The Roles Less Traveled

Two credit unions explain why logic trumps tradition when it comes to their division of responsibilities.

 
 

There’s a predictable pattern when it comes to the leadership structure at most businesses today. For example:

  • CFO: Crunches numbers and denies budget expansions.
  • CMO: Endlessly debates word choice and color schemes.
  • CTO: Happily shuns all human contact for hours to tackle endless lines of code.
  • CLO (always suggests paintball for company outings), COO (stressed out) and CEO (concerned about the tee time).

All kidding aside, these roles are a crucial foundation in many organizations. However, forcing a credit union into a traditional structure that doesn’t suit its culture or goals is no path to success.

Here, Warren Federal Credit Union ($537.5M, Cheyenne, WY) shares how it breaks free from the traditional “checklist-style” leadership structure, while Royal Credit Union ($1.6B, Eau Claire, WI) explains how new roles are helping it foster cross-departmental buy-in and support.

The Executive Shuffle

Jan. 1, 2015, marked a fresh start for the executive team at Cheyenne-based Warren Federal Credit Union.

“We’re a pretty aggressive growth organization,” says CEO Stephanie Teubner. “And to serve our members and our communities they way we want to, we needed to make sure our focus as a team was in line with that.”

CU QUICK FACTS

Warren Federal Credit Union
data as of 3.31.15
  • HQ: Cheyenne, WY
  • ASSETS: $546.6M
  • EMPLOYEES: 154
  • 12-MO SHARE GROWTH: 8.55%
  • 12-MO LOAN GROWTH: 7.96%
  • ROA: 0.99%

At the end of 2014, Warren posted 7.6% annual loan growth and 8.0% annual member growth, according to data from Callahan & Associates. By comparison, the later of those metrics was only 5.3% among similar sized credit unions over the same timeframe.

Despite its above-average financial performance, the credit union shook up its organization structure in a way that required some C-suite leaders to change roles starting in 2015 and others to adopt new areas of oversight.

The operational shifts left Warren with three traditional C-level roles — a chief executive office, a chief financial officer, and a chief lending officer — as well as three  non-traditional executive positions. A chief retail officer manages all non-lending employee interactions, including in the call center and branches; a chief administrative officer manages information technology and facility construction and maintenance; and a chief brand officer manages HR, learning and development, and marketing.

“There’s a lot of synergy between employee engagement and member engagement,” says Teubner regarding the wide scope of ownership in the last three roles. “That’s what we wanted to tap into.”

During this time, the credit union also added a layer of leadership at the vice president level, a first in its history. This involved promoting three associate vice presidents from within Warren and hiring three new vice presidents, including a vice president of risk.

“The vice president of risk reports to the CFO and has oversight of compliance, enterprise risk management, internal audit, and other traditional roles,” Teubner says. “But we also moved collections to her, so the role now better encapsulates all types of risk.”

Another new hire, the vice president of eServices, owns all electronic touch points for members. This includes not only the front-end user experience but also the back-end activities that influence it, such as support services, vendor management, and ATM and card processing.

“Start to finish, the same leadership manages these interactions,” Teubner says.

If you build an organization with leadership that is synergized, that culture will flow down. But if your leaders are not in sync, that will flow down too. 

Warren’s new organizational structure breaks down traditional department silos, the CEO says, but it also focuses roles where lines had become too blurred.

For example, the eService department has taken numerous responsibilities — such as ownership of the end-user experience — off the plate of the administrative department, which has allowed admin to focus on building the organization through both virtual and brick-and-mortar channels.

But such changes had to start at the top, Teubner explains.

“If you build an organization with leadership that is synergized, that culture will flow down,” she says. “But if your leaders are not in sync, that will flow down too.”

Next: Royal's VP of Organizational Agility »


From “Your” Problem To “Our” Problem”

Located in Eau Claire, WI, Royal Credit Union also has added new roles over the past few years as part of a larger culture change ushered in by CEO Rudy Pereira and spearheaded in part by Jan Johnson, the organization’s executive vice president of organizational agility.

Johnson’s role bridges the gap between traditional HR, tech writing, and marketing, business development, training and organizational development, and community engagement. It also touches nearly every part of the organization.

CU QUICK FACTS

ROYAL Credit Union
data as of 3.31.15
  • HQ: Eau Claire, WI
  • ASSETS: $1.6B
  • EMPLOYEES: 468
  • BRANCHES: 51
  • 12-MO SHARE GROWTH: 10.50%
  • 12-MO LOAN GROWTH: 17.73%
  • ROA: 1.36%

Prior to joining Royal in 2012, Johnson worked for IBM, first as a technical writer, then as a global HR professional, and eventually as the executive of a Virginia-based offshoot formed in partnership with Toshiba.

“Performance management was a huge part of the culture at all levels of these organizations,” Johnson says. “So one of my big goals when I started with Royal was to shift us from being excellent transactors to being excellent strategists and understanding how our departments could collaborate better.”

An important step in this transition was the creation of a program director of organizational alignment, which focuses on cross-functional communication as well as cross-functional service commitments between departments.

“We need the member experience and the team member experience to be cohesive,” Johnson says. “That can’t happen if we’re letting each other down.”

The credit union’s executive team and middle management now discuss cross-functional problems during a weekly service alignment meeting that covers internal and external factors that might impact Royal members.

Royal Credit Union's EVP and VP Level Positions
(Click to enlarge)

EVP-VP-Org-Structure[3]

Please note the following list only includes EVP and VP level positions and does not include the CEO or any direct reports for these respective roles.

The main deliverable of these meetings is to ensure the proper department is owning and addressing challenges as they arise. The meetings also ensure other departments have the information they need to anticipate and support their peers, Johnson says.

We need the member experience and the team member experience to be cohesive. That can’t happen if we’re letting each other down. 

The credit union also added an operational committee in late 2014. Chaired by an organizational and information development manager, the committee owns project proposals, evaluation, approval, and funding

“This group’s priority is to understand the potential member impact of a proposed project and understand if we have the resources to do it right,” Johnson explains. “Once a project is approved, the committee must monitor the implementation and downstream issues a delay might cause on other member-crucial projects.”

This new focus has required buy-in at all levels and an unwavering commitment to Royal’s core values, yet everyone benefits from the end results.

“The more we can drive down our operating expenses through efficiency, the more we can do for our members and our team members,” Johnson says. “Our current compensation is competitive to our market, but our strategy is to set it above market when we have earned the right to do so.”

 

 

 

May 18, 2015


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