Zen and the art of credit union maintenance

2024 was another dynamic year for credit unions across the country. Credit unions of all shapes and sizes faced new challenges and opportunities and gained new insights shaping their purpose and focus. Facilitating dozens of planning sessions with credit union leaders and interacting with thousands of friends and colleagues at conferences from coast to coast, offered a unique perspective into the issues, ideas, and sentiments shaping the credit union space.

Now that I'm off the road, at the end of the season, it’s time to reflect on the year and assess the State of Credit Unions.

The theme for this article comes from an exceptional book I read years ago: Zen and the Art of Motorcycle Maintenance by Robert M. Pirsig (1974). The philosophical novel blends a personal narrative with explorations of the nature of quality, existence, and meaning. Subtitled "An Inquiry into Values," it became a cultural phenomenon using motorcycle maintenance as a metaphor for life. The book emphasizes mindfulness and care in one’s work, whether maintaining a machine or navigating life’s challenges.

Early in my credit union career, the book’s themes of seeking meaning, balance, and a deeper understanding resonated deeply with me. The following is my attempt to apply the art and science of Zen and the Art of Motorcycle Maintenance to our work in credit unions.

Credit union leaders are, if nothing else, operationally and compliance focused. Trainers and regulators drill this into us, and we're held accountable because it’s easy to measure. Accountability is critical. My first credit union job was as a teller, and I was trained (and warned) that tellers at credit unions must balance to the penny.

A funny aside—I was the teller that operations officers had to help balance every night. While my performance on member connections and product-focused conversations was likely off the charts, my technical skills left something to be desired. Within months, I was reassigned to collections. Training there was simple: call the people on the list, and don’t let the delinquency rate exceed 1%. I’d report monthly delinquency results to the board, where the first order of business was discussing the rate and why “Fred” was still on the list.

Credit unions today are far more complex than in 1985, when end-of-day processing was backed up on reel-to-reel tapes. Today, there is more risk and fraud, and members are offered a wider array of services. Efficient systems, strong controls, scoring models, and solid infrastructure are vital for safety and soundness. KPIs are used to track everything, making measuring results easier and everyone accountable.

Successful credit union leadership is more than science. It’s equally about art. Leadership involves inspiring and guiding teams, building cultures of trust, and creating relevant missions and visions. These artistic skills ensure a credit union’s longevity and vitality.

The art of leadership is evident in organizations with:

Building loyal relationships that support growth involves empathy and strong interpersonal skills, which are more like painting with watercolors than building with Legos. Yet, these artistic skills are in short supply in many credit unions, as evidenced by declining (organic) or stagnant growth, low employee engagement, and higher turnover.

Adapting to change is another essential art. Leaders and teams must constantly navigate change, Fear and domination only go so far. Mastering this art is critical for long-term success—because our teams will ALWAYS be adapting to some form of change.

Understanding your market and aligning products to their needs requires artistic creativity. It’s one thing to pick a geographic market on a map; it’s another to inspire a community to choose your credit union over countless alternatives. Successful leaders are willing to break from tradition, take risks, and accept that not all efforts will show an immediate ROI. These artists understand that good results sometimes mean raising examiner questions and settling for a CAMELS “2”.

Science pursues objective truths through observation and experimentation, while art captures truths about human experience through creative expression. Zen, meanwhile, focuses on intuition and mindfulness—a balance of both worlds.

On the road, visiting credit unions, I often experience Zen moments. These insights come from witnessing credit union excellence—the perfect blend of science and art. The best leaders and teams exude a unique energy that drives engagement and passion. Tissue boxes are sometimes passed around during meetings because the work is meaningful. But Zen isn’t just about feel-good moments; it’s about achieving strong financial and (organic) growth results, maintaining compliant policies, and ensuring a healthy audit.

When I work with struggling credit unions, one common observation is an overemphasis on science and systems, with little attention to the artistic side of leadership. I fear these credit unions risk becoming part of the next wave of mergers (yes, based on many observations, there is a wave coming).

Thriving, successful credit unions embody a balance of science, art, and Zen. This balance is especially crucial for the smaller credit unions that comprise most of our space. As long as leaders maintain this balance, there’s no reason these credit unions can’t thrive long-term, despite what merger consultants may suggest. An abundance of smaller credit unions perform exceptionally well, with growth, revenue, strong cultures, and high community impact. These shops remain relevant and viable to the people they serve.

Reflect on your team's balance at the start of a new year. Are you too lopsided? If so, you’re likely seeing it in your results and, honestly, how the environment in your shop “feels.” Ask yourself: Is your team merely “maintaining” the credit union, or are you maximizing its potential? In today’s competitive landscape, an imbalance of science won’t be enough for long-term success. Being lopsided on the art side is terrible, too—but from my perspective, it's almost always the “art” side that is deficient at some level in the credit union world.

If you sense an unsafe or unsustainable imbalance, take action. Seek resources, shake things up, experiment, make technology or staffing changes, and commit to continuous improvement. This stuff is easy to write about but difficult to execute. But, if the future of your credit union is in question, what is your alternative?