It's the People, Stupid; PSCU's David Serlo Credits Employees with Firm's Success

ST. PETERSBURG, Fla. – David Serlo doesn’t bring it up much, but remembering the high school guidance counselor who told him that he would probably not be college material still makes him chuckle. “I guess I was just one of the ones who didn’t turn out like he expected,” Serlo said, after confessing that he holds not only a Bachelors of Science and Masters Degree from Indiana University of Pennsylvania but also an Executive MBA from Loyola College in Maryland. It is typical of Serlo, though, that an interviewer will have to specifically ask about his educational background in order to find out much about it. While he acknowledges the success he has attained in school and then in moving from being the then named Payment Services for Credit Unions’ first employee and CEO in 1983 to running the 700-employee strong PSCU Financial Services today, he is quick to credit the people he has worked with for much of that achievement. “You remember how in the Clinton campaign a while back the phrase was `it’s the economy stupid?’ ” Serlo asked. “ Well, with me it’s the people that matter,” he said. “The right people in the right position; that I believe is the difference between success and disappointment. Strategic planning, financial planning, processes and structure are all important ingredients to success, but if you don’t get the people process right, you will never reach your organization’s potential.” Outwardly Focused But Driven From Inside At first blush, Serlo’s recognition of the role PSCU’s employees have played in its success can seem anomalous since much of his early success had more do with his own sheer grit and effort than help from others. As described in Keith Harrell’s recent book, The Attitude of Leadership, Serlo grew up in Jeanneatt, Pennsylvania, a small town with its economic roots in the glass industry. Serlo’s father worked long hours in one of those factories until he retired while his mother worked long hours in a grocery store. The plants where he would work overtime to earn extra money were often cold and damp and frequently had rats. “I thought that if my dad was willing to put in long hours in that kind of environment so that he could pay for the education of my younger brother and me, then I was going to make the most out of every dime he spent,” Serlo said. The twin examples of seeing his parents work 10 hours a day for most of their lives and his own need to study very hard to overcome his early educational deficits have stayed with Serlo his entire life. That drive led Serlo to get his degrees, against his former counselor’s expectations, and then start at NCUA, where Serlo began as an examiner in 1970 after having taught business at a local high school while completing his advanced degree requirements. Serlo moved up through the ranks at NCUA, ending up as EVP of the Central Liquidity Facililty, until leaving to become CEO of PSCU. Serlo doesn’t single out any one experience as defining his growing awareness that people are the key to success, but definitely credits his time at PSCU for being his teacher. “I was the first employee of this company, and as the leader I consider it my duty to let our people know they are the most important assets,” Serlo explained. “One of the ways I demonstrate that principle is to be one of the first to welcome new employees to the company. Whether they are entry-level employees in the mailroom or senior executives, I meet them face-to-face and spend an hour or so talking about the mission statement and our corporate values. I let them know where their company is positioned, where it is going and where they fit into that picture,” Serlo said. That approach appears to pay off. A big part of PSCU’s effort with card management involves running card centers so that cardholders from the cooperative’s over 550 members can call at any hour to access their accounts, make changes, ask for credit line increases and perform additional functions. Call center employment has historically been a high turn-over, low morale line of work, but the firm has among the lowest turn-over rates in the industry, and actively regretted the employees it had to let go recently in the wake of some consolidation. That loyalty goes two ways as well. Serlo said that the leadership at PSCU is aware of the trend to outsource call center jobs to India and other offshore contractors, but he maintained that the jury is far from in on whether or not that would be a wise move for PSCU. “Certainly if you look at it from only a cost basis it can appear to make sense,” Serlo said. “But I think that it is not at all clear that the move necessarily makes sense in other ways,” he said. The focus on people can’t immunize the firm from all employee problems however, as Serlo found out last year when a 10-year employee was arrested as part of a credit card fraud scheme that had forced some PSCU members to take losses. True to his history, Serlo moved swiftly to help the affected CUs, and PSCU then filed suit against the insurance company to try to make back some of the loss. But Serlo said that the monetary losses were by far the easiest part of the incident for him. “I said it then that it felt like a punch in the stomach, and it still feels that way,” he said. “Trust and integrity are a key element of our business here and when someone fails to uphold our values it’s always a blow,” he said. But while PSCU has taken steps to provide even more safeguards for their members’ information, Serlo said that the firm has not backed off one bit from its conviction that people are the key to its success. So closely is Serlo associated with PSCU Financial Services that he is somewhat sheepish about admitting that he doesn’t have many activities outside of the firm. “After a routine 10-hour day there is not much time left,” Serlo noted. “You won’t find me holding the biggest fish or golfing or running across a finish line someplace. When I have not been at work I enjoy interacting with and supporting my children, reading some good books, going to the movies and traveling a bit,” he added. Serlo met his wife Tina in college and the couple has been married 33 years. They have reared three children, of whom Serlo is clearly very proud. Adam, 30, is already a dentist, and will be a medical doctor this December and specialize in a type of oral surgery in another three years. Mark, 25, is a recent graduate from Miami University (Ohio) and is employed at the Federal Reserve Bank of Chicago. He is looking for an opportunity to become a bank examiner. Katie, 23, is a full-time graduate student at Rollins College (Winter Park, Fla.) MBA program. She aspires to be an HR executive. Serlo said he just sees more growth for PSCU as the years go by and credit unions expand their fields of membership still further. “Given the growth potential of the credit union industry there is no reason to focus on any other market segment as our primary business opportunity,” Serlo said. “We have spent the past three years changing and redefining our firm. We are now well positioned to help our member-owners grow to their fullest potential. Credit unions should see us as a vehicle to help them achieve their new growth opportunities.” “One area that we are giving a lot of attention to includes the possibility of supporting all product lines of our member-owners in our 24 x 7 call center,” he added. “We have the infrastructure, dual backup, management bandwidth and experience, core competencies and we have earned the trust of credit unions over the past 27 years, and that should give us the foundation to build upon.” -