Shared vs. Classical Leadership & Challenges in Governance

Shared vs. Classical Leadership & Challenges in Governance

Shared leadership is what credit union board members should practice but it’s rarely an idea that individuals coming into board service have a strong history with or understanding of. Intentionally opening up this as a discussion and reviewing expectations can be a tremendous asset towards effectiveness.

By Kevin Smith

Recently, as part of my regular nerdy reading, I came across this distinction between Shared and ClassicalLeadership as drawn out by Nemerowicz and Rosi, in Education for Leadership and Social Responsibility (1997). I came of age really only knowing the classical definition of leadership as they’re presented here.

Shared vs. Classical Leadership

Nemerowicz and Rosi, Education for Leadership and Social Responsibility (1997), London, U.K.: Falmer Press

It was in the context of Herbert Thompson’s dissertation, Governance as Stewardship (2015), that the significance of this distinction for credit union board members became more apparent to me. Thompson notes, “In many cases, new board members, come to their first nonprofit governance experience with only a classical leadership understanding and cursory practice with operational/administrative boards” (43). Thinking back over my years of working with boards, this idea (of shared leadership) has been floating under the surface, and been mostly presumed but unsaid. This is a concept that is important to note and should be called out, brought to the surface and addressed more matter-of-factly.

On the Rebound: Challenges in Hiring a CEO

On the Rebound: Challenges in Hiring a CEO

One of the most valuable and challenging actions a board can take is to hire a new CEO. Many credit union boards face replacing long-serving CEO who came up through the ranks from when the organization was much smaller. In this environment with a relative lack of experience the board may end up with a “rebound” CEO who isn’t a good fit and doesn’t last.

By Kevin Smith

There’s a scenario that I’ve come across a couple of times this year in credit unions, and I’ve heard of others. It seems to be a trend or at least a microtrend.

Here’s the scenario: A credit union has a long serving CEO, someone who often started at an entry level position and rose through the ranks to become the Chief Executive. After many years, or decades at the helm, the CEO retires. Nothing novel here (though the mere talk of it is enough to make some board members and board chairs start to sweat). And indeed, the board and the CU make not just average level efforts at succession, but really do take this seriously in order to make sure that they have the right fit in the next generation leader for their shop and for their members. They work hard at it, get industry research, sometimes hire a headhunter, make all the right phone calls and references, yadda yadda yadda. In other words – they do what they were supposed to do.

But here’s what happens: The new CEO lasts for roughly a year, give or take, and is gone. “What happened,” you ask? The response is often a range of stunned and unclear responses. “It just didn’t work out.” “It wasn’t a good fit.” “We thought we had a good cultural fit but it wasn’t.” Or even, “we don’t know what the heck happened, but it was a train wreck.”

I feel for these boards. I really do. Often, their good faith efforts really should have paid off with a good fit. But they didn’t. It all went sideways.

That New Car Smell and Invisible Customer Service

That New Car Smell and Invisible Customer Service

Not all customer service needs to be red carpet, or concierge service. Sometimes invisible customer service is the best and what the customer wants. Credit unions may need to consider whether their members need much more than this in general.

By Kevin Smith

That New Car Smell and Invisible Customer Service

Yes. This is my actual car. Pretty, isn’t it?

So, I just bought a new car recently, a 2020 Suburu Outback. And in case you think that this sounds a bit bragg-y, this car is a replacement for a 2006 Minivan with 165K miles, a rebuilt transmission, and in my favorite color (my favorite color = paid for). No, I’m not a new car every year kind of guy. For anyone that knows me this is a “no kidding” moment if there ever was one.

I’ve been reflecting on the experience of buying a new car and how much that’s changed over the years, even before the Minivan. And I’ve been comparing this with my experience working with credit unions as they try to engage with their members and compete with other providers.

Are Your Board Members and Your CEO too Chummy?

Are Your Board Members and Your CEO too Chummy?

Board members and the board chair can compromise their ability to hold the CEO accountable if their relationship is too close, or too friendly. Directors should reflect on that relationship and how to manage that tight rope walk, managing extremes. By Kevin Smith

Did you have a gut-level, visceral response to my title? I mean, beyond your mocking me for using the word “chummy”? Often when I ask this question, I can see the reaction in the eyes of the audience. There’s usually a couple of noticeable responses in the eyes:                 

     1. Hmmm…I never thought of that before. Let me think about that.
Never thought of that!

                            2. How dare you? That’s an insulting idea.
That's insulting!

                            3. Holy Toledo! That’s us!  
Oops! That's us.

Have You Researched the DNA of Your Board?

Have You Researched the DNA of Your Board?

Board turnover doesn’t always mean that the board evolves or changes. Slow replacement of directors can mean that the “old” culture of the group, get rooted and, well … stuck in the DNA of the board as a whole.

By Kevin Smith

Wait! … Before you @ me, I’m not talking about individual board members, or anything resembling violations of privacy, et cetera. Don’t go calling HR on me! I’m talking about the board in its corpus, as a whole, as it were.

Picture the scene:

Location: A credit union board room.

Facilitator (to the nine board members in the room): “Tell me how your board has evolved over the years. I see a lot of boards that are still focused down in the weeds of operations instead of at the strategic horizon. How’s your board?”

Board Chair: “Oh, well, we’ve evolved a lot and come a long way. We’ve got two new board members, and they’re young Millenials. As a matter of fact, we can say that our board has changed over completely from the original members in the last 20 years. With our merger of five years ago we also incorporated two board members from the merged credit union.”

Facilitator: “That sounds great. So, I see your board has a credit committee and a delinquency committee. Those seem a bit too operational to me. What’s the thinking on those? How do you keep those strategic?”

Board Chair: “I thought those were required. We’ve always had them. They help keep us informed of how things are going.”

The correct translation of that last phrase is, “Because that’s the way we’ve always done it.”

Ratio: Forward Looking to Backward Looking

Ratio: Forward Looking to Backward Looking

Too many credit union board members spend too much time looking at what happened last month, last quarter and last year. In the current environment of uncertainty and volatility, directors need to be able to spend as much time as possible on strategic thinking. Looking ahead to your “big picture goals.”

By Kevin Smith

Today we’re going to talk about a new ratio. Yeah, if it’s the credit union industry we do like to talk about our ratios, don’t we?! But this one might be a bit different than the financials that you’re used to seeing.

Let me ask you a question: How much time do you, as a board member, spend dealing with things that are strategic and future oriented? How much of your volunteer time are you using working on, or planning for the “beautiful future”? Dreaming of what your credit union could be and working towards that?

Forward/Backward Looking Time Spent

How much time are you spending looking at the strategic?

 

Monitoring Whether the Current Economic Uncertainty is Bringing Greater Risk to Your Loan Portfolio

Monitoring Whether the Current Economic Uncertainty is Bringing Greater Risk to Your Loan Portfolio

 By Tim Harrington

Economic uncertainty makes assessing risk in a credit union’s portfolio that much more difficult. Credit unions can take advantage of  existing reports to tease out signals and indicators to help determine what’s happening within their sphere.

Ask an economist if the U.S. economy is going to stay strong or slip into a recession and they will probably just give you a perplexed look. Why? The economic signals are terribly mixed. Traditional indicators of health or recession are occurring simultaneously, and no one knows where things are going from here.

But as a board and management team, there are a variety of internal reports that can give you an idea whether your credit union’s risks are increasing or decreasing. The traditional measures of credit risk, namely delinquency and charge-offs, will not tell you that your risks are changing. These are “lagging indicators.” These tell you of a problem in the past, not that a problem may be starting to happen. 

Balanced Scorecard and CEO Oversight

Balanced Scorecard and CEO Oversight

The Balanced Scorecard approach provides boards a range of variables to measure success. With a mixture of financials, strategic values of the organization and others, this provides more confidence in their assessments. When boards and CEOs collaborate to establish these measurements, it also helps clarify the plan for all involved.

By Kevin Smith

Board members: how comfortable are you in your role as evaluator of your CEO? More and more I’m hearing discomfort among directors about how they assess the performance of the CEO. And it’s no wonder, the more complex the industry gets, the more information the board has to digest, the more difficult it is to keep up with … well, … everything! Add to that the fact that very often, credit union board members don’t come from the financial services world in their professional backgrounds. Of course, none of this means that these are bad directors, or that they don’t offer a world of value to the strategic thinking of the credit union. But it DOES mean that directors these days need to make sure they’re using the right tools, and getting the right kind of information/education to keep them current to good work in an efficient amount of time.

Three Kinds of Lip Service That are Hurting Your Culture

Three Kinds of Lip Service That are Hurting Your Culture

By Kevin Smith

Three Kinds of Lip Service That Are Hurting Your Culture

Lip Service

Lip Service

Lip Service

 

 

 

 

 

 

 

 

You know about Lip Service, right? (hint: it’s not just a rockin’ song by Elvis Costello.) This is when you talk about something but your actions don’t back up what your lips are saying. It’s a terrible feature in organizational cultures and it can devastate trust and morale. I see it all the time. But not all lip service is created equally. I see three forms of it regularly and each has its own kind of negative effect on an organization.

Best Practices in Board Recruitment … Part (n+1)

Best Practices in Board Recruitment … Part (n+1)

By Tim Harrington and Kevin Smith

Board recruitment should be an ongoing process, a continuing cultivation. Everyone is super-busy, so making this as streamlined as possible for recruit-ers and recruit-ees is imperative. Building business card solutions and one-click information can do this.

As part of our roles for TEAM Resources we get the great privilege to spend time with credit union staff members, executives, CEOs and volunteers on a regular basis. Sometimes that’s part of individual consulting with organizations and sometimes while speaking to groups at trade events, conferences, schools, etc. And while we think we have some pretty great ideas about how to do things, we have to admit that we get a lot of great ideas and information from high performers who show up at these programs.