Craig Esrael, chairman of the board of PSCU Financial Services,said a succession plan made years before had helped lead the giantpayments CUSO to choose a relatively little known payment executiveas its next CEO.

The nationwide payments CUSO named Michael Kelly, a paymentsexecutive with Fiserv, as its new CEO this week. Kelly had beenFiserv's general manager of its payments network.

Esrael, president/CEO of the $369 million First South FinancialCredit Union of Bartlett, Tenn., described how the members of theboard consulted PSCU's detailed succession plan, even as theygrieved the death of former CEO David Serlo.

Serlo had been the CUSO's first employee and served as theorganization's CEO from the early 1980s until he died fromcomplications of cancer. The board named long-term executive MikeYatros to serve as interim CEO until the search was completed.

“I had known Dave for years and we were great friends,” Esraelsaid. “And literally several of us were still grieving when we gotthat plan out and started to go through it, but we knew that waswhat we had to do.”

Esrael explained the board and Serlo had first created the planmany years ago and that it had been updated last about three yearsbefore Serlo's death. The plan laid out a general guideline of whatthe organization should look for in a successor to Serlo, but wasnot too specific when it came to how the board should accomplishthat goal.

Among the first questions the board faced, Esrael explained, waswhether to look within the credit union industry or outside it forsomeone to guide the group–and that, in turn, would help drive theexecutive search firm they would choose.

“After considering it carefully, we decided that PSCU has such acredit union focus–it is owned by credit unions, its members andclients are credit unions and it has credit union values at itscore–that we had to choose someone from within the industry whowould at least be familiar with credit unions and how we work,” hesaid.

Only one of the board's criteria for a new CEO had anything todo directly with experience in the payment's industry, Esrael said.The bulk of the criteria had to do with a candidate havingleadership qualities like charisma and eloquence. “We wantedsomeone who people could think of when they call PSCU FinancialServices to mind,” Esrael added.

With the help of a search firm, the board soon gathered 200written applications that laid out the applicant's responses to aset of specific questions. How each applicant answered thequestions had been up to them, and Esrael reported the applicationsran from between 30 pages and 200.

The applications provided a basis the board used to winnow downthe number of applications before starting upper level, formalinterviews. The search firm had already conducted initialinterviews, he said.

Even though no one on the board knew Kelly or had worked withhim previously, Esrael said that the payments executive won theboard over with the connections he made with board members and theshared vision he had of the organization and its future.

“It was clear that he and the board were in widespread agreementon where the organization could and should go and what it couldtake to get there,” Esrael said.

Kelly had worked for Fiserv twice, rising the first time tobecome manager of business development for the technology andpayments firm before leaving to found and became CEO of a companycalled ePayments Consulting Group, and then coming back to Fiservas general manager of payments network.

As president of ePayments Consulting Group, Kelly “devised andimplemented innovative strategies to help financial institutionscapitalize on their debit portfolios to grow their noninterestincome,” Fiserv said when he returned.

Fiserv's payment networks saw record growth in the numbers oftransactions while Kelly was general manager of paymentsnetwork.