Does Your Credit Union Understand Its True North ??

Understanding True North
I was reading an article recently that described a lesson that a young fighter pilot learned in his flight school training. The writer recalled that as a new untested pilot he and his fellow classmates were given strict instruction by his flight instructor to avoid flying acrobatic patterns at night. The reason was that they were all beginning pilots without instrument flight training. 

While the pilot who recalled this advice executed the training strategy he had been given, another promising pilot and a close friend chose to disobey those instructions. As this new pilot flew loops and barrel rolls through the night sky over Texas, he looked through the cockpit canopy and thought he saw stars above him, but he was really seeing the lights of oil rigs below. He was experiencing vertigo: the g-forces on his plane made it seem he was right side up, yet he was upside down. As he pulled up on the stick to climb higher into the night sky, he dove toward the earth and crashed into the twinkling lights of the oil field below.

The author then explained, “When you are flying an airplane, if you change your position by just one degree at a time, your inner ear cannot detect the change." The same concept is true for us as leaders, either new or seasoned, when we practice selective visioning and change our position relative to our core values —even if we only do it one degree at a time. Just as the concept is applicable to us as leaders so to are the dangers. As our own self deception clouds our ability to understand changing market and economic conditions we can experience our own corporate vertigo. While it may seem like we are moving in a safe direction, we are in fact headed for disaster.

A clear example of this is when Wachovia purchased Golden West in a 25 billion dollar deal that moved the company culture away from the core principles that had enabled the company to grow. This same blindness to understanding it mission and values steered the company towards disaster as it incented it’s loan officers to push option adjustable rate mortgages. Even as the mortgage market began to deteriorate the company continued to promote and drive its “Pick a Payment” loan product.  In the end the company become focused on a  myopic and relentless pursuit of size that spelled its downfall. Shareholder value was destroyed, employee retirement plans in company stock vanished.


What is Our Mandate 

There is a fundamental lesson for all of us in financial services to consider. What is our mandate?  As management teams meet in the next couple of weeks and months new business plans will be developed. People will focus on tactics, growth and on net worth. Metrics will be created to measure progress. Sub committees will be formed to identify tactics. It is important that all of us in the credit union industry not forget or ignore the lessons that many Big Banks have learned at a dear cost.


In world of “Too Big To Fail” credit unions have to be vocal about the value they bring to the financial services spectrum. As Big Banks look to augment interchange and courtesy pay revenue with new and elaborate fee structures (say goodbye to free checking) credit unions have an opportunity to prove that local community financial institutions can succeed by focusing on the member owner and following the mission statements printed on the inside of the cover on their annual board packets.

Some of the most committed and passionate leaders in financial services lead small credit unions and firmly believe they can go up against Big Banks who employ tens of thousands of employees. Not only do they go up against them in the same markets – they dare to think they can grow shares, loans, membership, and net worth! To me that is one of the most admirable traits of being a credit union leader. I honestly believe that the only way to beat a Big Bank in your market is embrace that you are not a Big Bank. That you offer a clear cut difference and alternative to business as normal with “Too Big To Fail” institutions.

Practical Application:

• How do you stay centered on your “True North” and not get distracted by all the hype and “false stars” that surround you and your organization?
• How do you focus on your circle of influence and not get lost chasing wrong initiatives down a wrong direction?
• How do your staff articulate the services you can offer your membership so they understand they don’t need a Big Bank?