The Elephants in the Room- Changing Our Culture To Our Landscape

Who Are We Exactly ?

The credit union movement is one of the most dynamic and diverse movements in business today. If you were to attend a credit union chapter meeting you would find leaders from multibillion dollar credit unions sitting at the table with credit unions with just three to four people. The challenges for each of them are very unique. The billion plus dollar credit unions have to deal with scale and increased complexity that comes from having so many members and assets. The small credit union struggles with equally daunting challenges but on the opposite side of the equation as they struggle with little money and tight budgets. For them the question of the day is how they can get an extra printer or a new desk to replace the equipment that is on its last legs.

What Keeps Us Up At Night ? Our Members ???

If you were to poll the group of leaders in a local chapter meeting on what keeps them up at night some would say credit unions need to be focused on small business lending and raising the cap, others might say we need to be talking to lawmakers about alternative capital or the state of corporate credit unions and their need to consolidate and create economies of scales. As fascinating as those topics are a central issue for credit unions is learning to really listen and talk to their members about the value of their services and products. A silent credit union who masters the business of “order taking” is only as good at serving their members as the member is in understanding their own unknown needs. Simply put- members are not financial service experts- they simply don’t know what they don’t know.

Part of the challenge of the debate on "sales" is that credit union’s foster incredible loyalty in their employees and leaders. When speaking to a leader of a large credit union about culture they stated, “We do not hire from the outside except of entry level positions.” You could  appreciate the sense of pride this person felt when he stated he was a branch manager and had been with the company twenty four years. This company was his first job out of college and was central to how he defined his career success. This type of talent pool strategy is not unique to this one credit union. There is undeniable strength in the strategy that the executive management team is able to make sure outside influences don’t change the core culture. On the flip side there are equally daunting drawbacks as the downside to this strategy is that change is a fact  and we all have to adapt to changing external business conditions and market forces.

Just in my short career I and many of you reading the blog have seen financial service industry grow more complex. Big Banks have not stopped in their relentless pursuit of market and wallet share. Twenty years ago there was no Citigroup or Bank of America as we know it today. The players on the field have changed and their tactics have improved in their ability in parting members from their wallets. What does it look like on the other side of the fence?  If you could be a fly on the wall in the Big Bank boiler room what would it look like? Here is my experience that I would like to share as a point of perspective.

A Peek At the Dark Side 

In 2004 a Big Bank opened a new call center two counties away from my home to handle one of their multiple billion dollar card portfolios. The building was a state of the art facility that would house over one thousand associates. Each entrance had an eye scanner that scanned each person’s pupil before allowing them into the building. I was hired as one of the first service and sales managers for the new operation. The day I walked into the building the leadership staff was non-existent except for a newly promoted site Director and one very overworked Human Resources officer. Walking into the empty building and seeing line after line of phone pods I could not help but wonder how we were going to get 600 people hired, trained and operational for Christmas shopping which was six weeks away.

The central task was to train associates to handle incoming calls and answer the typical questions that cardholders have regarding their credit card. This type of activity is typical of most large credit card providers in the industry. If you were to listen in on the call you would hear the associate use carefully selected care phrases (“Mr. Customer, I would be glad to take care of that for you.” or “Thank you for being a Big Bank card member”)  to let the customer know how much their business is valued. This is a standard in the industry as credit providers compete for the same customers that rotate in and out of the various credit card portfolios.

The real challenge comes at the pivot point in the conversation where you have handled the service request and the member is looking to exit the call. This is where some credit unions would end the conversation by thanking the member for being a member of the credit union. This is not where the Big Bank customer service agent is trained and incented to end the conversation. 

The Pivot Point 

The Big Bank associate is trained to continue and using verbal cues from the customer presents an additional product or service for the customer that they might not be aware of. For example, you might have an associate talking to the card holder about the company's card reward program. The associate answers all of the card holders questions and then reads a statement exactly word for word detailing the program and the terms and conditions. Once the card member has agreed the associate clicks the button and then marks down a sale. What the cardholder did not know was that sales associate just made four dollars on that call for adding the reward program.

This is an example of Big Bank “needs based selling” that many card providers are now doing in their call centers. This activity is not something that happens randomly. The associates involved are incented per sale and have desktop prompts that list the next most profitable sales opportunity for the company. The expectations are that associates in this operation would make an offer at least seventy percent of the time. This means your members who have any Big Bank relationship are being bombarded with sales presentations. This does not count television, radio, and web advertisement.

Why Our High Moral Ground Hurts Our Members 

You could have better rates on your credit card, you might even a better rewards program that does not rely on twenty or thirty percent of the users having their points expire. Yet, if your members are not asking you about it and you are not expecting your staff to educate members on it then what is the value of your program to your membership? Your cultural stance on not "selling" to your member has allowed them to remain with a Big Bank product or service that cost them more money. 

So how do you combat this stream of misinformation that is bombarding your members? You have to create a version of service that proactively educates and empowers your membership as they interact with your institution. You have to create an cultural intervention for your staff. The intervention needed is not one of organizational structure but is rather one of culture or operational environment. 

Cultural Change - One Bite At a Time 

This type of cultural change will require the initiative to tackle educational gaps and the definition of what your staff view as a collaborative culture. David Nadler, author of Champions of Change,  wrote about the subtly of the word culture, "In the 1970's and '80s, as U.S firms struggled desperately to figure out why Japanese companies were becoming global powerhouses, some observers seized upon 'culture' as the key ingredient in the Japanese recipe for success." Nadler continued, “The term took on outsized and ambiguous, almost mystical, connotations" The author then provided the substitute term of “operational environment”.

To create this operational change you must address three areas of the operating environment the first being artifacts. Artifacts are observable behaviors, these artifacts are in fact overt manifestations of your credit unions values and beliefs.  Stop and think about the visual experience your staff has when they walk into their work space.

• Are there posters on the walls, papers on the glass doors or windows of manager offices highlighting the member successes they have achieved?
• Does the space around them encourage them to educate and empower your members? For example, when a person walks into the sales offices of an automobile dealer it has a feeling of deals and negotiation in the air. No one is surprised to see someone purchase a car. In contrast, to walk into a law office one would not expect to hear the buzz of capitalism as people haggle over the price of a product.

This same type of change was needed when I walked into the Big Bank operations area. The site was intended to be a customer service and sales site. However, the sales portion was missing from the organizational artifacts. A sales force feeds on energy as each person competes with peers or with themselves to present with enthusiasm a product or service that a consumer is not aware they were initially in need of. Back in 2004 looking around the Big Bank operational floor there was nothing to make you think that people were expected to do any sales. This in turn provides an excuse for those who are not engaged in trying to sell.

Our first step was to change the artifacts on the floor. So we did the following things:

• Giant message boards were placed on the walls. These boards will list top sellers and publicly recognize those associates who are meeting the sales goals.
• Created an "atmosphere of urgency". To accomplish this, associates need to understand the site's performance in comparison with the other twelve Big Bank sites. To create this awareness management displayed where the site's performance was in comparison to other sites.

Values - The Bridge from Vision Statement to Agent Conversation 

Real change has to impact the values of the operation. This level of the operating environment is the organization's espoused values. These are public expressions of what people value as important in your organization. An example of this is our credit union vocabulary. We don’t have "customers" we have "members". We are not banks we are credit unions. To impact this level of the operating environment staff need to hear and learn to speak in context to what the values represent.

How do you change this? You have to start to interject into daily conversations the key metrics and drivers that you expect your staff to be aware of to reach the desired outcome for your department.  Staff need to be able to define in words what success will feel or sound like. A good starting point is to redefine the “key words”.  So going forward “sales” are a chance to “match member needs”. 

Give your staff defined principles to value and follow. The expectation when talking about credit union products and services are that conversation should be based on the context of the conversation in front of the staff member. The goal is to educate and empower members to make informed decisions on the level of economic participation they want with the credit union. 

Celebrate member success stories in which you made a difference to a member. Send them all the way to senior management. Put them on your intranet. Write a blog post about them with your membership and post it on that new Facebook page marketing talked you into. Promote and recognize the values you want to reinforce in the culture you are creating.

As you stop and consider the billions of dollars our members are paying to Big Banks for auto, mortgage, and revolving credit the question of sources for additional capital come into focus. Consider the billions of dollars parked in low interest Big Bank savings accounts and our members oblivious to the power of real economic cooperation. Those are the questions we have to answer. Those are the billion dollar elephants in the room that no one wants to talk about.

Each of us owes it to our membership to educate and empower member owners on the powerful principles of economic cooperatives.  We have to be able to move past credit union charm to real economic empowerment by educating that member in front of us on the value of being a member owner of a credit union.

Don’t just read the blog share your comments and opinions. This blog is meant to be a cooperative experience for us all.