Five Critical Areas for Credit Unions to Grow and Prosper: Article Five: Culture
Article One: Five Critical Areas for Credit Unions to Grow and Prosper
Article Two: Improving Your Efficiency
Article Three: Business Development
Article Four: Technology
In an earlier post we took a cursory look at five key areas where credit unions need to focus attention and energy to improve their performance. This post is the fourth in a five-part series where we take a deeper look at each of these areas and provide some simple action steps to get the conversation and the action underway.
Being a service driven non-profit where employees who believed in the founding principles of the credit union and sought to do good work for the members, created strong cultures within many credit unions. But as credit unions grew and their original fields of membership expanded beyond individual companies to multiple SEGs and entire communities, new employees were hired who lacked the strong connections to the founding organization, and the culture changed.
Simply stated, something that was once a natural advantage for credit unions has been lost as the market has become more competitive and the members and employees have become more diverse. But the key to future success lies in redefining and rebuilding the culture of your credit union…the quickest and most effective pathway to creating a sustainable difference in the marketplace.
Here are three important steps to take:
1. Define Your Culture
When Jim Collins and his team did their research for the best-selling business book Good to Great, they learned that culture was an implicit driver of long term success. Companies that defined what they stood for and defined a clear set of expectations that everyone understood saw higher levels of employee engagement and performance. It all started with defining the reason for their existence.
That makes step one for your credit union the definition of your culture. It means taking time to outline the foundational beliefs that will guide your credit union in serving its members, the manner in which employees will be treated, and the expectations for everyone associated with the credit union.
It doesn’t have to be elaborate and it shouldn’t be hard to understand, remember, or live on a day-to-day, week-to-week, and month-to-month basis. Nor does it need to be a change in direction from where you are today…if that is the place you want to be in the future. The key is to delineate what you believe in, what you want, and how everyone on the team will make it happen. That way everyone knows what they are a part of and they can live up to those expectations.
2. Hire the Right People
When you talk to people who have grown successful companies, you quickly learn that having the right people on the team is the key to all of their success. Collins and his colleagues noted this as well, referring to ‘getting the right people on the bus’ as step one in building a strong company.
The point here is that once the culture is defined and the commitment is made to live up to that culture every day, the next step is to make sure that the people who are part of the team fit with the culture. Hiring (and firing) decisions end up being based as much on the cultural fit as they do on the knowledge, skills, and experiences of the person. Because those who fit with the culture will find ways to apply their talents and succeed, while those who don’t fit will struggle and detract from the team’s performance.
3. Build Your Culture
Defining your culture and hiring the right people are two necessary conditions for creating long term success, but they are not sufficient to ensure that you will achieve the desired outcome. That requires conscious effort every hour of every day to reinforce and build the culture… to hold people accountable to the standards that have been defined, to make the difficult decisions that protect the culture—even when they mean moving people out of the organization who don’t fit, and rewarding behaviors that reinforce and contribute to the success of the culture.
The bottom line is that when people know what they credit union stands for they can decide whether or not they fit, and if they aren’t currently doing what they do best, they will find ways to realign their efforts so that they can contribute. People always live up to (or down to) the expectations that are set and your definition of your culture and your demonstrated commitment to build it lead your team to engage at a different level and help you succeed.
ACTION ADVICE
Get out of your office and talk with your people about the culture that you have… is it the one you need to get to where you want to go? What works about it, what doesn’t work, and what needs to be changed? How well is your current culture defined, understood, and reinforced on a day-to-day basis? Do your people’s perceptions of your culture fit with yours, or is there a gap between what you think the culture is and the way it is being lived and how will you resolve this?
Article One: Five Critical Areas for Credit Unions to Grow and Prosper
Article Two: Improving Your Efficiency
Article Three: Business Development
Article Four: Technology
Michael Hudson, Ph.D., founder of CreditUnionStrategy.com, has been a credit union member since he was three months old). He facilitates strategic planning processes, leadership retreats, and culture building experiences for credit unions across America. Learn more at www.CreditUnionStrategy.com or connect at www.Facebook.com/CreditUnionStrategy or www.Twitter.com/CUStrategy
