Leadership Transition Discussion with Oak Street Funding
September 26, 2023 •Oak Street Funding
In 2003, Rick founded Oak Street Funding because he saw a need for cash-flow based lending in the insurance industry. The company has experienced exponential growth and was acquired by First Financial Bank in 2015. In 2021, Rick assumed significantly increased responsibilities which created an opportunity for someone to fill the role of president at Oak Street Funding. Alicia Chandler was promoted from Chief Legal Counsel to president of Oak Street Funding in July of 2022. This transition allows Rick to focus on the strategic outlook of Oak Street Funding while Alicia focuses on day-to-day operations.
1. How do you build an effective team?
Alicia Chandler: I believe the key to building an effective team is selecting people that fill in the knowledge gaps. I don’t know everything, so I want a team that can help me in the areas I don’t understand.
Rick Dennen: The key to an effective team is trust. SEAL Team 6 evaluates potential candidates based on a 2-axis matrix where the y-axis measures performance and the x-axis measures trust. The more trustworthy candidates are chosen over less trustworthy candidates even if they score higher in performance. Having a team you can trust helps the organization move forward together and eliminates territorial issues.
2. How do you retain employees and encourage their personal growth?
Alicia Chandler: To retain employees, encourage their personal growth and develop strong personal and professional relationships with them. We identify people’s strengths and capitalize on those while coaching them on weak areas. This helps us as a team to work together better and motivates employees.
Rick Dennen: We allow employees ample opportunities to pursue their personal and professional development. We typically train and hire for leadership positions internally. This motivates younger employees to stay and work to reach the next level. So, we provide lots of training for leadership positions to those that are interested.
3. How do you navigate shifts in leadership?
Rick Dennen: When considering a succession or transition, you have to want the next leader to be successful. That means taking the time to prepare them for the role and investing in them. Challenge the idea that you are the only person that can run the company and instead let the next leader come into the role with their own style and ideas.
Alicia Chandler: I’m not a micromanager. I expect people to do their jobs well and if they aren’t, I will meet with them to figure out where the disconnect is. Being curious about people and what is going on in their lives is key to overcoming bumps in the road during leadership shifts.
4. What process did you follow when planning and executing transition?
Rick Dennen: Transparency has always been paramount at Oak Street Funding. You lose credibility if you aren’t transparent, so we’ve always been open with employees each time there has been a transition. As Alicia took on the role, I took gradual steps away from making all the decisions and let her lead in her own style.
Alicia Chandler: When I became president, I had many open and honest conversations with the management team. They were used to reporting to Rick for the last 20 years, so I wanted to be clear about my management style and how I might differ from what they were used to. These meetings helped set expectations and built us stronger as a team.
5. What goals should business owners set in pursuit of growth?
Rick Dennen: The first step is to align goals with the objectives of the company. Secondly, do the goals align with the mission and values of the organization? This alignment is key to ensure the goals meet the expectations of stakeholders and employees.
Alicia Chandler: Define how you want to grow, then set your goals in stages to reach that level of desired growth. If you want to grow by increasing revenue, focus your goals on originations. Or, if you want to increase your employee count, align your goals with that strategy.
6. How do you motivate and ensure organization-wide alignment on growth strategies?
Alicia Chandler: We have regular strategic meetings with the entire management team. Open communication is key in these meetings to ensure buy-in from everyone. Any ideas are open for discussion because we don’t want to stifle an idea that could be key to our growth.
Rick Dennen: We begin with a SWOT analysis to determine the areas that we need to focus on. Then, we create a strategic plan to address those areas. The plan includes accountability measures and is tracked throughout the year to maintain alignment. This process aligns everyone on the management team and has proven very effective for Oak Street Funding.
Disclaimer: Please note, Oak Street Funding does not provide legal or tax advice. This blog is for informational purposes only. It is not a statement of fact or recommendation, does not constitute an offer for a loan, professional or legal or tax advice or legal opinion and should not be used as a substitute for obtaining valuation services or professional, legal or tax advice.