An examination of third-quarter year-over-year performance trends among the nation’s credit unions shows membership growing by 3.5%, share growth at its highest rate since 2012, and loan growth in the double digits.
As an October article in The Economist titled “Winning Converts” points out, this is not a one-year phenomenon. Rather, the industry’s 2015 results are the continuation of trends stretching back more than a decade and values established well before that.
It is true this growth has accelerated since the Great Recession, as adversity helped expose the true benefits of a cooperative financial model. When many competitors pulled back during the downturn, credit unions stayed engaged in community activities, kept lending, and even served as a stabilizing partner for many at-risk households, offering everything from loan modifications and financial education to direct philanthropic support.
In doing so, these organizations successfully showed the difference between being a pillar that stands strong when the storms blow and a facade that crumbles and washes away at the first testing.
Today, credit unions are often the largest locally owned financial institutions in their respective communities, and this prominent standing comes with both privileges and responsibilities.
For example, while some were once primarily occupied with the near term and the tactical in order to survive, credit unions now have the breathing room to examine much deeper matters, such as building lasting community trust and brand legacy. This deep soul searching has some pursuing a much broader endgame, one that must ultimately be defined from the top down.
Learning To Do Less, But Be More
One of the huge advantages of credit unions being able to source local leadership is that these individuals don’t just look at a community purely as a business market, they look at it as their home.
At the same time, growing staff capabilities are allowing executives to evolve their role and better understand all of the ways they and their employees could potentially contribute to and improve members’ lives. As one CEO recently said, his goal as a leader was to “do” less but “be” even more.
One facet of that top-down effort is culture building, something that can easily be overlooked in the panic of the bad times and the frenzy of activity in the good.
That’s why credit union leadership teams, and the CEO in particular, must ensure that their organization truly develops, understands, and adheres to its values and mission, and uses those resources to build a vision for the future. This is accomplished by being in front of employees on a regular basis, including meeting with new employees, visiting branches, and communicating stories that reinforce the organization’s DNA. This helps staff recognize that their role and the tasks at hand, whatever they may be, are all important parts of a larger, meaningful picture.
Invest In Something Bigger Than Yourself
No vast structure can be upheld by a single pillar. To accomplish that, you need many pillars aligned together along a common path. Likewise, networking with other credit union leaders is one of the most effective ways to expand the reach of your own organization and create a stronger, more lasting impression of the movement among all Americans.
At the very least, serving on a corporate credit union, league, or national industry board helps to broaden a leader’s views and provides new perspectives that can prove invaluable. But at its best, in-depth collaboration can also lead to ideas and initiatives that make the once impossible finally obtainable.
Shared ATM and branch networks, lending and technology CUSOs, and more recent initiatives such as compliance and back-office partnerships have all been initiated by executives working together to address organizational and member service challenges.
And it’s not just fellow credit unions who could be your next great co-collaborator. In fact, community leadership organizations of all types are now opening their doors to the cooperative industry. Chambers of commerce, economic development councils, and non-profits are all part of the same community ecosystem that credit unions have proven themselves worthy of inhabiting.
Participation in a wider network provides connections with leaders and a greater understanding of shared issues that need to be addressed. It also helps you become more indispensable to your own community by letting you support it in a different way than you could have alone.
Rethinking The Endgame
One good move in a game of chess may increase your odds of winning, yet in and of itself, it is no guarantee of an end victory. The same could also be said of financial performance. As the roles of credit union leaders evolve, so too should their success measures.
Certainly a credit union must remain sound financially and operationally, and continue to develop products and services that are relevant to members. But beyond the traditional metrics, will credit union boards be able to measure the benefits from time spent outside of the office? Will board members be able to evolve alongside your leadership and membership? How will the strength of the organization’s culture be measured? Will involvement in collaborative industry initiatives be recognized?
As capabilities expand within an organization, so do the possibilities. And when the right staff, systems, and technologies are in place to manage the bulk of your day-to-day business, it frees up the leadership team to spend more time tackling these difficult yet important questions.
As credit unions drive toward another record year of performance, it is important to recognize that financial results are not the only measure of success. Rather, the true impact of these organizations will ultimately be determined by the weight they carry and the reliability they prove for the communities they call home.