The Problem With Looking Inside Out

One of my first jobs in the credit union community was as a teller at a credit union in Maryland (part time – they didn’t trust me enough to be around money full time). Once employed, I of course became a member of the credit union. My experience as a member, however, was nothing like the experience of other members.

Here is an example. I once had to deposit a check I received in the mail. Most members at that time would have driven to the branch, walked in, completed a deposit slip, waited in line, etc. to make such a deposit. I simply gave my paperwork to the head teller with instruction to deposit it to my account. No waiting!

Why does the difference in experience matter? Who cares if a member and an employee have distinctly different processes of interaction with credit union service?

I’ll answer that question with two illustrations.

First, another employment experience. About two years after joining the credit union community I was working in the call center of another credit union in Virginia (yep – AWAY from the cash!). A member called in to ask how to use an ATM the credit union owned in Washington, D.C. I was stumped. I was stumped because I never used our ATMs. As an employee, my interactions with our account access services consisted of doing the same thing I had done as a teller. Namely, hand my stuff to the head teller to process.

I put the member on hold and asked around. No one in the call center knew how to use that ATM either. We ALL interacted via back office connections. NONE of us used our ATMs. The member was left in the lurch.

To my second illustration. This one has to do with failed mergers, which is a topic of great interest today given the news of two different mergers failing to win member approval via the voting process.

In the case of both attempts, the communication to members describing the value of the merger left a lot to be desired. What I believe is that the individuals drafting the communication to members regarding the benefits of these mergers left out answers to key questions members were likely to have. I do not believe this information was left out intentionally, omitted by design, but rather left out because of the assumptions made when creating the material.

Consider the statement below, communication regarding the rationale for merging sent from a credit union involved in one of the failed merger to its members:

The main reason for a merger is to enhance the services, convenience and benefits to members of both credit unions and the communities we serve.

This makes great sense if you are the credit union, but only because of what you foresee happening as a result of the merger. Such foresight is formed as merging credit unions discuss the opportunities a merger would bring about. There is a bright, shining future embedded in the statement above…but unfortunately you have to be an insider to see it. Members are not insiders.

“Enhance the services” and “convenience and benefits” are likely references to something grand and specific – only members are left in the dark about those specifics. Darkness enhances the fear of the unknown…and perhaps leads to being “paralyzed with fear.” If you are paralyzed, you don’t move.

Now, the members of these credit unions were probably not at that level of fear, but nonetheless they were certainly resistant to change. What they knew seemed perfectly fine when compared to the vague promises of what they might get via a merger. The “unknown” may have been a major motivator for some to vote no.

All this is to say that credit union leaders too often make decisions based on insider perspective, all too often communicate to members based on insider perspective, all to often deliver service based on insider perspective. Sometimes this works out, but more often than not it leads to disconnections between a credit union and its members/owners.

Every now and then, make sure to take a look at your strategies and plans for execution from the outside-in, and assume nothing when you do this. You may find that what you are saying to members through your efforts and actions make no sense to anyone but you.

For a great article of where disconnections lead, read “Why Best Buy is Going out of Business…Gradually” by Larry Downes at Forbes.


  1. Tom, I read your comments in regard to Main Street Financial and you missed the mark in saying our members were not informed about the financial struggles, we always provided full and honest reports to the members in the annual report. In addition members were sent special letters updating them on conditions. Before making broad statements you should check out the facts. I left the credit union on December 1st and do not know how the board sold this to members. Apparently it wasn’t done right. I think the merger regs need to be updated to provide more time between when ballots are mailed and the merger meeting. I would go as far to say that special informational meetings should be required so all members can ask questions and voice an opinion prior to the vote.

    1. Cary…

      Thanks for your comments. Just to be clear, I never said that members of Main Street Financial were not informed, only that to look at what information is publicly available on the website you would never know that the credit union was entertaining a merger, or that times were tough. I suppose one could argue that such information is not appropriate for public consumption, but I disagree with that viewpoint.

      In any case, I do agree with your thoughts on implementing processes designed to offer back and forth dialogue with members on proposed mergers. It would certainly help boards gain that “outside-in” perspective I advocate in this post. I also believe that any credit union undertaking a merger would do well to use the Internet more broadly for building the case to merge than most credit unions do today. The Internet and its channels are valuable communication vehicles that can be used to great effect in strategically positioning organizational decisions.


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