Credit Union Inspiration: Looking Beyond The Mark

Light and Inspiration
Have you ever been reading in a room as the warm afternoon light slowly dimmed? Often you don’t even notice the dimming of the light until someone walks into the room. Puzzled they ask you why you are reading in the dark and then flick on the light switch. In an instant a bright flood of light fills the room and shadows that had been advancing on you disappear. What previously had been dim and hard to see suddenly becomes clear and recognizable. In this experience the light can be characterized as immediate and intense. Compare that experience of an early morning sunrise. If we were to stand together and gaze at the horizon and watch night turn into morning what would we see? Almost every time I have tried this I always miss “the moment”. I seem to get lost in my thoughts and miss the slow and almost imperceptible increase in light on the horizon.In both cases the result is the same – increased light. In contrast to turning on a light in a dark room, the light from the rising sun did not immediately burst forth. Rather, gradually and steadily the intensity of the light increased, and the darkness of night was replaced by the rays of early morning. 

As we have all come to expect the sun did dawn over the horizon. Oddly though the visual evidence of the sun’s arrival was apparent hours before the sun actually appeared over the horizon. In this experience the light can be characterized as subtle and gradual.

From these two everyday experiences with light, we can learn much about the nature of leadership and inspiration. Inspiration can come in a variety of ways sometimes it comes in a flash of insight and it is immediate and intense. Yet, at other times inspiration can come in a much more subtle and gradual manner. The two experiences with light I described help us to better understand these two basic patterns of understanding our own inner voice and how we perceive inspiration.

A light turned on in a dark room is like receiving that bolt of insight from the universe all at once. Many of us have experienced this pattern of inspiration as we have been given answers to questions or business issues we have studied or pondered.


If you were to talk to other leaders around you and question them regarding their own experiences regarding inspiration you might hear words such as immediate and following a “gut feeling”. Many business case studies are filled with random flashes of insight that dramatically changed the course of the company’s strategy and direction. While there is no doubt this bolt of lightning can occur the reality for many of us is that this pattern of dramatic inspiration tends to be more rare than common.


If you are anything like me then the gradual increase of light radiating from the rising sun is like receiving a letter from the universe with a snappy joke at the beginning and then a much more subtle “line upon line, precept upon precept” type of instruction or insight. For me big, grand, strategic visions seem to come in small increments over time. They tend to follow according to my desire to move forward with the knowledge that I already possess. To take risks and then step forward knowing the next answer is around the corner. 


Looking Beyond the Mark
As leaders we tend to extol the dramatic flashes of insight so much that we may fail to appreciate and may even overlook the customary pattern by which the inspiration actually happens. Too often the simpleness in receiving small and incremental impressions from hallway conversations with peers or staff that over time act as breadcrumbs to a desired answer or the direction we need may cause us to look “beyond the mark”.

I have talked with many individuals who question the strength of their visionary abilities. They often underestimate their strategic capacity because they do not receive frequent, miraculous, or strong impressions on how they should lead their business units. I believe these individuals are being too hard on themselves and simply do not recognize how they receive inspiration.

Another common experience with light helps us learn an additional truth about the “line upon line, precept upon precept” pattern of inspiration. Sometimes the sun rises on a morning that is hazy or foggy. Due to the overcast conditions, seeing the light is more difficult, and identifying the precise moment when the sun rises over the horizon becomes a fool’s folly as it is not possible.

That being said even on such a morning we have sufficient light to recognize a new day and to chase after our widely important goals. In a similar way, we many times receive inspiration without recognizing precisely how or when we had our flash of insight.

Gathering Inspiration- One Bolt of Lightning at a Time
As we all come out of lending season it is time to start thinking about what strategic initiatives we need to be planning for. As you draw up your list I would challenge each of us in the credit union industry to look beyond the mark. Our members live in a world of payday lenders and big banks that are focused on building branches based on tiers that insure that the customers with the most money get the most service while those with no money get nothing but self service. 

As we look around for inspiration we have to be willing to widen our circles in which we collect knowledge. We have to be willing to look across channels and other artificial boundaries. As we do this we are able to find sources of insight that allow us to collect that "bolt of inspiration" one bolt of lightning at a time.

A place to start is to consider your own organization and how it mentors upcoming leaders? The reason this is critical to gaining personal inspiration is that it allows you, as a mentor, to formalize the lessons of your own career experience. As a nice side benefit you often will be surprised to find yourself learning from them as you recall life and leadership lessons you have not applied in some time.

As leaders we have to be able to stand ready for those moments of blinding inspiration. We have to be able as credit union thought leaders to be able to move those ideas into action. However, if we only stand ready for the occasional flash of insight then we doom ourselves to spend much of our working careers not looking for inspiration at all. We have to be able to discern inspiration in both its boldest manifestations as well as it most subtle.

Credit Union To and Fro: How Focused Is Your Credit Union

A story is told of two men who formed a partnership. They built a small shed beside a busy road. They obtained a truck and drove it to a farmer’s field, where they purchased a truckload of melons for a dollar a melon. They drove the loaded truck to their shed by the road, where they sold their melons for a dollar a melon. They drove back to the farmer’s field and bought another truckload of melons for a dollar a melon. Transporting them to the roadside, they again sold them for a dollar a melon. As they drove back toward the farmer’s field to get another load, one partner said to the other, “We’re not making much money on this business, are we?” “No, we’re not,” his partner replied. “Do you think we need a bigger truck?”

In today’s credit union there are thousands of things to focus on. Thanks in part to modern technology the contents of various reporting services and other database resources are all at the fingertips of many of us. Too often it is easy to find ourselves spending countless hours mindlessly following data streams down various rabbit holes or scanning other avalanches of information. One would be tempted to ask, “To what purpose?” Those who engage in such activities are like the two partners in the story, so busy loading and unloading melons onto a truck and then hurrying back and forth to the roadside store. They spend each day hauling more and more but failing to grasp the essential truth that we cannot make a profit from our efforts until we understand the true value of what is already within our grasp.

As many of us are in the middle of our lending season we followed all those reports down the rabbit holes to conclude lending growth is more of a challenge and so we are all looking for the magic bullet that will give us the loan growth we budgeted last fall. The temptation is to go to the product manual and come up with a new gimmick or product feature that will create a new wave of member lending. However, a less glamorous solution is to look at our leadership teams and then consider the amount of focus they have. Are our teams acting like the two men in the story trying to decide to buy a bigger truck or maybe keep the same ole truck but just “paint it'?

Yet, if you were to pull your leadership team members together and have them list the top challenges and tasks for the week would you find them focused on the items that are your most pressing goals?

This topic of focus has been on my mind since I read the story of Army Ranger Joseph Kapacziewki who was injured when an enemy grenade was dropped into his armored vehicle in Iraq. His body was severely injured. His lower right leg was shattered and his right arm left useless with extensive nerve damage. It seemed that no part of his body was spared by the blast from an enemy’s grenade.

In 2005 when doctors worked to help mend his shattered limbs the easy prognosis was that this was a Ranger who would not run into battle again. That prognosis was not one that Joseph shared. It certainly was not the prognosis he choose to focus on.

His story is a testament to the ability to focus on a singular goal. When he learned that his body had a natural intolerance to morphine he endured countless hours of pain as he mended from each surgery. I marvel that his first thoughts on getting his finger to twitch was to have his wife wheel him down to the hospital's practice firing range with a laser-equipped M-4 rifle. For hours every day, he would lie behind sandbags and fire the weapon, retraining his hands and fingers that had lost feeling how to once again handle a weapon.

There are no comparisons between what this man endured and with what we endure in our day to day lives. However, there are lessons to be learned on the power of focus. We can learn to see past the potholes in the road and focus instead on the blue patch of sky ahead of us.

I have seen leaders like this who refuse to accept the status of just being good. They drive for results and have the expectation that those around will also drive for results. They have the ability to see past the mindless activities of day to day operations and ask clarifying questions that help others zero in on the core mission of what the group is trying to accomplish.

My challenge to you is to ask your leadership team, “What are we trying to accomplish?” The next question is what can you do to remove the clutter that is on the table so that the only thing your team is looking at is the very thing you are trying to do?

As credit unions we are at times so preoccupied by what the bigger credit union or the Big Bank is doing we forget to take a hard look at what we ourselves are doing. We work in a time when it is easy to focus on why it is too hard to succeed due to a tough economy. We read blog articles that make excuses so that we can settle on just being “old fashioned” credit unions. The price of not knowing what to focus on is measured in credit union members having to settle for less...to expect less from you each and every day.

Are you like the two men in the story who spend each day hauling more and more but fail to grasp the essential truth that they cannot make a profit from their efforts until they focus on the true value of what is already within their grasp.

To read more about the real hero of the story please visit

Army-Rangers-amputee-Purple-Heart

The New Credit Union Mantra: Stop Breathing !

A Bad Memory
Ever had one of those childhood memories you haven’t thought about in years come flashing into your mind and you wonder “where did that come from?”  No...well that makes this intro a slight bit awkward then doesn't it?  For me the memory was from 1st grade and I was sitting next to the meanest kid in the class. As we were working on some worksheet he whispered to me, “Stop It.” I looked at him like he had burst into Opera. “Stop what?” I asked. Glaring at me he replied, “Breathing…Stop Breathing.” So there I was sitting next to a future serial killer and thinking to myself, “how do I stop breathing.” The answer was I couldn't and so I did what any six year old from the Gulf Coast of Texas would do, I punched him as hard as I could and made a break for my friends across the classroom.


In Your Own Words

Today in credit union land we have a similar scene happening between credit unions where some credit unions seem intent on sending the same message of “stop breathing” to other credit unions within their markets.  When the article, “Credit Union Culture: Cooperative or Cut Throat” was posted I honestly expected to have people bash the article and come rushing to the defense of the credit union movement. I was sure people would talk about attending local chapter meetings and expound on the 7 Cooperative Principles. Sadly, it seems our industry is changing and many of us are unsure of the behaviors we see around us.

In reviewing the various discussion boards we posted the article, “Credit Union Culture: Cooperative or Cut Throat” on the level of responses was incredible. The following responses are a sample of the types of responses the article generated from you, the experts, on the state of credit union culture:

• “Unfortunately credit unions have changed a lot over the years in their philosophy when it comes to helping other credit union. With many CUs having expanded their FOM to community the competition and unwillingness to share has majorly increased. At least that has been my experience. There are still some that remember that we, as credit unions, are all in this together.”

• “Over the last few years I have spoken with many credit union CEO's who agreed that a majority of volunteers and CEOs alike have lost sight of their cooperative roots. The Seven Cooperative principles supposedly define our business model and the value proposition forming the heart of every credit union's brand.”

• “It's my belief that any trends displaying cut-throat, suspicious and unwilling to cooperate with one another behavior are all symptoms of losing sight of our common heritage--our cooperative roots.  Any initiatives to reverse this trend will one day be viewed in my opinion as saving the movement.”

• “…CUthroat. It's an everyday occurrence to see larger credit unions in my area push their way into our founding company - a university. You wouldn't see me walking on the site of their founding companies & current plants to sell my credit union.”

• “ As a CUDE, I am a believer that credit union philosophy is good business as anyone. That said, the world has changed; the economy tanked; the examiners have gone nuts; and successful credit unions rightly believe they need mass to survive. Healthy CU's are leveraging their capital by making merger overtures where it makes sense. Unhealthy, and small, credit unions may perceive that as cutthroat. It's survival.”

• “Community charters killed credit union cooperation. It seems that the 7 Principles guiding the industry today are growth, growth, growth, growth, growth, growth and more growth.”

• “CUs that feel that they are being taken advantage of should react. How? Grow profitably! Scale to a point where the competition - be it another CU or a Bank - can no longer abuse based on scale.”

• “Nonprofit status does not mean that the competitive forces in your industry have ceased. CUs must recognize that US does not need 15,000 Financial Institutions. Not all will survive. Many will be acquired; many will fail. The question that each CU executive and Board member should ask themselves is, 'Which category do I want to be in'?”

Reading the comments above you have to wonder if credit unions have crossed a tipping point in which we slowly do to ourselves what the banks could never do to us…make us disappear. Much like the school grade bully who threatened every time someone around him took a breath many large credit unions have sought to grow no matter the cost to themselves or to the movement as a whole. They have pulled back resources from smaller credit unions and have circled the wagons around themselves.

In the past I would have shaken my head and pointed my finger at all the talented bankers who have sought refuge and employment in the credit unions.  As much as I would like to blame the newly recruited the truth is we can’t blame converted bankers. We have to own our industry culture ourselves. Those of us who really care about the culture of credit unions have to own our own willingness to stand up for the principles that attracted us to cooperatives to begin with.

Given our current course once the dust settles we end up with a few hundred mega credit unions as small credit unions are swallowed by larger counterparts. While some might view this as inevitable the end result of thinning the credit union herd is less credit unions to compete with banks. It means fewer voices trying to make a difference.

In a world of fewer credit unions the question becomes, “Quis custodiet ipsos custodes”or “Who will guard the guards?." We all know it is the presence of community based financial institutions that keeps rates and fees in check for consumers within our communities.

The Solution Is Us

The irony of this trend is that the cooperative nature of credit unions is exactly what is needed to save credit unions. As we emerge after the economic recession we face a landscape in which the largest banks have come out with more capital and expanded market share. Credit union leaders now find themselves trying to survive with diminishing profit margins, increasing regulatory expenses, and stronger lending competition from captives.  In the face of these new realities credit unions need to turn back to their foundations and relearn to trust each other and collaborate to survive.

One way for this to happen is another recent trend of a few progressive credit unions to seek out strategic collaborations for core processing and other large budgetary expenses with other like minded credit unions.  These collaborations are founded on a common desire to gain operational efficiencies that creates economies of scale that return value to the membership of each of the credit union partners.

This model allows an alternative to the “hunt and skin” model of credit union mergers that have happened over the last three years.  As credit unions begin to research this alternative they need to start with core system alignment. The largest players in core data processing are aware of this movement and have begun to build the tools to enable this.  Jack Henry with its “PowerOn” forums or Open Solutions with its newly released “DNAppStore” have both invested in the tools to allow credit unions to collaborate directly with one another.

An example of this type of collaboration can be seen with *Open Technology Solutions (OTS) based out of Denver Colorado.  Together the individual credit unions form a combined collaboration that has over 7.6 billion in assets. This size allows for it to negotiate deeper price concessions from key vendors and then pass those cost savings back to their respective bottom lines.

As Big Banks emerge stronger and largely unrepentant from the recession it is foolish for credit unions to fight over islands of sand as banks are focused on driving profits. As banks push members into our arms with new fees we need to form the alliances that will allow us to grow in a way that complements one another.

Collaboration takes true vision and heroic leadership as management teams learn to trust one another and take hold of core corporative principles. For those leaders who have the courage and skill to navigate these new waters they will find that building large scale operations is where the real opportunity is for their members as they are able to roll out more expansive services with less cost.

To learn more about an example of an operating credit union collaboration check out Open Technology Solutions

Credit Union Blind Spots: Leadership Wedges

The Wedge
There is a story about an iron wedge that I recall hearing years ago. The legend was told by a white-haired farmer who recalled as a young boy finding a faller’s wedge. The wedge was flat, and heavy, a foot or more long, and splayed from mighty poundings.

[For those of you who do not know a faller’s wedge is, it is used to help fell a tree. It is inserted in a cut made by a saw and then struck with a sledgehammer to widen the cut.]

Now the young man who came across the wedge was already late for dinner, so he laid the wedge down between the limbs of the young walnut tree his father had planted near the front gate. As he headed for home he told himself that he would take the wedge to the shed right after dinner, or sometime the next day.

Filled with good intentions the young man meant to deal with the wedge, but somehow there was always something more pressing to attend to. Soon the wedge was firmly gripped as time moved forward and the man married and took over his father’s farm.

 The wedge, grown in and healed over, was still in the tree the winter the ice storm came. In the dark silence of that bitter night one of the three major limbs split away from the trunk and crashed to the ground. This so unbalanced the remainder of the top that it, too, split apart and went down.

The next morning in the light of dawn not a twig of the once-proud tree remained. It was to this sight that the farmer awoke. With time to only mourn his loss the man’s eyes caught sight of something in the splintered ruin of the once proud tree.

 ‘The wedge,’ he muttered reproachfully. ‘The wedge I found in the south pasture.’ A glance told him why the tree had fallen. Growing, edge-up in the trunk, the wedge had prevented the limb fibers from knitting together as they should.

Credit Union Wedges - The Core Group

Today like the farmer in the story many credit unions suffer from wedges that are embedded into the cultural fibers of their organizations. They have simply grown used to all decisions being made by a core group. Typically this group are the ones that have been with the credit union for thirty years and started as a part time teller and worked their way up to the lofty inner circles where all the real decisions happen.  

Instead of looking for ideas and solutions from others, this group sees creativity and insight as a privilege. You are either in or you are out of the process. This group of leaders unwittingly holds back the energy and talent of those around them. Instead of looking for new intellect to add to the dialog they fall back on recycled ideas that are simply versions of other recycled ideas from playbooks that worked for them “back in the day.”

Imagine what the other side of the spectrum could look like. Where would your credit union be if it had leaders that sought to unleash talent and to multiply the abilities of those around them? Picture a leadership team that actively sought how to double the brainpower of staff and managers for the good of the organization.

I came across an article that talked about how leaders can magnify and unleash the talents of others that listed the following attributes:

Attract and Optimize Talent:

When you hire talented people learn the capabilities of the individual so you can connect them to opportunities to improve the group. See beyond organizational titles and look for talent at various levels of the organization. Cultivate and reward people who seek to come up with solutions. Spot light them to the organization in a newsletter or with your internal media boards.

Create a Culture of Intensity:

The maze of titles and offices and small minded kingdoms that come with internal politics are the breeding grounds for mediocrity. You simply need to scan the newspapers for credit unions and community banks that invested everything into the talents of too few people to see this play out. They would be on the list headlined by the words “Regulators Seized”.  Peel back the label on many of these institutions and you would find managers that created tension and anxiety by suppressing the best ideas from those around them. At the first hint of danger they circle the intellectual wagons and stop communication to the very people they need the best ideas from.  

Great leaders do just the opposite by giving everyone the information they need with permission to voice their ideas on that information. This unleashing of ideas draws in people to the process. Spectators on the team are pushed to the sidelines and your natural leaders and creative thought workers get busy making things better.


Toss the Ball

If you were watching your favorite sports team (soccer, football, basketball, and baseball) you would be horrified if you saw the same person take the ball and try to win without ever giving the ball to anyone else. It would be baffling to even consider such a strategy.

Today in financial services too often the “thought police” do exactly that.  They rely solely on their own understanding when they consider what direction to set for the organization. This same mistake is then multiplied by each lower level of the organization as leaders are taught and groomed not to engage others. These leaders spend the majority of their time “telling” others instead of “asking” others.

Don't wait until it is too late and then look at the wedge you never took the time to deal with. A wonderful experiment is to spend your next week asking the hard questions that spark ideas in others. Instead of answering your own questions allow those around you to fill in the voids you have presented. Allow yourself to toss the ball and give those around you permission to catch the ball and run with it. Don't fall trap to one of the common credit union blind spots of not removing the wedge and looking beyond the people in front of you. Magnify the intelligence of your organization by engaging others and letting them fill the voids you know exist.  

Words of Wisdom From a Former Credit Union CEO

The term “small credit unions” is relative. That said, even when times are good, the “small credit union” tends to face challenges in a way that “larger credit unions”, another relative term, do not.  Speaking from experience, the pressures on the small credit union leadership looms large on a daily basis. The leadership must be intimately involved in all aspects of the operations.  Regulatory burdens alone loom large for the small credit union. Small credit unions have a more intimate relationship with their members. These smaller institutions are under a higher degree of pressure as they assist their members.

Asset quality in small credit union has not changed over the past several years.  The net worth ratio remains robust.  Navigating the economic uncertainty can be difficult.  Negative trends catch the eye of examiners, boards and management.

There are no quick answers here, however, with that said, there are common themes, of which, regardless of asset size are helpful.

• Place negative trends in context.  Make sure interested parties know how other credit unions are fairing.  Information will help directors and management make informed decisions and transparency reduces the likelihood of knee jerk overreactions.
• Most small credit union have plenty of capital.  Avoid penalizing members with higher loan rates. higher fees, lower dividend rates. service reductions, and layoffs just to maintain net income.  Analyze the impact of those decisions.
• Rising delinquency and loan losses require close monitoring and active collections.  Don’t simply tighten underwriting standards. Revisit loan quality parameters.  Analyze the remaining inherent risk in the loan portfolio.  Score the loan portfolio and analyze the scoring migration.
• Mortgage defaults are on the rise.  One mortgage delinquency in a small credit union can have a large impact.  Develop a mortgage modification policy and guidelines to assist the membership during economic downturns.
• Avoid big strategic initiatives in uncertain times.
• Loan demand falls during economic downturns.  Reliance on investments takes center stage.  Investments yields are low so be conservative when placing investments. “SLY”-Safety, Liquidity, and Yield.  Build a basic ladder.
• Since market conditions are volatile asset-liability management becomes more important.  Set policy parameters on fixed rate mortgages.  The federal reserve is out of policy options on the short-end of the yield curve.  The federal reserve through quantitative easing or now QE2,  is forcing mortgage rates down to historic lows.  Market rates will rise at some point.  Credit Unions with large portfolios of long-term fixed rate (rate insensitive) assets will pay a high price (compressed NIM) in a rising rate environment.
• Engagement with outside 3rd party vendors require additional caution during uncertain economic times.  Have a robust vendor due diligence program and policy in place.
• Stress that your deposits are federally insured.
• Reduce to writing your plans and be able to communicate your credit union’s tolerance for risk.  The regulators will expect the leadership has considered where the credit union is financially headed and there is a road map containing a reasonable achievable plan.

During times of financial dislocation credit unions, regardless of asset size, can show others the benefits of the cooperative movement.


The blog entry you have just read was written by Edward Lis who was a former CEO and CFO of two different credit unions. If you enjoyed this article I encourage you to learn more about Edward by visiting www.edwardlis.com


Don't just read the blog become part of the blog by submitting your own article or by leaving a comment below. 

Everyone Needs Some Work Place Passion

Recently I had the chance to attend a chamber of commerce  meeting in which the key note speaker mentioned that many financial institutions have paid a high tuition for a very painful education during this recession. That for many of us part of that education was in seeing what happens when people are extremely passionate in creating profit with no regard for how they make that profit. Sadly the lessons of Wall Street and the meltdown that followed are starting to cool on the political memory. TARP companies are back in the saddle and are moving forward with a renewed passion for finding ways to make more profit. 

While I do not approve of the means or methods of the Wall Street machine I do have to give them credit for being able to attract people who are willing to do anything to accomplish their goals. There is a zeal and energy you think of when you think of Wall Street titans and their hunter/skinners who are looking for the next big deal. No matter how poorly the industry is portrayed it is rarely portrayed as lazy or apathetic towards hitting business goals. 

What role does passion play in our work lives? All of us have seen them. Those coworkers who seem to light up when it’s time to get to work. I recall early in my career working with a lady who was the kindest, gentlest soul that I had ever seen. Not a harsh word or a sharp tone ever escaped her lips as she interacted with her coworkers. Her handbag had a cross-stitch of her grandchildren on the side.

Then the clock would hit the start time signaling that it was 8:30 am which meant it was now legal to call people at home and remind them of prior obligations that they had overlooked last paycheck (yep- Granny was a bill collector).  That sweet old lady was still sweet but her fingers were a blur on the phone, and as she spoke to each person she would light up as she would use her sweet voice and occasionally crack her knuckles and lean forward using hand gestures at the screen. Like some kind of auctioneer the sound of dollar figures would start going back and forth between her and the person on the other end of the phone. It was verbal swordplay to see who would get what they wanted. At the end of the call she would thank them and remind them in her sweet voice she was counting on them to not disappoint her. She loved the game and the challenge of the job and it showed. Each month this kind old granny took home the top collector incentive and top spot on the collections floor. 

That experience taught me a lot about not judging a book by its cover and what impact having passion for your work plays on your performance. It also taught me that in order to really obtain success you have to want to do more than the minimum. When you are passionate about what you are doing then you will find ways to do it better. On the other hand if it is a drudgery to do what you are doing then most of the time the minimum become the most you will do. Today companies need leaders who are strategic, proactive, principled, savvy, flexible, and authentic. All of that goes without saying. Yet, what often drives the business forward is the level of passion a leader feels and is able to inspire. Can anyone imagine Apple being the success it is today if its CEO was not passionate about its future and its products?

The power of passion cannot be over rated. Many of us have turned on the news each morning and seen the crowds of demonstrators who were passionately demanding change in Egypt. The ability of the people of Egypt to demand and receive political change is a stark reminder of the power passion can ignite. It brings diverse people together and pushes aside the boxes we like to put people into. Passion allows us to demand the ability to look forward. It ignites us to either fix some wrong or to pass along something we believe to be right. Passion helps us push past obstacles not because we have to but because we want to achieve that goal that fuels the passion we are feeling.

Consider your own teams. How would you gage the level of passion that is being displayed to accomplish the goals at hand?  Probably many of us work in jobs that do not appear to impact society in a manner that calls for passionate displays. After all, being a manager is hard enough without also having to be the official cheerleader for the group. Yet, what if…what if you could get people really excited about achieving that goal? What if you didn't have to do all the heavy lifting? What if you had someone on the team just waiting for the chance to do more?

Most of us are probably the type that when the goal is on the line we want to be the person in charge. We want to have control. Our internal passion to succeed blinds us to the potential passion in others. I remember one meeting in which I was feeling somewhat sorry for myself because I was feeling so overworked (que sad music for background). So I went and spoke to another leader (my mentor) about my situation. This leader offered sound advise but no matter what she said I kept hearing that I had to do more. Finally exasperated with me (I have that effect on people at times) she said, “ You are not that smart, not every answer has to come from you. You have extremely capable people around you and if you are telling me that none of them can help you then you are a sorry leader!” My pride in tatters I left that meeting angry with her lack of understanding. She obviously had no clue what it meant to be passionate about something and having to do it yourself. Luckily some hours later her words finally penetrated my fog of self pity and I was able to see what she was trying to tell me.

I took a fresh look at the staff roster and sure enough a name stood out. I scheduled a meeting with the person and explained that I wanted to place them on a special project to help me out. The person was thrilled and tackled it with fresh eyes and energy. Soon they had taken the project farther than my original expectations. To add to my lesson of personal humility the person sent me a thank you note for allowing them the opportunity to do more and made a small donation to a school in South America in my name. Clearly I had found the right person for the job.

Practical Application:

Who have you identified that could do more on your team?

How have you  encouraged a high level of autonomy on your team?

What assignment can you hand off to allow someone else to achieve success?  

Has your own level of passion ignited the potential passion in others?

Managing In The Dark: The Impact of Scarcity on Leadership

Years ago when I worked in training I recall being in an training development committee meeting in which we were within weeks of rolling out the pilot training for new managers on how to coach front line staff. Everything looked like it was set to move forward when one of the committee members, a senior branch manager who had been part of our profile group, said, “I have to admit I don’t know how I can afford to do this once we roll this out. I have eleven people in my branch and I still have to do my real job.”

Silence entered the room as each of us absorbed the potential reverberations of what one of the pilot designers had just thrown onto the table. The chairperson started going around the table asking for input from other members to see if they had similar concerns and then one young leader (who later stated she was nervous on speaking up because she was only a coordinator and not a “manager”) said, “I have around eleven people on my team and I can’t afford not to do these things with my team. So we have been doing this for the last year.” With that simple statement it became clear to me who the real leader in the room was.

This example also drove home to me the lesson of mental focus and how it can shift our deliberations. In how we can have people we trust operate from a scarcity mentality and if left unchallenged can limit the options on the table for our organizations. Take the example stated above. When that branch manager stated he couldn't afford the time to do something he enabled himself to place that task beyond reach. It shifted from being difficult but obtainable to simply not relevant as there was no perceivable manner in which the task could be accomplished.

Compare that to the 2^nd leader who by concluding she couldn't afford not to do it she changed the very focus of the leaders who were gathered around the table. She had concluded that she had to afford it and worked towards that goal. When we ask “How can I afford to do this” it shifts the playing field from scarcity in not doing the task to scarcity in not completing the task.

For many in the credit union industry this same type of scenario happened last year when new regulations required members to opt into courtesy pay. Some organization decided that they simply could not afford the time and effort to re-opt everyone into courtesy pay so they simply discontinued the service. Other organizations came to different conclusions as they realized that they very much needed the non interest income that courtesy pay provided to their credit unions. For them the question became the 2nd “How do we opt all our members into courtesy pay and still continue to do everything else we had planned?”

These leaders realized that there is a need to be able to see and operate in the dark. To take steps forward trusting in the talent of the organization to provide the next lamp of light before the last one fades. New ideas were presented, resources reallocated, and operational focus shifted. These leaders were able to decide what they wanted to accomplish. Too often we as an industry look to large credit unions or Big Banks to see what the options are and then follow in their lead. In effect we wait to be told what to choose.

I still marvel at the courage of Unitus Community Credit Union for charging a modest fee for personal financial management tools for their online members. The normal choice on the table is to offer it for free and simply let the membership of the whole credit union absorb the cost. Yet, what if the credit union is trying to keep rates low and still grow net worth. It would be very easy to come to the conclusion, “that we can’t afford to offer PFM for the online members.”  Instead they came up with a third option that goes against what everyone else in the industry would tell them they could choose.

One of my favorite chapters I have read recently is the first chapter of Rich Dad Poor Dad by Robert T. Kiyosaki who wrote of the dynamic of hearing two different world views from his parents.  He had been exposed to two opposing attitudes in thought that played out like you see below.

• One Dad thought that the rich should pay more taxes to take care of the less fortunate. The other said, ‘Taxes punish those who produce and reward those who don’t produce.”
• One Dad recommended, “Study hard so you can find a good company to work for.” The other recommended, “Study hard so you can find a good company to buy.”
• One said, “When it comes to money play it safe and don’t take risks.” The other said “Learn to manage risk.”
• One believed, “Our home is our largest investment and our greatest asset.” The other believed, “My house is a liability, and if your house is your largest investment, you’re in trouble.”
• One taught me to write an impressive resume so I could find a good job. The other taught me how to write strong business plan so I could create jobs.”

I think for many leaders who sit at our tables we have similar disconnects as some have one view and others have the opposite view. As our economy begins to pick up and Big Banks begin to rev up front line operations, acquire our talent and look to cross sell within their branch networks to our members we will find ourselves having to make decisions on how we will compete in an improving economy.  We will face similar questions and diverging worldviews.

• Is our goal to take care of the less fortunate or to go after more affluent or younger members?
• Is our goal to grow organically or to use our capital looking for a sweet out of state merger opportunity?
• Is our goal to conserve capital to appease our regulators or is it to push and manage risk for higher margins?
• Is our goal to help members get into homes or is it our goal to manage our pipeline to what mortgages we can sell to banks because we can’t afford to have low interest mortgages on the books for 30 years?
• Is it our goal to decrease cost by slashing jobs or is it our goal to increase sales and service, deepen wallet share to the point we have to create more jobs due to growth?

Whatever our choices are it is critical that we understanding how we arrived at them. To add a service or not add a service, to fee checking or not fee checking, to close branches or open in new markets, all of these questions are impacted in how we form our deliberations. Did we come from a place of scarcity to arrive at our conclusions? Are we certain we haven’t just looked across the banking divide and blindly allowed our Big Bank counterparts to tell us what to choose?

Not Silencing New Voices: Creating Competitive Advantages for Credit Unions

Recently I was reading the Wall Street Journal and I came across the following sentence which I have paraphrased, “[Management] never seemed eager for me, or others, to actually take the initiative and start something. I was never challenged to lead—only to “serve.” As I reflected on this sentence I could not help but wonder how many of us in leadership positions inadvertently request the same type of activity from our front line staff or front line managers?

Throughout my career the topic of management or leadership has come up. The consensus generally was that managers where inept, drab, and dull individuals who focused on preserving their small circles of power, maintaining the status quo, and planning and budgeting resources. Conversely, leaders are portrayed as people who focus on setting direction, motivating others, coping with change, and creating vision. When you stack those two lists up and put them side by side it is no wonder than the lowly manager comes out lacking.

When we think of “leadership” we all want to follow someone who could lead us to Hell and back. While I agree I do think many of us would also like to have a person who could not only lead us to Hell and back but also make sure we had fireproof suits and fire insurance for the trip. Those trivial concerns squarely fall under the less popular manager category. My point is that leadership and management are not mutually exclusive fields to one another.

This is also true when we consider who should be taking the lead, starting the initiative, or creating something new. Too often we rely on "managers" who are focused on executing goals or members of senior management who are focused on big picture items to come up with the new and innovating. The group that tends to be forgotten is the very group who has the best understanding of what needs to be fixed-the front line staff.

Now some would argue that front line staff simply do not understand the complexity of the business. While I agree there are times when they might not understand all the moving pieces I have found over the course of my career that most of the staff are keenly aware of their piece of the puzzle and possess a solid understanding of the connecting dots around them.

So why have so many leaders and managers avoided empowering front line staff? I believe it is because many companies made difficult decisions that involved giving up benefits, freezing pay increases, introducing compensation cuts, doing away with pension plans, and reducing hours. After having to make those difficult decisions many management teams simply “circle the wagons” as they buy into the two camp philosophy of “us” versus “them”. This is exactly the wrong thing to do. No wants to have things taken away and then not have a voice in how to bring them back. Most companies are more than willing to have all of those things in place if they can have them and stay in the black.

In today’s "new normal" each company has to understand what is its competitive advantage. As people are more apathetic towards large institutions local community financial institutions have a window of opportunity to grow membership and introduce new innovative products or services. Now is the time to fire up front line staff, to engage them and paint a vision of how the company can succeed.

If you are one of many financial institutions that had to make hard decisions the last thing you want to take away from your staff is their insight and voice on how to make things better. Allow the natural leaders and managers of others to rise to the top. Create a means to allow for job enrichment.

This is a competative advantage to not being a "Too Big To Fail" Big Bank. Do you really think senior management of some Big Banks are actually going to sit down with tellers or call center agents and ask them how they could serve their customers better? Ask them what products members are using and not using ? What processes are clogging up process flow and creating service failures?  This is where being, "Too Important To Disappear " becomes a distinct advantage.  You have a whole credit union of operational experts waiting for you to just ask them their opinion on how to make the credit union better. What are you waiting for ? As Big Banks add fees and restrict contact by charging for teller visits or call center calls now is the time to get your people engaged and talking about what they can do to make a difference to your membership.

Practical Application:

When was the last time you had a focus group with your front line staff? It is amazing what an 1 hour focus group with front line staff will uncover. Take note of those in the group that rise above the band wagon and offer clear and distinct perspective.

Hold two or three rounds of 1 hour focus groups. Hold 1 for new hires, one for your call center or branch staff, and one for your support staff.

Compile the results and look for common themes. 

Report back to the groups on action you are taking. Engage those natural leaders and managers who were discovered in your focus groups to help lead others to create solutions. 

What you will gain is a stronger management bench, a clearer understanding for staff on the mission, participation in solving the problems and gaining market share in your markets. All of which allows you to give back those other things staff value like pensions, benefits, or pay raises.

Leadership Needed Not More Hand Grenades

Throwing Hand Grenades
One of the most important attributes about leadership is the ability to provide perspective and correction. Most of us are able to see problems. Some of us probably even know people who excel at throwing verbal “hand grenades” into meetings just to see things explode. Yet, these same people often are unable to articulate viable solutions. This is because they lack perspective more specifically leadership perspective. In my experience leaders have the ability to view the context of the surroundings around them. They are able to see the map from a leadership dynamic. Critics, the mob in the corner with all the hand grenades, no matter how well intentioned fail to provide the needed advice or perspective to correct a situation. This can be seen on both the level of member interactions and on the larger level when people talk about financial services and fiscal policy.

Looking At The Situation With An Experts Eye
For example on the micro level, take a situation in which a member comes into one of your branches to apply for a $500.00 personal line of credit for personal expenses. Let’s assume for the sake of the example the loan officer looks at the situation and based on the underwriting criteria they decline the loan. What was clear to the loan officer was that the last thing this person needed was more debt. This is the pivot point on the member level. Does your loan officer ease that person out the door eager to wait on the next person or do they look at it from a leadership perspective? Make no mistake in that situation your loan officer is the leader, the expert, who can offer criticism or they can look to see how the person can make critical adjustments to improve their situation.

Suppose that in looking at the member’s situation it was clear that the member did not need to add more debt but rather needed to restructure the debt they already had. After explaining what they could do your loan officer takes an application for an internal refinance on the member’s auto loan that they had with a BigBank and the member gets approved for the full value. This allows your member to pay off three credit cards and have $500.00 for personal expenses and some extra for personal use. The end of the story is that the member was so happy they wept and said that your credit union was a blessing to them. Sound farfetched? I know of situations just like this and I am sure some of you if you asked your front line staff would also find similar situations.

One of the ways credit unions can help is by offering financial leadership when looking at our members situation’s. We need to employ a perspective that enables others to accomplish things they could not accomplish themselves. This is critical to helping to provide services to our underserved membership.

It is for this reason that credit union members and leaders need to make sure they are expressing their opinion to community leaders on how we provide financial leadership to our members. Credit Unions face increasing pressure as new proposals in Washington have language that mentions ending the credit union income tax exemption as one way to reduce the federal deficit.

Ironically it also mentions the growth of Subchapter S corporation arrangements for banks — a way to organize bank ownership to reduce tax obligations. Subchapter S banks pass their earnings along to shareholders in the form of dividends, who are then taxed as individuals. Theoretically, this can reduce tax liabilities for the bank's owners, who can use other deductions to lower their exposure.

More than ever credit unions need to be seen as financial leaders who have the ability to provide perspective and correction to people who are struggling during these challenging economic times. This means helping people of modest means as well as being able to help small business owners who find themselves struggling to secure needed capital for growth.


Practical Application:

• Have you build in systemic behaviors into your delivery channels have enables front line staff to provide financial leadership to your members?
• Have you positioned yourself as a financial leader in your local markets? In some markets the local bank branch is the only game in town.
• How have local branch managers engaged local civic leaders letting them know how you are different?

Business at All Cost - Has Become Too Expensive

Over the years I have found that one of the hidden treasures in life is having a connection to the communities you are a part of. Communities can provide a source of support and strength in times of challenge and difficulty. We all anticipate some of the common life events that many of us pass through: graduating from school, first “real” job, first dates, buying a car, buying a house.

Yet, these events come with others that are not anticipated and we find it comforting to be able to reach out and ask for some advice from those we know and trust.

I think that is why so many people were shocked to see the CEO of a large oil company out sailing his yacht when the Gulf of Mexico and countless communities were still facing life changing peril. I guess in times of stress people sometimes run to the things that help them cope and for this leader it was his yacht.

What seems so terribly sad to me is that the people of one common community are counting on the focused leadership of this man to lend support and his undivided attention to getting the matter resolved. Yet, he has run back to his community, which is far from the Gulf Coast, and just wants to get his life back. Sadly, so do countless others in the Gulf Coast area. I grew up on the Gulf of Mexico and recall seeing the fishing boats head out at the start of the season so to me seeing the harm that has come their way is heartbreaking.

This whole tragic turn of events has reminded me of the Wall Street Meltdown. It is easy to see the similarities- top executives making decisions on events that happen in communities in which they don’t live or even plan to visit. Whether it was putting people in subprime loans (that everyone knew they could not afford) or sacrificing quality to make a faster profit (as is alleged in the Gulf Coast tragedy), the results are the same – people in a community suffering because of the actions of some distant executive. Sadly, it is so easy to see how someone in an office so far away fails to see anything other than the report that is right in front of them.

Yet, how do you describe a community on paper? How do you write about the people that come into the local breakfast dinner in the morning and all they have to talk about is bad news? How do convey to the corporate board room the challenge families, who work on the Gulf Coast, face as bills arrive with every trip to the post office. That sense of despair is not easily seen on a budget line item.

How do you teach community to a generation of business leaders? How do you get them to think beyond how they can make money off their efforts? Until we can get people to get out of their offices in some far away community and come see how people live in another community then we will always be waiting for the next disaster. How many collapsed mines, exploding oil wells, and Enron accounting scandals do we have to face before we demand more from the businesses that operate in our communities?

Business and making a dollar no matter the cost has become too expensive.