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Too Much of a Good Thing: The Hidden Perils of Capital Hoarding

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by That One Consultant You Hired and Then Ignored

If you’re a board member at a credit union, chances are you’ve said it. Maybe in a hushed boardroom voice, maybe with great conviction over lunch, maybe carved into stone tablets. It goes something like this:

“You can never have too much capital.”

Cue the heavenly choir and the flutter of regulatory examiners descending on clouds of GAAP. Capital, after all, is safety. Capital is security. Capital is your warm, fuzzy blanket on a cold night of economic uncertainty.

Except—and please, clutch your pearls tightly here—you can have too much of it. Yes, really. And when you do, it’s not just inefficient. It’s strategically dangerous.

Let’s talk about it, shall we?

Capital: From Safety Net to Strategic Straitjacket

First, let’s get the obvious out of the way. Capital is good. Regulatory capital is essential. You need it. The NCUA says so, and if the NCUA says jump, most credit unions are halfway to orbit before they ask how high.

But capital is a tool, not a trophy. When your capital ratio drifts into the teens— 13%, 14%, 15% and beyond—you’re not just safe. You’re overdressed for the occasion.

Imagine showing up to a beach party in full medieval armor. That’s what it’s like running a 15% capital ratio in today’s credit union market. Impressive? Sure. But also a bit ridiculous, and not particularly helpful when it’s time to swim—or compete, innovate, or grow.

The Law of Diminishing Return on Paranoia

Many boards live by a simple mantra: More capital equals more safety. It’s neat. It’s easy. It’s… mathematically adorable.

But here’s the truth: every extra dollar of capital that sits unleveraged on your balance sheet is a member dollar not working, not producing value, not returning benefit.

Imagine telling your members, “We’ve taken your money, and we’re keeping it locked away in a vault, doing nothing, because someday the sky might fall. And if it doesn’t? Well, at least we felt warm and fuzzy.”

Not exactly the value proposition credit unions are known for.

And if your board’s idea of risk management is “hoard capital like it’s 2008 and Ben Bernanke just texted ‘brace yourself,’” then you’ve essentially traded strategic growth for a very expensive security blanket.

The Catastrophe That Never Quite Arrives

Boards often justify massive capital buffers by invoking a theoretical calamity so devastating it would make Mad Max look like a municipal planning meeting.

“We need to be ready for the worst-case scenario.”

Great. Let’s play that out.

Say a 500-basis-point rate shock, a recession, a regulatory overhaul, and a complete collapse of consumer confidence all hit at once. Terrifying? Yes. But unless your balance sheet is made entirely of subprime balloon loans and wishful thinking, the odds of such a cataclysm wiping out your 10% capital buffer and then some are vanishingly low.

And even if it did, your regulator is unlikely to high-five you for sitting on a 15% buffer when 12% would have sufficed and the other 3% could have been used to actually serve members. You don’t get a trophy for hoarding potential.

The worst-case scenario your board keeps preparing for has a name: it’s called opportunity cost. And it’s happening right now, quietly, while you congratulate yourselves on your capital ratio.

“But the Regulators Like It!”

Sure. And your dentist likes it when you floss twice a day. Doesn’t mean it’s a viable identity.

Yes, regulators appreciate strong capital. But they also value operational effectiveness, loan growth, membership value, and risk-informed decision-making. They don’t want to see you building capital castles while the market passes you by.

Running a credit union solely to appease your examiner is like designing a car for your mechanic. Sure, they’ll love the engine access, but no one’s going to buy the thing.

There is a term for what happens when capital accumulation becomes the mission rather than the means: pathological aversion to lending. It shows up in your Call Report. It shows up in your loan-to-share ratio. And eventually it shows up in your membership numbers, as the members who actually needed a credit union found one that wasn’t afraid to be one.

Strategic Growth: Now Hiring Capital

Every dollar sitting in capital at a 14% ratio—when 10% would suffice—is a dollar not deployed into strategic initiatives. That’s a new loan program not launched, a branch not modernized, a digital upgrade not implemented, a member segment left underserved.

You are, quite literally, overcapitalized and underutilized. That’s not caution—it’s stagnation dressed up as virtue.

And CEOs? If your board is holding you hostage with ultra-conservative capital policies, congratulations: you’ve been promoted to Chief Preservation Officer. Your job is to sit on a pile of money and politely decline to use it. You will be evaluated on how well the pile stays piled.

That’s not strategy. That’s surrender with excellent documentation.

The PR Problem You Didn’t Know You Had

There’s also a transparency problem with excessive capital. NCUA Call Reports are public. Peer comparisons are available to anyone who cares to look. And when your capital ratio sits at 15% while your peers are competing effectively at 10%, people start asking questions.

Why is this credit union sitting on all that capital?

Is it strategic discipline? Institutional caution? Or is it, perhaps, a board that has quietly confused accumulation with achievement—and hasn’t noticed that the members stopped benefiting from either?

The story the market tells about an overcapitalized credit union is rarely flattering. It usually rhymes with “afraid” or “stuck.” Neither is a brand position worth defending.

So, What Should a Board Do?

Ah, finally, solutions. You were getting anxious, weren’t you?

  1. Set a capital target, not a capital shrine. Create a realistic, risk-informed capital target based on actual scenario modeling—not vibes, not trauma from the Great Recession, not the vague sense that more is always better. A target implies a ceiling. A shrine implies worship. Know the difference.
  2. Regularly reassess the buffer. If you’ve carried 300+ basis points of excess capital for five consecutive years, that’s not a buffer—that’s a moat. And you’re the dragon asleep in the middle, guarding assets your members can’t access and your mission can’t use.
  3. Tie capital deployment to strategy. Capital should be the fuel for your mission, not a museum piece. Lend it. Invest it. Modernize with it. The cooperative model was not designed to produce the tidiest balance sheet in the graveyard.
  4. Educate the board—yes, again. A board stuck in the “more is always better” loop may need a structured conversation about how capital, risk, and growth actually interact. This is not an insult. It is a fiduciary necessity. Hoarding is not a strategy. It is a habit. And habits can be broken.

Closing Thoughts from Your Favorite Snarky Consultant

No one is asking you to gamble with your capital. Prudent reserves matter. Regulatory compliance matters. The ability to weather a genuine storm matters.

But don’t confuse risk management with strategic paralysis. The real danger isn’t the next economic downturn—it’s the slow erosion of relevance while your capital ratio quietly creeps toward 16% and your members quietly wonder why nothing ever changes. Why the rates aren’t better. Why the app still looks like that. Why the loan got declined when the bank down the street said yes.

So be brave. Be strategic. Be willing to sweat a little. And for the love of all that is cooperative and not-for-profit, stop worshipping at the altar of excessive capital.

Because in the end, the goal isn’t to die the richest credit union in the graveyard.

It’s to live boldly enough that your members actually notice.

———

Word count: ~1,100

The 600-Dollar Question: When Board Oversight Becomes Death by Interrogation

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There is a moment that happens in credit union boardrooms across America. It is the moment when a well-meaning director leans forward, adjusts their reading glasses, and asks the CEO: “Why did we spend six hundred dollars on those new break room chairs?”

by That One Consultant You Hired and Then Ignored 

The CEO—who has spent the past week negotiating a $40 million loan participation, managing a core system migration, and quietly talking the compliance officer off a ledge—takes a breath. A long breath. The kind that has a legal team and a therapist on speed dial baked into it.

This is not governance. This is archaeology. And unfortunately, it is extremely common.

The Oversight Paradox

Here’s the dirty secret about board oversight: done poorly, it doesn’t protect the organization. It quietly suffocates it.

Oversight exists for excellent reasons. Boards are the stewards of member assets, the guardrails of institutional integrity, and the last line of defense against the kind of strategic disasters that end up as case studies in graduate school. Good oversight is invaluable. Necessary. Even heroic, on a good day.

But there is a version of oversight that has drifted—slowly, with the best of intentions—from “strategic accountability” into “interrogating the invoice for printer toner.” And that version is doing real damage.

The paradox is this: boards that ask too many small questions are usually avoiding the big ones. It’s easier to audit the break room chairs than to have a difficult conversation about whether the five-year strategic plan reflects anything resembling current market reality.

*To dig in further on why we do this, revisit our blog on “Bikeshedding and Boards.” It’s our brain’s fault.

A Field Guide to Interrogation Styles

For identification purposes, here are the most common species of oversight-gone-wrong, observed in their natural habitat:

  • The Archaeologist. Asks detailed questions about decisions made six to eighteen months ago. Loves phrases like “Wait, when did we approve this?” Finds comfort in relitigating the past, possibly because the past is safer than the present.

 

  • The Micromanager in Disguise. Frames operational questions as governance concerns. “I’m just asking” is their signature opener. Recently wanted to know why the CEO chose FedEx over UPS for a document shipment. (True story. Or close enough to be true.)

  • The Second-Guesser. Waits until a strategic decision has been made, implemented, and is showing early results—then raises concerns about it. Thrives in hindsight. Has strong opinions about the road not taken, mostly because they don’t have to drive it.

 

  • The Gotcha Questioner. Doesn’t actually want an answer. Wants to demonstrate that they spotted something everyone else missed. Questions arrive pre-loaded with implied conclusions. “Isn’t it true that…” is a preamble, not a question.

None of these directors are villains. They are, almost without exception, people who care deeply about the credit union and are expressing that care in the wrong direction. The problem is that their questions consume the room’s oxygen—time that could be spent on strategy, member impact, or the seven other agenda items patiently waiting their turn.

What This Actually Costs

Let’s talk about the real price tag, because it’s considerably higher than six hundred dollars.

When boards slide into interrogation mode, several things happen. First, the CEO and senior leadership start preparing for board meetings the way defendants prepare for depositions. Every decision generates a paper trail not because it’s strategically useful, but because someone will ask. Defensive management is expensive, time-consuming, and demoralizing. It is also, in a tragic irony, the least strategic thing a leadership team can do.

Second, risk appetite shrinks. If every initiative is subject to retroactive cross-examination, smart leaders learn to propose only what’s safe. Bold moves get quietly shelved not because they’re wrong, but because they’re hard to defend under fluorescent lights to an audience with a prepared list of skeptical questions.

Third—and this one is genuinely painful to watch—good CEOs leave. Not dramatically, not all at once, but gradually. They stop bringing their best ideas to the board because the board has trained them not to. Eventually they bring their ideas somewhere else. Often, that’s a different credit union.

The Question Behind the Questions

Here is something worth sitting with: when a board asks too many operational questions, it is almost never really about the operations.

It’s about trust. Or the absence of it.

When a board genuinely trusts its CEO—when there is transparency, consistent communication, and a shared strategic framework—operational minutiae stops being interesting. The chairs cost six hundred dollars? Fine. The CEO made a call, the call was reasonable, let’s talk about the loan-to-share ratio.

But when trust is thin, everything becomes a data point. Every expense is a clue. Every decision is potential evidence of something. The interrogation is really a trust deficit wearing a governance costume.

If your board is regularly diving into operational weeds, the most useful question isn’t “Why did we buy those chairs?” It’s “Why don’t we trust the person we hired to make that call?” That conversation is harder. It is also the only one that actually fixes anything.

What Good Oversight Actually Looks Like

Good oversight asks hard questions—at the right altitude. It is the difference between “Why this vendor?” and “Does our vendor management policy reflect current risk exposure?” One is a transaction. The other is governance.

A few principles worth adopting:

  1. Ask about policy, not purchases. Your job is to ensure the right frameworks exist—not to audit individual decisions made within those frameworks. If the CEO has spending authority up to $25,000, don’t ask about the $600 chairs. Ask whether the spending policy itself is still fit for purpose.
  2. Interrogate strategy, not symptoms. The second-guessing instinct usually points to a real concern buried under an unhelpful question. Surface the real concern. “I’m worried our operating expenses are drifting” is a governance conversation. “Why does the coffee machine cost this much?” is not.
  3. Distinguish accountability from hostility. Accountability means holding leadership to agreed-upon standards, with transparency and fairness. Hostility means treating every board meeting like a deposition. One builds a stronger organization. The other builds a stronger résumé for the CEO’s recruiter.
  4. Build the trust infrastructure. Regular CEO evaluations, transparent dashboards, clear strategic KPIs, and an open-door culture for candid conversation—these reduce the need for interrogation because they replace anxiety with information.

Closing Thoughts: The Right Questions Are Hard

There is a version of your board that asks fewer questions and governs more effectively. That board has done the hard work of building trust, aligning on strategy, and distinguishing its role from management’s. Its questions are rarer, sharper, and more consequential. Its CEO sleeps better. Its members are better served.

And yes, it probably has nicer break room chairs. Because someone made a reasonable call and nobody needed to schedule a follow-up to discuss it.

The goal of governance isn’t to catch the CEO doing something wrong. It’s to make sure the institution does something right.

Those are very different jobs. It’s time more boards knew which one they showed up to do.

Plans from Which We Deviate: The Joys of Strategic Planning for Credit Unions

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By Kevin Smith

“Plans are useless, but planning is indispensable.” – Dwight D. Eisenhower.

Dwight D. Eisenhower

Dwight D. Eisenhower

Dwight D. Eisenhower, a man who knew a thing or two about logistics, once made this insightful remark about planning. Since his time, the philosophy of planning has evolved, giving us NASA’s Dr. Laura Gallaher’s version: “Plans from which we deviate.” If that isn’t the most honest and depressingly accurate description of strategic planning, I don’t know what is.

Dr. Laura Gallaher

Dr. Laura Gallaher

For credit unions, strategic planning is not just a fun corporate retreat where executives pretend to be excited about PowerPoint slides. It’s an annual exercise in educated guesswork, wishful thinking, and attempting to predict the future with the accuracy of a weather forecast in the middle of hurricane season. The real value of planning, as Dr. Gallaher puts it, is not the document itself, but the process of thinking through how to react when reality inevitably ignores our best-laid plans.

The Art of Predicting the Unpredictable

Strategic planning is often presented as a structured and rational process, but let’s be real: it’s an exercise in educated fortune-telling. Credit unions operate in a world where economic shifts, regulatory changes, technological advancements, and the ever-evolving expectations of members make long-term planning feel like building a sandcastle at high tide.

Consider the many external factors credit unions must navigate:

  • Economic downturns: Because nothing says “stable financial future” like an unpredictable market.

  • Regulatory changes: Just when you think you understand the rules, a new compliance update appears like an unwanted sequel to a bad movie.

  • Technology disruptions: Fintech startups and AI-powered everything are here to remind you that whatever system you’re using is probably already outdated.

  • Member expectations: People want convenience, security, personal service, and cutting-edge tech—all at the same time, immediately, and preferably for free.

Given these moving targets, it’s no wonder that strategic plans are more useful as artifacts of optimism rather than actionable roadmaps.

The Illusion of Control

One of the great myths of strategic planning is that it gives leaders a sense of control. You can map out all the goals, objectives, and key performance indicators you want, but at some point, reality will step in and say, “That’s cute.”

It’s much like plotting a cross-country road trip with detailed stops and scheduled breaks, only to find that half the roads are under construction, your GPS reroutes you through a cow pasture, and your car develops an unexplained rattling noise somewhere in Kansas.

At best, a strategic plan gives you a general sense of direction—like a compass in a storm. It helps credit unions establish priorities, allocate resources, and identify potential risks. At worst, it’s a highly polished document that will be revisited in a year just to confirm how wrong everyone was.

The Real Benefit: Learning to Adapt

Dr. Gallaher’s take—that planning is about preparing for deviation rather than rigidly following an agenda—is probably the most useful way to think about strategic planning. The real benefit isn’t in the plan itself but in the discussions, debates, and critical thinking that happen during the process.

Strategic planning forces leadership teams to ask important questions:

  • What will we do if interest rates rise/fall/stay the same but somehow still ruin everything?

  • How do we attract younger members who think a credit union is either a dance club or a medieval trade guild?

  • What happens if our core banking system decides to take an unscheduled vacation?

  • How do we balance personalized member service with the fact that nobody wants to talk to a human anymore?

These conversations are where the real value lies. When (not if) the unexpected happens, a credit union that has engaged in rigorous planning is better equipped to pivot rather than panic.

Embracing the Chaos

So, if strategic planning is essentially about preparing to abandon the plan, does that mean we should stop doing it? Of course not. That would be like saying you shouldn’t wear a seatbelt because you might never get into an accident.

The process of strategic planning fosters collaboration, highlights blind spots, and builds a culture of adaptability. It helps leaders anticipate challenges, even if they can’t predict the exact form those challenges will take.

Credit unions that embrace this reality—those that treat their strategic plans as living, flexible frameworks rather than sacred texts—are the ones that thrive. The key is to plan with the understanding that deviations are not failures; they’re just part of the journey.

Planning as a Necessary Illusion

Eisenhower was right—plans may be useless, but planning is indispensable. And if strategic planning for credit unions has taught us anything, it’s that success lies not in rigid adherence to a document but in the ability to adapt, respond, and move forward even when the best-laid plans go sideways.

So, go ahead and create that beautiful, color-coded, data-backed strategic plan. Just don’t be surprised when reality turns it into a “Plan from which we deviate.” After all, that’s the plan all along.

Are We Family? Should We Be?

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There is a long history of credit union staff taking pride in being more than a financial institution and more like a family to colleagues and members. While this may feel right, it is an attitude that can challenge the productivity of organizations that have become extremely complex. It is often not effective to behave like a mom-and-pop shop anymore.

By Kevin Smith

This may not be a very popular post. But I hope you’ll hear me out and consider the perspective that I’m bringing. Too be absolutely clear, this is not a clear-cut issue with easy sides to be on. It is a complicated tight-rope walk for credit unions. Those who figure out how to navigate this balancing act my lock onto a great differentiator and market advantage.

During my recent travels, during a keynote session I was giving I asked about some of the concerns the board members were having. Someone spoke up from the crowd with a troubled look on his face. He said something to the effect of, “We’re always talking about how we’re ‘family.’ But I have a problem with that. We’re NOT a family. We are a business, and we need to act like it.” This took me off guard, precisely because in the credit union movement, particularly in smaller and midsized credit unions, we talk like this all the time. It was a minor stir in the room, with some chatter. Some looked thoughtful, some concerned, and some puzzled. The gentleman spoke up again to say sometimes acting like family is getting in the way of us getting things done, because we are not acting professionally enough in an industry that demands it in order to keep up, much less thrive.

He’s got a point. I don’t love it, but he does have a point.

Two (Or More) Sides

We credit union people love to be something other than bank-like and other than corporate. It’s a way for us to set ourselves apart and differentiate ourselves from cold, profit-driven businesses that don’t care about us as humans, who only want our dollars. There’s a lot to be said for this human approach to members and colleagues.

But there’s a difficult side to this approach as well. Often when we treat people like family rather than colleagues we don’t take the rational and pragmatic approach to getting things accomplished. We all know that we’d generally give family more chances at redemption than we would others. Blood is thicker than water, as the saying goes. And you can’t choose your family; you’re just stuck with them. (I know it’s more nuanced and complicated than this, but there’s a point here.)

With as much consolidation as there is and as many mergers as there are, we know that there are some that are not making it. It is a challenging and complex industry that does not look like it did ten years ago much less than its inception a hundred years ago. I’m not saying that this is all due to this family approach. But are we evolving as much as we need to?

Can We Balance This?

I have to tell you that I’m really uncomfortable with the direction this blog post is going. I don’t like it. No sir. Not one bit. The family aspects of this industry are a draw for me. At the same time, the change that I’ve seen over my 18 years here are jaw dropping.

Perhaps there are ways to walk this tightrope between family and business. Maybe you know how to do this or have examples of this done right. I’m eager to hear. Send them along. The right balance might just be the magic approach. And I’ll say very quickly – some of you think you’re doing this already. I’m not sure I agree.

Family Versus Humans

There’s a distinction necessary here: it’s two different approaches between treating people like family and treating people compassionately as humans, with some serious overlap. Simon Sinek and Gary Vaynerchuk (and others) are proponents of the empathetic human approach to business. It’s distinct from a family approach.

Kevin Isn’t Sharing Any Advice

Surly you’ve noticed that I’m not doling out any advice as to how to navigate this. (Yes. And don’t call me Shirly.) The truth is that I’m not sure how to handle this. It was a thoughtful, thought-provoking comment from a board member at a conference. Hurray for that. Kudos to him for bringing a challenging idea to the table. I certainly hope that happens as often as possible, because I see an awful lot of opportunity to collaborate on these difficult ideas.

Sometimes I’m thrown off. I’m sure I need to think about this one more. But it’s been weighing on my mind for a bit and needed to get it out there for you smart people to work on. Let’s face it: some families are dysfunctional.

What do you think?

What do you see?

If you think you’re doing this balancing act well, what makes you so sure?

I want to hear from you.

Playing the Dandelion Card, or Keeping Meetings Out of the Weeds

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Staying at the strategic level and avoiding operational micromanaging is a significant challenge for most boards. This can and should be addressed with systems to prevent it from happening and wasting valuable meeting time.

By Kevin Smith

Some of you have heard me talk about the E.L.M.O. card. If you haven’t, you can go here to catch up. But essentially the acronym is for: Enough. Let’s Move On. It’s a way to stop conversations that are repeating and no longer useful, that are simply taking up time. By playing a card with our furry red friend’s picture on it, you inject some humor into the process and (hopefully) not hurt anyone’s feelings. It keeps things moving.

I’ve been thinking about this and I think it’s time to add another card to our repertoire, and to our board packets: the dandelion card. You see where this is going, don’t you?

An Issue for Most 

A significant issue that many (most?, all?) boards face is the slippery slope where conversations migrate from the strategic and the big picture to the operational and into the “weeds.” I’ve been to my share of board meetings and I facilitate a lot of strategic planning sessions as well as board training sessions. And I’ve yet to attend one that didn’t drift into the weeds at some point. Some dramatically worse than others, but every one of them at some point or another. It takes a great deal of diplomacy and gentle directing to keep things on track. It’s not easy, because board members head that direction very quickly.

Board members and CEOs, and committee members, and staff members, and board liaisons all warn me about it ahead of time, and complain about it during breaks. And some groups are more self-aware of it than others, acknowledging that they have this tendency “on occasion.” I can respect that and work with it. It’s the groups that tell me that they never get into the weeds that I watch out for, because they are usually the worst offenders. They don’t recognize when they’re doing it.

Playing a Card

That’s where the Dandelion Card comes in. Much like the E.L.M.O. card, everyone on the board would get one laminated card with a picture of a dandelion on it to go in their board packet. When the conversation takes its slide into operations, a member can throw the card to call that out. And I’m going to make a controversial addition to this by saying that the CEO should have one (or six) to throw as well. Why is this controversial? Because many CEOs I work with tread lightly on this territory, never wanting to step on any director’s toes with this, even though they desperately want to. It takes a lot of trust in the room for the CEO to be able to do this.  

If there’s an issue, then the people involved need to do something to address it. Things don’t just go away on their own. Most that I deal with take this slide into the weeds as just something to grit their teeth and suffer through, taking it as inevitable and the cost of doing business with a weird group known as a “board of directors.” But it shouldn’t, and doesn’t have to be that way. I’m encouraging YOU to do something about it. Put systems in place to address the circumstances.

No Magical Solutions – But Progress

Now, a laminated card with a dandelion on it is not a magical solution that will make these conversations dissipate and go away. I’m not that naïve. But what it does is bring the topic to the table for discussion. It gives you permission to talk about this as something that can be or is a problem. You push for agreement about what the parameters are for strategic versus operational. Write this agreement down and use it for reference. This goes a long way towards improvement. And hopefully, using a silly card will bring some levity that makes it easier to deal with. I see too many people who are unwilling to say anything about topics like these for fear of hurting the feelings of their colleagues, which is very nice and noble, but not very helpful for the efficiency of the organization.

It also won’t go away overnight. It will take some time. But it moves you forward.

(BTW – I had to stick with the word “dandelion” here rather than weed. You can guess what happened when I did an image search for “weed.” ;-) )

Now, let’s do a poll to see how we rate on this topic!

[socialpoll id=”2878813″]

Aligning your Purpose

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Keep Purpose Constant

Remember the little guy!

Organizations driven by a clear purpose enjoy many benefits over those that don’t. Credit unions have this kind of purpose baked into our DNA but often it’s not clear enough, or it doesn’t reach everyone. Aligning towards the purpose of changing people’s lives through is a powerful engine that can move mountains.

By Kevin Smith

Last week I got to do one of my all-time favorite activities. A credit union invited me in to kick off their strategic planning process by talking about purpose. I love talking about this. Tim and I have been talking about organizational purpose for years in our own planning sessions. And we’ve seen dramatic changes when an organization embraces this approach.

It’s all too easy for credit unions to think about their “purpose” in very corporate terms. We take deposits, make loans and help people with their money. (*buzzer sound*) Thanks for playing but that’s not the correct answer (IMHO). A purpose-driven organization is one that has a mission beyond making a profit. It’s a beacon guiding people in all of their decisions and motivating their actions. A clear and worthwhile purpose inspires people giving meaning to their work and lives.

Shoes, Socks and Purpose

Now, this might be a bit harder if you’re selling shoes and socks, but look at Toms and Bombas. They figured it out. But we’re credit union people. This is baked into our DNA, in our history. Too often it gets lost in the day-to-day, in the bank-like nature of how we compete these days. It’s there though, bubbling underneath. It’s time to let it out to do its magic!

The “Good Old Days” and our DNA

Over the course of my years working with credit unions, I’ve had the pleasure of hearing hundreds of stories about the “good old days” of credit unions: children delivering deposits or loan payments to credit unions open on Saturdays at a kitchen table. Some run from converted broom closets on the factory floor. And these credit unions started because a group of people got together to help one another when they couldn’t get a loan elsewhere. This is our driving purpose: to change lives for the better. Doesn’t that sound better than “taking deposits and making loans”?

Benefits

Leading with purpose has many benefits.

  • Higher staff engagement
  • Lower turnover
  • Better recruiting
  • Higher organizational performance
  • Among others

And get this, research conducted during the pandemic indicated that those living their purpose at work reported:

  • Five times (5X!) higher levels of well-being
  • Being four times as likely to report higher engagement levels
  • 2 ½ times as likely to be free of dementia
  • 52% less likely to have experienced a stroke.

It has health benefits to boot!

Leading with a purpose that is higher than profit drives engagement. You have to pay people enough, for sure. But pay raises aren’t enough to drive engagement and give meaning to their lives. If you communicate how the credit union changes lives and connect people to how their roles move the needle towards changing more lives, they will be sparked to do more. It’s jet fuel.

This was all true before Covid but recent research (see links below) has shown that the pandemic has caused broad swaths of the working population to reconsider what they do and why. People are now more determined to have their work have positive impact and meaning. This is our “in” for getting the right people who share our passion.

Credit union leaders:

You have access to this. But are you doing enough with it? Creating this kind of culture is messy. There’s no straight line or timelines. It has to be constant and it starts with demonstrating what drives you and simple conversations. All. The. Time! There’s no room for lip service, for “do what I say, not what I do.” You have to walk the walk and people will follow you.

Mind The Gap

Make sure your purpose is clear everywhere!

Here’s your next caveat leaders: Don’t fool yourself into thinking that you’re already doing this enough. The McKinseyresearch says that 85% of leadership feel like they’re living their purpose at work. But only 15% of frontline employees say that’s true. Just because everyone around you says it doesn’t mean it’s happening everywhere. Mind the Gap. Close the gap. Communicate and follow through.

 

This is why many of us are in the credit union movement. But we need to make sure it’s true for every person in every corner of the organization. This is our true differentiator.Do Infinite Good

Here are all of my sources:

There are lots more too! I dare you to Google it. (Kevin)

Dedicated to YOUR Success . . .

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