

And cooperative culture matters when we identify future leaders.

We should therefore ask:

What kind of leader does our cooperative need?

Someone who can achieve targets?

Certainly.

Someone who understands operations?

Absolutely.

But in a cooperative, we also need leaders who understand:

Why does this cooperative exist?

A future leader should understand the cooperative's principles and values and appreciate that we are not simply managing a business—we are serving member-owners.

This is why succession planning should begin by defining the requirements of the position.

What competencies are needed?

What leadership behaviors are expected?

What knowledge must the person have?

What values should the person demonstrate?

Only after defining these should we begin looking at potential successors.

And here is an important point:

Don't wait until someone is about to retire before you start looking for a successor.

Leadership readiness takes time.

A good succession plan identifies people early enough to give them opportunities to learn, take on responsibilities, make decisions, and grow.

3. Developing Successors is an Investment—But Not a Guarantee

This is where succession planning becomes challenging.

When we identify someone as a potential successor, we need to invest in that person.

We may provide:

• training;
• coaching;
• mentoring;
• job rotations;
• special assignments;
• exposure to decision-making;
• leadership opportunities; and
• opportunities to learn from experienced leaders.

All of these require time and resources.

And there is always a risk.

The person we develop may eventually leave.

Some organizations hesitate to invest in people because of this possibility.

But I believe we should look at it differently.

The risk of developing people is real. But the risk of not developing anyone may be greater.

A training bond may help protect an investment in training, but it will not necessarily create commitment.

People stay when they see meaning, opportunity, fair treatment, growth, and a future in the organization.

This is why succession planning should be connected to career development.

If we tell an employee:

"We see potential in you."

we should also be able to answer:

"Here is how you can grow."

Give people a reason to imagine their future in the cooperative.

Not everyone identified as a potential successor will eventually take the position.

And that's okay.

The purpose of succession planning is not to guarantee that one particular person will become the next leader.

The purpose is to make sure the cooperative is developing people who are capable of leading when the need arises.

For MSM Cooperatives: Start Small

I know that some of our cooperatives may be thinking:

"This sounds good, but we only have one HR staff."

Or:

"Our General Manager is already doing HR. Where do we even begin?"

Start small.

You can begin with just one or two critical positions.

For example:

General Manager → Who could temporarily take over?

Operations Manager → Who is being prepared to take on greater responsibility?

Credit Manager → Who understands the role well enough to step in if needed?

Then ask three simple questions:

1. Who needs to be ready?

Identify the critical positions.

2. What does the person need to be capable of?

Identify the knowledge, skills, experience, and leadership behaviors required.

3. How will we prepare them?

Create a simple development plan.

It could be as simple as:

Learn → Observe → Assist → Practice → Lead

Over time, this can become a more structured succession program.

Succession Planning is Not Just an HR Responsibility

One final thought.

Succession planning may be coordinated by HR, but it should not belong to HR alone.

The Board has an important role in leadership continuity.

The General Manager has a responsibility to develop people.

Managers and supervisors should identify and develop potential leaders.

And employees should take responsibility for their own growth.

For cooperatives, succession planning is ultimately about protecting institutional knowledge, developing people, and ensuring continuity of service to our members.

Because when leadership changes, the mission should not stop.

The people may change.

The leaders may change.

The strategies may evolve.

But the cooperative's commitment to its member-owners must continue.

That is the real purpose of succession planning.

We don't prepare successors simply because someone might leave.

We prepare leaders because the cooperative must continue. 💙🧡💙

HR THOUGHTS FOR COOPERATIVES: Four HR Pivots to Build People, Strengthen Cooperatives, and Create Value for Member-Owners

HR is changing. But for cooperatives, the change is not only about technology. It is about people, purpose, and the lives of our members.

When we talk about the future of HR, we often hear about Artificial Intelligence, digitalization, people analytics, automation, and new ways of working. These topics now find their way into many of our business planning discussions.

But what does all of this mean for our micro, small, and medium-sized savings and credit cooperatives in the Philippines?

Many of our cooperatives do not yet have a full HR department. Some have only one HR staff who handles recruitment, employee records, training, employee concerns, and many other HR responsibilities.

In some cooperatives, the General Manager also handles HR. In one small cooperative I encountered, the HR assistant doubled as the executive secretary. This assistant mostly wrote memorandums and issued them directly to employees rather than through their immediate supervisors. As a result, HR was viewed as pro-management, leading employees to keep to themselves rather than seek HR advice for work-related concerns.

Does this mean that smaller cooperatives cannot practice strategic HR?

I believe they can.

Strategic HR does not begin with a large HR department, sophisticated systems, or expensive technology.

It begins with a simple understanding:

Our people are essential to fulfilling our cooperative's purpose.

Dave Ulrich recently shared a framework describing four HR pivots for the future of HR. I found the framework particularly interesting when viewed through the lens of cooperatives.

Figure 1. Dave Ulrich's Four HR Pivots
Source: Dave Ulrich, LinkedIn.

So, I asked myself:

How can we translate these four pivots into something practical and meaningful for our cooperatives?

The four pivots come from Ulrich's framework; what follows is my interpretation of how these ideas can be understood and applied in the cooperative setting.

Figure 2 - Four HR Pivots for Cooperatives — A cooperative-sector interpretation of Dave Ulrich's Four HR Pivots framework.

1. Stakeholder HR

From Employee HR to Creating Value for Member-Owners

Traditionally, HR focuses on employees.

We recruit people, train them, evaluate their performance, address their concerns, and try to keep good employees.

All of these remain important.

But in a cooperative, HR also needs to look beyond the employee because our work ultimately contributes to the well-being and success of our member-owners.

 Our employees serve our member-owners.

 Our Board provides direction.

 Our managers and supervisors lead our people.

 Our partners support our work.

 And our cooperative exists to improve the lives of its members and contribute to the community.

Therefore, HR needs to look beyond the employee.

When we recruit a teller, for example, we should not only ask:

"Does this person know how to handle transactions?"

We should also ask:

"Does this person understand the importance of serving members with honesty, respect, patience, and care?"

When we conduct customer service training, we should ask:

"Will this help our employees serve our members better?"

When we develop a performance management system, we should ask:

"Are we measuring behaviors and results that contribute to the cooperative's purpose?"

This is what Stakeholder HR means to me in a cooperative setting.

It means moving from:

"What is good for our employees?"

to also asking:

"What creates value for our member-owners and the cooperative community?"

 

2. Human Capability

From Individual Talent to People + Leadership + Organization

This is perhaps the most important pivot for me.

Sometimes we think that if we hire competent people, our problems will be solved.

But a cooperative can have very good employees and still struggle.

Why?

Because talent alone is not enough.

Employees need good leaders.

Leaders need a healthy organization.

And the organization needs systems and a culture that allow people to perform well.

This is why I like the concept of Human Capability.

For cooperatives, I would look at it through three connected areas:

1. Talent

Do we have competent, committed, and engaged employees?

2. Leadership

Do we have leaders who can guide, coach, develop, and inspire people?

3. Organization

Do we have a workplace, culture, systems, and teamwork that allow our people to succeed?

These three need to work together.

A competent employee in a poorly managed organization can become frustrated.

A good leader cannot succeed indefinitely without capable people and appropriate systems.

And good systems will not work if people do not understand or believe in the cooperative's purpose.

Therefore, developing people should go beyond sending employees to training.

We need to:

Train employees.

Coach leaders.

Strengthen systems.

Build a healthy culture.

Develop future leaders.

Connect everyone's work to the cooperative mission.

That is how we build human capability.

 

3. HR Operating Model

From "Having an HR Department" to "Having an HR Way of Working"

This is particularly relevant to our MSM cooperatives.

Some may say:

"We only have one HR person. How can we possibly do all these things?"

My answer is:

You don't have to do everything at once.

And you don't have to do it alone.

HR is not only the responsibility of the HR officer.

The HR staff may coordinate HR activities, but people management is a shared responsibility.

The General Manager has a role.

Department or branch heads and supervisors have a role.

The Board has a role.

And employees themselves have a role in creating a healthy workplace.

A small cooperative can begin with the basics:

• Hire the right people. 

• Give new employees a proper orientation. 

• Set clear expectations. 

• Give regular feedback. 

• Provide opportunities to learn. 

• Recognize good work. 

• Address performance issues early. 

• Prepare people for future leadership. 

• Apply policies fairly and consistently. 

• Connect employee performance to member service. 

These may sound simple.

But simple practices, done consistently, can create significant change.

You don't need a large HR department to practice good HR.

You need people who understand that developing and managing people is everyone's responsibility.

 

4. AI as an Enabler

From Technology Trend to Practical HR Assistant

This is probably the pivot we hear about most today.

And interestingly, I believe AI can be particularly helpful to small cooperatives with limited HR resources.

Imagine having only one HR staff—and that person needs to prepare a job description, develop interview questions, create a training outline, draft an employee communication, analyze survey responses, or prepare an HR report.

AI can help.

It can reduce routine work.

It can help organize information.

It can generate ideas.

It can assist in preparing documents and reports.

It can support learning and development.

For a General Manager who is also handling HR, AI can become a very useful assistant.

But we must remember:

AI is an enabler—not the decision-maker.

AI can provide information.

AI can provide suggestions.

AI can help us work faster.

But it does not know our members the way we do.

It does not understand the history and culture of our cooperative in the same way our people do.

And it cannot replace our responsibility to make fair, thoughtful, and compassionate decisions.

This is particularly important in cooperatives because our work is ultimately about:

People helping people.

So, let us use AI to reduce administrative work and give HR more time for what really matters:

developing people, strengthening leaders, and serving members.

 

The Four Pivots Come Together

When I look at these four pivots from a cooperative perspective, I see them not as four separate HR activities but as one connected journey:

The ultimate question is not:

"How modern is our HR department?"

The better question is:

"How are our people practices helping us create better value for our member-owners?"

 

A Different Definition of HR Success

There is one important distinction that I believe every cooperative HR practitioner should remember:

"In many corporations, HR creates value for shareholders. In cooperatives, HR creates value for member-owners. That single distinction changes how we recruit, develop, reward, lead, and ultimately define success."

This is why cooperative HR cannot simply copy everything that corporations are doing.

We can learn from them.

We can use their tools.

We can adopt good practices.

But we must always ask:

"Does this practice fit our cooperative and help us fulfill our purpose?"

Our measure of success is not only how much profit we make.

It is also about whether our cooperative remains financially sustainable while making a meaningful difference in the lives of our members.

And this is where HR becomes very important.

When we recruit the right people, we strengthen our cooperative.

When we develop our employees, we strengthen our service.

When we develop good leaders, we strengthen our future.

When we build a healthy workplace, we strengthen our organization.

And when our people understand the cooperative mission, we strengthen the reason why the cooperative exists in the first place.

 

You Can Start Where You Are