Johnson Approaches 17 Years Leading CUES; Membership at All-Time High

MADISON, Wis. – As Credit Union Executives Society CEO Fred Johnson approaches 17 years leading the association, he says CUES is more focused than ever on its core mission, professional development. CUES is not a trade association. It does not lobby. It is comprised of individuals, not credit unions. It was originally founded as a professional development arm of CUNA. It was later moved out of CUNA to ensure it stayed away from the political issues CUNA deals with, and so that it could become a self-sufficient organization. Credit Union Times’ founder and former publisher Mike Welch served as CUES CEO during its transition phase away from CUNA, and played a critical role in shaping the organization in its early independent days. Currently, CUES has some 4,000 executive members, an all-time high, said Johnson. Contrary to what many may think, said Johnson, CUES is not just for credit union CEOs. Of its 4,000 members, 52% are credit union CEOs. “One thing that gets lost with people is CUES isn’t just about CEOs. It was never a CEO-only organization. Today, we’re penetrating much deeper into larger credit unions,” said Johnson, meaning executive vice presidents, senior vice presidents, chief financial officers, etc. have become a major part of its membership. It also draws a lot of members from marketing (11%). Many may view CUES as an elite group only for large credit unions. Again, not true, said Johnson, though large CUs are a big part of its core. But 34% of its membership is from credit unions under $100 million. “We’re about improving professional development of our members so that they have successful careers and their credit unions are successful,” said Johnson. Johnson, 63, has a strong military background. A graduate of West Point, his first taste of credit unions came as a young man when he served as a board member at West Point FCU. He had no idea that years later he’d be offered a credit union job that would turn into what he describes as the greatest job he’s ever had. Johnson was recruited for the CUES job while he was serving as a consultant for a small company on the East Coast that worked with Fortune 100 companies on organizational development. “One of my friends had seen the announcement about the job and said, `boy this looks like your resume”,” said Johnson. He’s never looked back. “This is the best job I’ve ever had. I think that says a lot because in my military career I’ve been rewarded with some incredible jobs. I’ve commanded [Army]Rangers into combat,” he said, referring to a tour of duty in Vietnam. He said commanding in Vietnam taught him that you have to walk the walk and talk the talk to get people to follow. He recalled a story of a credit union CEO who had a backdoor entrance to his office. Staff rarely saw him come in in the morning or leave at the end of the day. Johnson says that’s not leadership and he takes the opposite approach. He makes sure he sees or talks with all of his staffers at least once when he is in the office. “People want to know you care about them, and you learn, they’ll tell you what they’re thinking,” he said. But he’s not always in the office. The nature of the job requires he be on the road approximately 150 days a year. He said he would only travel so often for a job he truly enjoyed. “Anyone who travels a lot for work knows it’s not glamorous, you have to love what you do,” said Johnson. CUES has grown and evolved under Johnson. When he joined revenue was approximately $2.7 million and there were 27 employees. Today, revenue is approximately $14 million and it employs 53. Like a CU, it has to manage growth. Johnson said for a few years there revenue was growing 10% a year. It didn’t give money back in the form of a dividend, like a CU, but it did freeze dues and some conference fees. “I tried to cut down our reliance on dues. Trade groups have larger dues typically. They’re lobbying mission is very different. In our case we see dues like a tax, we try to make it more fee-based,” said Johnson. CUES’ membership costs $595 a year. Johnson said about 40% of its revenue comes from its institutes and meetings. Johnson believes strongly in executive education and said it has been one area of evolution for CUES as the program has expanded dramatically. CUES Institutes train executives in a university setting. “I had been a part of this when I was in academia, setting up master level programs at colleges. I discovered if you went to colleges with money in hand, they’d set up a program. If you talk to presidents of universities now they would tell you the one growth area is executive education,” he said. Johnson said many veteran credit union leaders started their credit union careers right out of college or even high school, so he saw the need for some graduate level credit union education. He said a lot of seasoned credit union CEOs are very bright and talented but never took the next level of education because of their commitment to their families, or it just wasn’t typical back then, especially for women CEOs. Back To School One of CUES’ most popular programs is its CEO Institute, created in 1995. It is comprised of three one-week courses (there are three levels) held at three different universities. CEOs take one course per year for three years. Upon completion, participants can sport the Certified Chief Executive designation. So far 254 credit union professionals have completed the CEO Institute. This year they will be held at The Wharton School at the University of Pennsylvania, Cornell University and University of Virginia Graduate School of Business Administration. They’re not cheap, they can cost upwards of $8,000. Johnson said he modeled the CEO Institute after the modern executive MBA program, where students can go to class a few weeks a year or on weekends over a number of years to get their MBA. “CUNA started with its Stanford program, an executive development program. CEOs loved it but they wanted more. My idea was to set up a three-year program and do different things at different universities. The cache’ was very important to me. You walk into any professional’s office and you see certificates on the wall. People see those as very important,” said Johnson. CUES also has director programs. CUES Directors Educational Forum (DEF) division has 3,700 members. “It (DEF) is a division of CUES. In the mid to late `80s CUES decided it had to make sure directors understood the operations of their business. A lot of directors were blue-collar guys who were not necessarily adept at credit union operations,” he said. Johnson thinks director education is incredibly important for the industry as it faces new challenges. He believes directors hold the key for one of the industry’s most difficult challenges. “I think one of the real criminal things in our business is how underpaid our CEOs are when compared to CEOs in the banking community. Board members have to take a look at what comparable CEOs are making.” He noted that directors have to take their own careers out of the equation. He gave the classic example of an education credit union. “A board member might say the CEO earns more than the school district’s superintendent of schools, and think that’s not right. But what does that have to do with anything? I’ll quote a former head of Harvard University who said `If you think education is expensive, try ignorance.’ Try succeeding with an unqualified CEO,” said Johnson. For directors, CUES offers its Directors Leadership Institute held overseas at the prestigious London Business School. Some criticize credit union conferences held out of the country as unnecessary expense, but Johnson says directors will be taught by professors that they never would have access to in the U.S. Johnson said location does play a role in any conference, but it only goes so far. “It’s like selling real estate, location, location, location. You can get people the first year with location, but it has to be valuable to their professional development or you couldn’t do it again,” he said. CUES has pulled the plug on certain universities if it was unhappy with how its education program was presented. Johnson cited Northwestern University as an example. It also doesn’t do cruise conferences any more. Johnson said with only two days at sea for education, he had a hard time looking in the mirror. Networking Nexus Johnson believes networking goes hand in hand with professional development. Its conference lineup is one place for valuable networking to take place. “A major reason CUES was founded was networking. We have it in-person and online. We like to tie them together.” CUES is holding its CUES Symposium 2006: A CEO/Chairman Exchange in Maui next week. It is expecting 290 attendees. CUES’ conferences have evolved as well. CUES at one point held one of the largest conferences in the industry. Johnson said conference competition has gotten tougher over the years with a strong set of national conferences, yet a number of smaller boutique conferences gaining ground from all sorts of organizations. CUES now holds seven national conferences a year. Other networking facets of CUES include its CUESNet, a listserv. Johnson said it’s been wildly successful. He’s learned a funny thing about CUESNet. He was always hearing from CEOs of very large CUs that they’re on CUESNet all the time to see what people are talking about – they love it. Yet Johnson never saw them participate. “I tell them I never see them on there. They don’t participate, they watch. The billion dollar CEOs know their act of participating in the talk would change how people interact. The act of observing would change the observation,” said Johnson. It’s not all controversial talk on CUESNet. In fact, said Johnson, there is a lot of mundane talk. Someone might be talking about car repossessions or how they lost a key loan officer, mundane but all vital to CU operations. Johnson is dealing with some difficult issues in his personal life that have made him appreciate the industry he works in even more. His wife Linda is fighting lung cancer. “People hear lung cancer and think you smoked or grew up in a house with smokers. She didn’t. She’s just part of that 15% of nonsmokers who get it,” he said. The credit union industry has helped him stay strong. He’s been overwhelmed by the calls and notes of support he’s received from credit union leaders, and that’s what makes credit unions so unique, he said. Sadly, Johnson has been through this before. His first wife, Diane, died of a brain tumor, also a form of cancer. The chemotherapy caused her to have renal failure. “Ironically my boys were about the same age as our two boys are today.” Johnson has four boys, two from his first wife, and two from his second wife. He said he’s fortunate that he has “a damn good board” that allows him to take the personal time he needs. He’s become active in local lung cancer foundations and believes there is good in every situation. “Obviously there is some reason she got this. You have to believe there is a greater good, maybe all the people she’s touched through this,” he said. Johnson believes a successful life can’t just be success in business, family has to be the core. “I tell my boys never do anything to dishonor your family, they are who you can always count on.” And CUES has counted on Johnson for the last 17 years to take care of its family. [email protected]