Culture Shock: Jump-Starting A Credit Union's Growth Trajectory

Clyburn FCU's CEO thinks introducing a sales culture is the way to shake up his credit union's strategy to spur growth; 4 credit unions leaders offer advice.

 
 

On the last leg of his flight-and-drive journey home from a Callahan CEO roundtable in Nashville, TN, Henry Fellini mulled over the people he had met and the things he had heard. The roundtable’s participants were energetic and most of them had good near-term outlooks for their credit unions. Fellini did not have the same optimism. He had been the CEO of Clyburn Federal Credit Union for slightly more than two years.  Its headquarters was nestled in the large lakeside town of Clyburn, PA, not far from where Fellini had grown up. As he drove along the narrow, twisting river valley through the darkening forests of north central Pennsylvania, he wondered if he and his staff were in a rut.

Fellini had risen through the ranks of the credit union, starting as a teller. With some extra education, he had moved into the credit union’s management track and eventually took over for the retiring CEO. At that time, he and the board felt that “steady at the tiller” was the most prudent course for the credit union despite a year (2009) that was anything but normal.

County workers founded the credit union during the 1940s, and it had grown with reasonable assuredness through the decades. In fact, it had acquired so many SEGs in its three-county area that it was virtually, though not in reality, a community charter.

Fellini realized he had some good cards in his hand: The credit union had a solid reputation among generations of area families; the local economy had not experienced the run-up in housing prices so avoided the market crash; delinquencies were manageable. There were other positive signs, too. The Clyburn hospital was building a new wing, which meant doctors and nurses would be moving in – they would need loans for houses and cars. The big banks had largely ignored the Clyburn region, although there were a significant number of community banks with strong local roots. One, however, was rumored to be talking to a regional banking chain. Fellini considered this an opportunity to woo members.

Within the credit union, two of the most long-serving board members were retiring and younger members were running for the seats. The candidates were eager, well-educated, connected in the community, and looking to create a greater presence for Clyburn FCU in the three-county area. Fellini expected whoever won the seats would bring fresh energy to the board, present new ideas, and press new approaches.

Still, winding along the dark river valley, ever-alert for deer, Fellini had cause for worry as well. Growth had been flat for decades; Clyburn FCU had been in the $250-million asset class for a long time and could not seem to break out of it. He wanted the credit union to reach the next level. A rate survey showed Clyburn was a leader in many products, though not all. Fellini thought that was appropriate. No credit union can lead on all rates and remain long in business. Unfortunately, despite attractive rates, members thought of Clyburn FCU for specialty loans (notably boats for the lake) but not so much for core products such as home mortgages and credit cards. And it was on such core products Fellini believed Clyburn FCU should now concentrate; he had learned at the roundtable that his peers were doing significantly better in penetration for these products.

In fact, when he used Mortgage Analyzer to evaluate Clyburn FCU’s performance, he learned the credit union was good at processing the mortgage applications it received but was doing a relatively poor job capturing total applications in the marketplace.

Moreover, its branches’ performances were not homogenous. One branch, led by a recently promoted teller who had a strong sales outlook, was doing significantly better than the other three. At these three, staff seemed unable to convert market exposure to signed loans, despite a 12-month marketing campaign.

So, on this peaceful drive home, Fellini contemplated a culture change. The credit union needed a shake-up, from the front line through his own corner office right up into the board room. No longer would the employees sit back and take orders – everyone needed to get on board with the belief that the credit union could and should be an integral force for helping members and the community climb out of this recession.

He needed to scrap “steady at the tiller” and introduce a strong sales culture. He had some good leads on the right people to bring in for consultation and training, but he was anxious about how the staff would accept it. Would older MSRs resent the new culture? How long could Clyburn FCU give employees to evolve or move on? Should he institute an incentive? Or was offering monetary rewards for employees in hopes of spurring sales somehow against credit union principals? Were there other options he hadn’t yet considered?

As Fellini drove out of the river valley into the basin of the silvery lake, he saw at the far end a half-moon rising. Clyburn, visible in the distance, was having its night’s rest. So was his credit union. Fellini’s question for himself was: Could an imposed sales culture wake it up? 

Four credit union leaders weigh in on Fellini’s question. Click through the Feature Package: Culture Shock articles below to read advice and opinions from Mike Silvers, CEO of Valley Federal Credit Union, Rachel Risberg, EVP Operations of Royal Credit Union, David Tate, Branch Operations of Anheuser-Busch Employees Credit Union, and Pat Smith, CEO of Unitus Community Credit Union.

 

 

 

Feb. 25, 2013


Comments

 
 
 
  • Unfortunately, sales is often considered a bad word and we have been successful at hiring people who want to help people but not sell to them. That is the first change we need to make, identify who is really good maybe even great at helping others and place them in positions to do so. Then identify or find staff who are motivated by earning money or selling ideas and put them in sales related positions like new accounts and lending.Then pay the second group a fair incentive program to get new business for the service people to help take care of the business. train the service people to listen for cues and have meaningful conversations for leads but don't place the sales pressure on them, they won't succeed. We call our sales culture the help culture, all we are trying to do is help members and the only way to do so is to find needs and offer solutions to meet the needs. And yes, that often means closing the sale.
    Dennis D. Degenhardt
     
     
     
  • Many of the staff won't accept it. If that's a chief concern, don't attempt it. Should an incentive be instituted? I've never seen a successful sales program without aggressive goals matched with incremental rewards. If "sales" is a bad word, find a model more befitting a traditional single-sponsor credit union whereby the credit union receives subsidies like free office space, and be content with modest or no growth. There are fewer and fewer of these types of credit unions, but some that remain are very good at what they do. The others are getting gobbled up in mergers. Installing a sales culture is hard. Lots of people will resist it, because they weren't hired for that, and their skills may be unsuited for it. If the board has staff pets and sacred cows, then prepare for a rough and unpleasant transition. The board should be prepared for some high initial turnover. Managers should be prepared to spend a lot of time measuring, teaching, communicating, and coaching. A lot of time. And then be prepared to change out some of the staff, even those that everyone likes. Obviously if they can transition to a non-sales position, keep them on the bus, but that won't be possible with all of them. The benefits of a strong sales culture will be enjoyed by all staff, and certainly the members. Better earnings naturally follow, along with growth. More earnings means more investments in training, staff development, salary and benefits. You empower sales staff to have control over their own compensation. On the member side, they [should] get more and better products, more conveniences, and the opportunity to partake in more low-cost credit union products and services, thereby saving them money.
    Tony Hale