How Workplace Culture Drives Performance

“After you go through something like that with your team, you realize how much you need them, and how you need to show and prove to them how much you appreciate them – and make them realize that success is not possible without them,” Wieczorek, who now serves as president/CEO of National Institutes of Health Federal Credit Union, said. “It prepares you for the challenges, and I felt like going into this – the pandemic – that I could draw on some of the things I had learned through that experience.”

Wieczorek and other credit union leaders from UMe Federal Credit Union and Redstone Federal Credit Union have understood that treating employees well is essential for driving strong member and loan growth every year. Having a positive workplace culture means a credit union cares about its employees’ well-being, nurtures their career development and respects their work-life balance. What’s more, sustaining a positive workplace culture means investing in leadership development at all levels of the organization, credit union HR executives said.

In today’s pandemic economy that triggered last year’s Great Resignation, when millions of people quit their jobs, a positive workplace culture is more important than ever. Many companies, including financial institutions, are scrambling to attract new employees. The No. 1 concern among 63% of credit union executives this year is their organization’s ability to attract qualified talent, according to a new annual survey released in January by the Scottsdale, Ariz.-based Cornerstone Advisors, a management and technology consulting company for credit unions, banks and fintechs. That percentage was way up from 19% in 2021 and 2020.

While offering higher salaries and better benefits is essential to attracting and retaining productive employees, new research published by the MIT Sloan Management Review in January showed a toxic corporate culture is “by far the strongest predictor of industry-adjusted attrition and is 10 times more important than compensation in predicting turnover.”

“Our analysis found that the leading elements contributing to toxic cultures include failure to promote diversity, equity and inclusion, workers feeling disrespected and unethical behavior,” the study’s synopsis read.

When Wieczorek joined NIHFCU in Rockville, Md., as its new CEO in 2014, the culture was not healthy.

“There was a lot of distrust in the organization,” he recalled. “I don’t want to get into the details, but it wasn’t a very healthy environment. What I did see was that there were a lot of people in the organization who really cared about the credit union, starting with the board and employees. But I knew [regaining that trust] was not going to happen overnight.”

So NIHFCU executives and board members held dialogues with their 125 employees at town hall sessions.

“We encouraged employees to talk about how they felt about the credit union, and the issues and problems they saw,” he said. “So I think it was just kind of creating an environment where we needed to be brutally honest with ourselves about what we can do to improve our working environment. We did everything we could to make sure that employees did not feel like there would be any kind of retribution for speaking their minds.”

The credit union established a committee to recommend workplace changes and improvements, and executives would meet with employees over coffee sessions or at restaurants to talk about developments.

Over time, the credit union’s executive team and board began to see their initiatives work throughout the organization, but what amplified their efforts was the pandemic.

“The challenges of the pandemic brought us together even closer as an organization,” he noted.

Wieczorek’s performance dashboard includes two gauges – one that measures member satisfaction and one that measures employee satisfaction. During the COVID crisis, he noticed employees and members agreed with a key survey question that the credit union looks out for them.

“That’s when I saw our culture coalesce, and I am really proud of our executive team, our board and our staff for achieving that,” he said.

The credit union’s culture improvement efforts have also contributed to its growth. Over the last five years, for example, the credit union’s assets have increased from $612 million to $834 million, while loans climbed from $380 million to $419 million from 2017 to 2021. Within the same time period, its membership has expanded from 38,791 to 47,154, according to the credit union’s Call Reports.

Robert Einstein, president/CEO of UMe Federal Credit Union in Burbank, Calif., learned from his predecessor that maintaining a strong, positive culture relied on always taking care of the credit union’s 40-person staff.

The biggest shift in the credit union’s culture began after ­Einstein became CEO 12 years ago. The cooperative completed an extensive rebrand and changed its name from Burbank Community Federal Credit Union to UMe.

“It’s you plus me. It’s so simple. This is why we love it, and it clicks so well. It’s the connection with our members that matters most,” he said. “Culturally, we needed to communicate that connection.”

This shift became one of identifying and communicating the credit union’s values, purpose, service, brand, attitudes and goals to members and the community together with UMe.

“When you see us in the community or you call us or you see our brand online, you know it’s UMe, you’ll feel that connection,” Einstein explained. “All of these details are important to us –nothing is too small and everything is important, which has defined our culture internally. So when everything is important, so is our staff and they know that.”

Since becoming CEO, Einstein has participated in the interview process for all new hires.

“I felt like it’s something I can do to help give feedback to the hiring managers and help keep our culture consistent and strong. I am proud to say over the last 12 years, all new employees in every position have been interviewed by me,” he said. “And it’s pretty surprising for the prospective employee, including an entry level position like a teller, to meet the CEO on their second interview. But I think it shows them the value that we give to every position in our organization.”

Einstein described his staff as a “quirky bunch,” who are given the freedom to do their jobs and keep learning.

“Another part of our culture is to have fun,” he said. “In addition to community events, we would host a lot of activities such as going to baseball games and comedy shows.”

During the pandemic, those fun activities had to be temporarily suspended, but Einstein and his executive team pivoted to helping staff with childcare challenges, bringing in snacks and food to the office, relaxing dress codes and installing remote work capabilities for most employees.

During Einstein’s tenure from 2010 to 2021, UMe’s assets have grown from $127 million to $315 million, while its loans have increased from $48 million to $100 million. Within the same time period, membership has expanded from 11,775 to 16,187, according to the credit union’s Call Reports.

“I don’t think we would have had that growth if it weren’t for our attention to details, our culture and our brand,” Einstein said.

Focusing on the details to transform its culture eight years ago became a mission for Redstone Federal Credit Union. Although the Huntsville, Ala., credit union was meeting or exceeding its financial performance metrics, President/CEO Joseph Newberry asked a critical question: “How much better could we be if we got our culture right?”

“I will quote this from our president, and I think this is the way we have defined our culture from day one,” Jan Bias, EVP of people and culture at Redstone, said. “We look at culture as the way we think and behave. We have a saying around here that culture eats strategy for lunch, and if you don’t have the culture in place all of the other stuff doesn’t matter.”

Wendy Edmonds, Redstone’s vice president of human resources, added that the credit union tries to keep its culture very simple in that everything focuses on being accountable for the member experience.

“Our culture is about why we’re here, why we do what we do and who we serve,” Edmonds said.

In 2015, Redstone opened a culture and leadership division that was run by one employee. Today, five employees operate the division.

To keep cultural values top-of-mind among its 1,200 employees, Redstone trained more than 130 team members to be cultural ambassadors. There are at least two cultural ambassadors in every branch and division of the credit union. The ambassadors organize huddles with staff to ensure they are putting into practice the credit union’s cultural values of respect, integrity, soundness and excellence.

What is also key to sustaining Redstone’s culture is its leadership development curriculum, which provides extensive education and training for executives, management and staff. What’s more, through a selection process, about 20 employees are invited every year to enroll in the leadership development program.

Since Redstone launched its culture initiative in 2015, its assets have grown from $4.2 billion to $7.4 billion in 2021, while loans have increased from $1.3 billion to $3.1 billion in the same time period. Additionally, from 2015 to 2021, Redstone’s membership expanded from more than 373,000 to nearly 664,000, according to its Call Reports.

Because many organizations now have five generations of employees, the workplace has become more complex and challenging, noted Laurie Maddalena, a former credit union HR executive who now heads an executive coaching and leadership development consultancy, Envision Excellence, in Laytonsville, Md.

“We still have a lot of traditional leaders who have no idea how to manage five generations and the best practices of what’s necessary to attract and retain talent today,” she said. “If leaders don’t have the skills or are just struggling, that’s when engagement with their employees goes down.”

Maddalena suggested credit unions establish a leadership culture in which executives, managers and supervisors are given the training, education, tools and time to help them develop professional relationships with employees who are looking for meaningful feedback, coaching and career development. One way this can be accomplished is by helping leaders develop their emotional intelligence or emotional quotient.

“I think the best companies are those that see an opportunity to think differently about how they can create a new culture model that will support employees’ well-being, goals and future,” she said. “I love the book ‘Firms of Endearment,’ which features research on companies that actually took an interest in their employees and stakeholders, and how over time these companies significantly outperformed the good to great companies in Jim Collins’ book [‘Good to Great’].”