How Multifaceted Leadership Drives the Best Results in the Credit Union Industry

The honor of serving an organization on a leadership team is a constantly evolving challenge that pushes boundaries and requires a variety of strategies to accomplish successfully.

Particularly at large organizations such as a credit union, leadership needs to be nimble and diverse to be truly effective, but it also requires a framework or structure that can be widely applicable across teams and partnerships. All organizations require interdependence in order to optimize operational efficiency and efficacy.

Developing a leadership framework is the core of the challenge and probably some of the most enjoyable as well as rewarding work anyone will embark upon. The leadership framework needs to provide everyone a voice, provide clarity to roles/responsibilities, establish core values, identify model behaviors and ensure alignment throughout the organization. A common question among new leaders is, “How do you motivate every member of your organization/business unit toward a common vision without the ability to connect one-to-one on a regular basis?”

In the credit union industry, personal touch and company culture are key to success in every area of the business. Credit unions put people first and their leadership needs to embody this as a priority.

Create a Shared Vision for the Organization

As a credit union leader, it is critical to create a shared vision and purpose that is understood by the entire organization. This helps ensure that every individual understands their role in context to the organization, and helps protect their voice and ability to participate in the gains of the business.

Credit unions are not simply financial institutions. They are organizations that are founded to help specific communities with their financial needs. This is a fundamental aspect of the driving purpose for any credit union and this mission helps establish a shared vision for the organization.

However, a strong leader must learn to articulate this vision and ensure that it becomes a common language between every individual and department across the organization.

There are many strategies for accomplishing this, but one practical method is to develop core values for the organization, which are a fundamental aspect of any effective and aligned organization.

Core values and behaviors should be established, however it needs to be done thoughtfully, purposefully and inclusively, otherwise they will be accidental or worse, top down. Core values cannot be dictated. Core values act as a set of guiding principles for the team and create agreed-upon desired behaviors, which are internalized by the individuals and in the daily work of the organization.

The established framework of desired behaviors are a way to communicate to potential new team members the expectations and culture of the organization, while also providing a fast-track for new staff to help them understand the organization at a deeper level.

A Culture of Growth & Accountability Needs to Permeate the Entire Organization

From the career starters (entry-level positions) to the board of directors, it is crucial for a good credit union leader to develop a culture of growth and accountability through strong alignment throughout the entire organization. At the center of this focus is that members need to be placed in the forefront of the organization’s value proposition.

If the high-level vision, mission and purpose of a credit union is perfectly aligned with all stakeholders, then it becomes much easier to effectively guide the organization.

With a word of caution for potential oversimplification for the sake of this article, essentially it comes down to clear alignment between every coach/player relationship throughout the organization. Leading consulting firms have discovered that the average alignment between a manager and their direct reports (we call them coach/players at UCU) is between 47% and 51%. Depending on the number of layers within an organization, the alignment within an organization could easily fall to 12% and that is assuming everyone is executing the same as their industry peers.

An often overlooked, and probably one of the most important, alignments is that of the board of directors with the president/CEO, and then the leadership team.

Seven best practices to ensure organizational alignment are:

1. Establishing a clear and agreed upon framework of each group’s roles, including the board of directors, supervisory committee other volunteer positions, and the CEO.

2. Remember that the board of directors is the governing body for the credit union and it is impossible to govern when in operations.

3. The board of directors should focus on long-term strategies and be a partner to the CEO.

4. The organization should establish a process for communication, focusing on inclusivity of everyone in the business.

5. The organization should design work management systems that ensure alignment of daily activities and initiatives are within the established set of priorities, ultimately aiding in the achievement of the organizational strategy.

6. Education and continued research in this area will support the organization’s success.

7. Measure, monitor and improve organizational alignment.

Establish Frameworks of Success

In order to ensure strong alignment on a shared vision within a credit union, it’s important for leaders to establish frameworks of success in all areas of the business.

While individuals and departments require some level of independence and freedom to collaborate and pursue their own initiatives, successful frameworks need to persist across the organization to aid internal communication and provide boundaries that guide focus toward the mission at hand.

This extends to all types of systems including a standard communication system, work management systems, compensation structures, accountability systems, recruiting systems, talent development and all other areas that are core to the success of the organization.

As important as these frameworks are, it is even more critical to ensure that there is a high-level system in place that actively inspects, validates and improves those systems continuously. This helps ensure that the systems in place are actually effective and that they work as intended for supporting your teams against the unified vision of the organization.

Stakeholders Are the Best Indicator of Success

Leadership at a credit union is mutli-faceted, which means that there are many competing priorities and interdependent strategies at any given time. While a unified vision, a culture of growth and accountability and established frameworks for success are a hypothetical best practice for any organization, it’s important to acknowledge the reality of implementation and challenges that require constant iteration and adaptation to fully realize success as a credit union.

At any given credit union, there are multiple stakeholders with different needs and relationships with the organization. Ultimately, these stakeholders are the best indicator of success for any leader.

It’s important for leaders to connect with all of their stakeholders and actively seek out any potential pain points, and then relentlessly pursue removing any of the friction that they may be experiencing. A leadership methodology like this pursues excellence across an organization and ensures that a people-first perspective is always maintained.

Dr. David L. Tuyo II is president/CEO of the $954 million, Los Angeles-based University Credit Union.