Culture Transformation Spurs Exceptional Credit Union Growth

By all accounts, Redstone Federal Credit Union was doing well in 2014. It was hitting all major metrics that deem a credit union successful.  It was good … but good wasn’t good enough!

The organization was growing; work was being done; members were being served. Like a large ship, the 840-employee Redstone was on course to another successful year.

As any great leader does, Joseph Newberry, president/CEO, started to ask some tough questions about Redstone’s long-range growth, its ability to ride out the rough currents and its ability to continue meeting its members’ ever-changing needs.

An employee survey gave Newberry many of the answers he needed to right the ship and set it on a course for success – regardless of the economic forecast.

The survey uncovered issues that related directly to Redstone’s culture:

• Employees were not aligned with a common agenda. Everybody was working hard, but on their own agendas – in their own silos.
• There was a perception that the leadership team didn’t work well together.
• Non-managers believed the strategic plan was developed, planned and implemented by senior executive staff with little input from the masses on how to make it a success.

If Redstone was doing well now, Newberry wondered, “How much better could we be if we got our culture right?”

Culture is the element that transforms organizations from great to excellent, Newberry said. “For organizations that want to make an impact and for CEOs who want to leave a legacy, great is not good enough.”

At Redstone, culture has become the engine that drives its performance, he said. “We focus on culture because it produces organizational results and guides the way we think.”

He cited a report from the Filene Research Institute that suggests the stronger the culture, the greater the organization performs, measured by tangibles such as ROI, net income, sales growth and cash flow. Without a strong culture, an organization lacks accountability and performance management, according to the report.

Corporate culture is simply the way people think and act within an organization. To change the results you get, you have to change the beliefs that people hold.

What does that look like in a credit union driven by a common purpose and working toward the same results? Its employees have the authority to make decisions and not just “do their jobs.” Its employees feel accountable for the success of the company and take pride in the company they work for. Its leaders are passionate about what they do.

A Journey of Cultural Transformation

Over the past four years, Redstone has embarked on that cultural journey – a journey to transition its culture to one of accountability.

“We decided to focus on a culture of accountability – one that would drive the right results. One where we could say, ‘One organization, one team and one mission,’ and live it,” Kathy Neyman, senior assistant vice president for culture and leadership, said. “We needed to get to the point where every employee believed that their job here is just as important as any other job, and that includes the CEO. You matter and what you do every single day leaves a footprint on this organization.”

Turning a ship around isn’t easy. In fact, transforming a culture can be a three- to five-year process.

Knowing that any true change must begin at the top, that’s where Newberry began.

After conducting a Focused Accountability Activity, each assistant vice president and above identified perceptions they believed others held about them that got in the way of the credit union being successful.

Executives Throw Out Old Baggage

One of those beliefs was that the executive staff did not get along, so Newberry decided they would bury the hatchet – literally and figuratively.

Neyman made paper hatchets, cut them out and gave one to each executive. They were to write on it all of the “old baggage” that was getting in the way of them working together to achieve results. On a cold February day, they all stood around a hole about two feet wide and two feet deep on the credit union’s property and tossed those wadded-up hatchets in it. They buried the hatchets.

From there, the executives showed they are not only engaged in the culture transformation process, but actively involved by regularly facilitating Accountability Workshops that all employees are required to attend.

What does that cultural transition process entail?

• Determine what kind of culture your organization needs.
• Ensure all new employees are trained and work to retrain existing employees.
• Take a tactical and strategic approach to managing culture.
• Integrate the culture in every opportunity – meetings, coaching, conversations and daily interactions – to live out the change you want to see.
• Identify those employees in your organization who are culture champions. Then devote the time and resources to develop their skills.

How do you know your culture is strong and working? At Redstone, its growth tells the story. Growth – in nearly every area – went through the roof.

Redstone has experienced breakthroughs in cross-collaboration and strategic alignment, surpassing its previous metrics and achieving maximum-tier goals. Other examples of that growth include the following:

• Loans grew by 1,052%;
• Average annual noninterest income grew by 55%; and
• Average annual total member giveback grew by 1,179% – in addition to dividends paid on deposits.

Together these figures equal more than 40% of net income given back to Redstone members.

Plus, Money magazine named Redstone the best bank in Alabama in 2017, and this June, Redstone was named Credit Union of the Year by NAFCU. And at the Business Transformation & Operational Excellence World Summit, Redstone won the highest honor – the Platinum Award – for Best Achievement in Organizational Operational Excellence.

But beyond the corporate and industry successes, the environment of the company is different, Neyman said.

“Employees serve each other internally now,” she said. “We partner with each other and are seeing cross-cultural collaboration today that we have never seen before. We have created a culture that will ensure the success of Redstone for years to come.”

Fred Trusty is EVP and Chief Marketing Officer for Redstone FCU. He can be reached at 256-722-3575 or ftrusty@redfcu.org.