I recently spoke with a CEO of a small credit union about a possible merger. We got to talking about the role of CEO and the demands on this particular CEO specifically. He told me that no one could do his job, suggesting that he was irreplaceable. I was curious, so I asked what he did that made him so unique. He said…
- I go out and open new accounts as our business development officer;
- I run a teller drawer on busy days;
- I sit in the branch and talk with members as they come in;
- I do things for members that most CEOs don’t do.
He also added that the demands on CEOs brought about by regulatory changes, technology, and competition were taking away from the tasks that were really what a credit union CEO should be doing (see above). He closed by saying that the members really loved his dedication to helping them find solutions to their financial needs, and that no one (no other CEO) could do what he did.
He was right in a certain respect. No other “CEO” could, or would want to, do what he does. While all of these activities are unquestionably good, the question is really whether they are the domain of a Chief Executive Officer. In my opinion, they are not.
Yes, CEOs must step in at certain points to ensure that the work gets done, however in this case the CEO made “stepping in” a regular routine – to the detriment of the credit union itself.
This post is not really about a particular credit union, but the way in which some credit union leaders are approaching the more complicated environment in which we must operate. Take the constant lament from some in the industry that credit unions must stick together, cooperate, do more to help each other out.
When I hear when some people say “credit unions need to cooperate more,” I hear less a plea for cooperation that a plea to make it easier for some credit unions to maintain the status quo. That is a nice way of saying, “Make the job of credit union leadership easier – like it used to be.”
I believe that some credit union CEOs (the one I referenced earlier included) would very much appreciate it if the credit union community as a whole would cooperate/take on the challenges of marketing, branding, compliance, advocacy, and strategy – but for the purpose of simply making that CEO’s job more like that of a branch manager (no disrespect to branch managers intended).
Great examples of credit union cooperation exist across the industry. From various mortgage CUSOs to the recent efforts of CU Roots – a back-office collaboration between a handful of western credit unions – credit unions are collaborating to address the cost implications of compliance, workflow inefficiency, and more complicated products. Unfortunately, some CEOs, most notably CEOs of a segment of small credit unions, are not looking to cooperate to move forward. They are looking to cooperate to hold back, to keep things as they are (or were). Credit unions should cooperate, but to strengthen competitive and pricing advantages – not to help out CEOs who are not really interested in truly leading their credit unions into a bright future.
I am in compete agreement with those that think of this time as a golden opportunity for the credit union community. Consider this:
- In member surveys conducted by Glatt consulting, LLC, we find that GenY’ers tend to hold as favorable an opinion of credit unions as those in much older generational demographics. Further developing these relationships is a great opportunity for credit unions.
- Baby boomers are rediscovering the value of credit union products and services, not to mention finding trustworthy confidants in a caring contingent of credit union staffers. These relationships present a great opportunity for credit unions.
- Credit unions are coming to a more solid understanding of workflow analysis and efficiency, in effect getting better at delivering products to members in ways that allow for very competitive pricing and service execution. Such well-positioned credit unions present a great opportunity for industry growth.
To those small credit union CEOs (and boards, for that matter) that are looking for cooperation to keep the job simple, I say turn in your keys. The industry is being held back by your reluctance to lead your credit union into the more complicated, yet fertile, future that awaits us.
While I would never encourage one credit union to turn its back on another, I definitely think that it is time for some tough love. The industry as a whole needs to challenge those leaders that want to hold back, that want to keep the credit union community as it was 20 years ago.
That credit union I talked to? They did end up merging. After seeing declining membership in 33 of 38 quarters (even with the business development expertise of the CEO), rising expenses, and no “suitable” candidate to replace the CEO, it made better sense to turn it over to someone else. In the end I suppose this was the right decision, though I have to wonder if a different CEO was at the helm, a CEO that focused more on the strategic success of the credit union than on a daily task list, if that credit union would be here today. Given the field of membership they had, their location, and a host of other factors, strong executive leadership would have made all the difference in the world.