When loyalty gets in the way of leadership

Not long ago, a credit union executive asked me a question that sounded like a straightforward business problem.

"How do I fire my broker? I've known them for a long time, and they have been really great to us."

The more we talked, the clearer it became that she wasn't really asking about terminating a contract. She was wrestling with something far more personal: the tension between loyalty to a relationship and responsibility to her organization. She already knew what the right answer might be. What she was looking for was the courage to act on it.

That conversation has stayed with me, because it reflects a challenge that exists in virtually every organization I have encountered.

Most leaders are comfortable evaluating technology, operations, financial performance, and staffing. We expect those areas to evolve, and we build processes to ensure they do. We measure outcomes, challenge assumptions, and course-correct when something is not working. Relationships are different.

Over time, trust becomes familiarity. Familiarity becomes comfort. And comfort, quietly and gradually, can become a reason to stop asking important questions. What began as a partnership built on demonstrated value starts to be maintained by history, habit, and the very human desire to avoid a difficult conversation. A vendor sits on the board. A consultant has been involved for decades. A service provider is a personal friend. None of those factors are inherently problematic. The problem arises when the relationship itself becomes the reason it is maintained.

In his book, Leadership Without Easy Answers, academic and author Ronald Heifetz draws an important distinction between technical problems and adaptive challenges. Technical problems have known solutions and established processes. Adaptive challenges are different; they require leaders to change behaviors, challenge long-held assumptions, and sit with discomfort long enough to move through it.

Evaluating a long-standing relationship is almost always an adaptive challenge. The question, "Is this still the right relationship for where we are headed?" becomes tangled in politics, history, and the personalities surrounding it. The obstacle is rarely the data. It is everything the data must compete with.

In the book Leading Change, Harvard Business school professor, John Kotter, observed that organizations frequently fail to change not because the path forward is unclear, but because they underestimate the urgency of acting on what they already know. Current outcomes feel "good enough." Change feels risky. Without someone willing to own the responsibility of challenging the status quo, years pass and nothing is examined. What we tend to call loyalty can, over time, become stagnation.

Jim Collins argued in his book, Good to Great, that exceptional organizations are relentless about getting the right people on the bus, and just as disciplined about making sure they are in the right seats. Most leaders apply that principle internally. Fewer apply it to the people surrounding the organization: the advisors, partners, vendors, and service providers who influence their decisions and shape its outcomes.

The question Collins was really asking is harder than it sounds: “are the people around us still the right people for where we are trying to go?”

Answering it honestly requires what Patrick Lencioni identified as one of the most common failures of leadership; the willingness to engage in productive conflict. In his book, The Five Dysfunctions of a Team, Lencioni makes clear that when leaders avoid difficult conversations to preserve harmony, they don't eliminate problems. They just delay decisions and quietly erode accountability.

In another of his books, The Advantage, Lencioni goes further. He argues that organizational health—the ability to be honest, clear, and aligned, is the ultimate competitive advantage. Healthy organizations put the institution's success ahead of personal comfort. They hold themselves accountable to asking hard questions, even when those questions involve people they respect and relationships they value. Evaluating vendor and partner relationships is, at its core, an exercise in organizational health.

The most difficult business decisions are rarely about numbers. They are about people. Leaders are regularly asked to balance loyalty against performance, relationships against results, comfort against accountability, and tradition against progress.

There is no single way to navigate that tension, but leaders are still held to a standard. Leaders are stewards of their organizations, not their own comfort, and not of any specific relationship. Stewardship requires periodically asking whether every partnership, regardless of history, continues to serve the people and the mission the organization exists to serve.

Strong partnerships hold up under that scrutiny. In fact, the most confident partners are rarely threatened by honest evaluation, because value can withstand comparison. If a relationship genuinely continues to deliver what the organization needs, a clear-eyed review will confirm it. If it doesn't, that is exactly what the organization deserves to know.

The credit union executive I spoke with already knew how to walk away from a relationship. What she needed was reassurance that taking a step back and evaluating it honestly was the responsible thing to do. My answer was simple: it is acceptable. It is an essential part of the job.

The question is never whether a relationship has been valuable; most long-standing relationships have been. The real measure of leadership is the willingness to ask whether it remains the right relationship for where the organization is headed next, even when that question is uncomfortable to raise. Sometimes that process confirms your partners are exactly where they should be. Sometimes it reveals something important that years of familiarity had been quietly obscuring. Both outcomes are worth having.

It is also worth noting that evaluating a relationship is easier than it seems. A review costs little more than time, and in many cases, you are already paying your partners through built-in fees whether they are delivering value or not. The real question is simple: are you getting what you’re paying for? Somewhere in the market, a different approach may already exist, and the only way to know is to look. Consider whether your current provider is still bringing you better ways of working or if you’re getting the same level of service you had five years ago. The answer may tell you everything you need to know.

Sometimes that knowledge leads to change. Sometimes it simply raises the bar for what the current relationship is expected to deliver. Either way, the organization is better for having the conversation. Business is no different than any other meaningful partnership. Ending something familiar is hard. Starting over costs something real. However, when you take the time to find the right fit, the difference is not subtle.

The real risk tends to show up when no one is willing to take a closer look.

InterLutions is a wholly owned Corporate Central Credit Union Service Organization (CUSO) committed to changing the way work gets done. By bringing together employee benefits, HR compliance, benefits administration, workforce education, and strategic consulting, InterLutions helps credit unions move beyond transactional service models and toward integrated workforce solutions. The result is a more efficient, compliant, and employee-centered approach that enables organizations to focus on what matters the most—serving their members and growing their impact.