The U.S. Yield Curve & Things Coming Soon

Tim Harrington

In a slight departure from our typical blog style, I’d like to comment, if briefly about the news that I’m keeping up with. Part of what we do at TEAM Resources is try to help our clients, and our followers keep an eye on what’s going on that might impact the financial services industry. Lately, the trusted news resources that I follow have been noting some economic trends that I think are worth paying attention to and sharing. For example, here’s a recent headline from David Ader at Bloomberg:
 
The U.S. Yield Curve Is Sending the Right Signals
The economy is exhibiting classic late-cycle behavior, and a recession may not be too far off.
Click below for the full story. 
 
With this information we encourage you to consider how this impacts your organization particularly as we head into the “typical” strategic planning season. 

 

Coming Soon

Beyond the U.S. yield curve, I want to also point you towards something that Kevin Smith has in the works: The Board Governance Video Series. This is coming soon to the TEAM Resources website. This will be a valuable, ongoing resource for credit union boards and executives. Check out the preview below or  here.

 

Dealing with the Weakest Link

Dealing with the Weakest Link 
Do you have a “weakest link”? Then stop behaving like a chain. Be a Net.

Teams often use the “weakest link” and team-as-a-chain metaphor. This becomes a way to deflect blame and avoid accountability. Stop this mindset and behavior and create shared accountability to improve the dynamic and the performance. Don’t act like a chain. Try being a net.

by Kevin Smith

Are you the weakest link? Can you easily single out the weakest link on your team? This metaphor of team-as-a-chain has become so common and recognizable that they named a verkakte* television show from it for a while. We all know this trite phrase. 
(*Yiddish word which sort of means very bad.)

You’re only as strong as your weakest link, right? I get it. It sort of makes sense. You can easily picture this and how it works. It’s visual. It’s tactile.

Right and Wrong Times to Deal with Governance Issues

Right and Wrong Times to Deal with Governance Issues

Boards of directors often end up taking time to deal with their governance issues, and learning, in the wrong places at the wrong times. Boards have a limited amount of time to do their work and if it’s not efficient and on track, they will end up taking up time meant for other activities, such as a strategic planning meeting, to try to address their governance issues. This is distracting and a poor use of time for those taking part and to the goals of the session.

Tim Harrington and Kevin Smith

We regularly use the metaphor of walking a tightrope for talking about what it means to work at the most efficient levels of strategic governance. Go too far in one direction and the board is too strong, taking over operations or micromanaging. Too far in the other direction is too weak, not keeping up with issues, and rubber stamping without proper oversight. Here’s the thing about tightrope walking – you have to tweak and adjust at every moment along the way. Good strategic governance is the same way, constant adjustment.

Board Members: Stop Trying to “Help” Your CEOs

Staying at the strategic level can be difficult for credit union board members. When their “day job” involves getting things done at a tactical level, seeing tactical results is how they know they’re effective and it’s what their evaluated on. The natural impulse is to try to “help” their credit union’s CEO. This often causes conflict and unclear roles.

by Kevin Smith

I know. I know. The headline sounds ridiculous but I’m not going to back down. You’re thinking I’ve lost my marbles or at least my focus with that statement. Why wouldn’t you try tohelp your CEO? Why would you try to make things harder and worse for the credit union and thus the members? Bear with me as I try to explain. I think I have a valid point to make.

Often creditunion board members have or had careers that involve getting “stuff” done, checking off projects, tasks, etc., that are by their very natures more operational, in the nitty gritty of the business they’re in. This is a pretty wide generalization here to be sure, and board members that I’ve met across the country come from a wide set of backgrounds. Sure, they may have some involvement or input on the strategic plan of their department or their organization, but it’s typically not where they spend the bulk of their time.

Review of Daniel Pink’s new book, When: The Scientific Secrets of Perfect Timing

Review of Daniel Pink’s new book, When: The Scientific Secrets of Perfect Timing
by Kevin Smith

After hearing Daniel Pink as a guest on a podcast recently, I bought his new book When. Now, I’m not a rush-out-and-buy-a-new-book kind of guy. I’m a cheapskate from way back and I’m comfortable on the library waiting list for a while. There’s always plenty on my table to read. But the way Pink talked about this material struck a chord with me. The subtitle of the book is: The Scientific Secrets of Perfect Timing. As a consultant who works at home alone, I’m more than happy to tell you that I am fully in charge of my own schedule and I attend very few meetings. It works for me, but it’s not for everyone. One of my challenges is how to orient my day in order to be most effective. Busy isn’t the issue. Effective is the issue. The stories that Pink began describing about what he found sounded incredibly helpful. I think it will be, but it’s too early to tell.

Pink digs into the research of timing in a variety of interesting ways:

  • “The Hidden Pattern of Everyday Life.” The best time of day to tackle certain tasks. (The answer of course is “it depends” but it’s not the copout that it sounds like. It’s simply a more nuanced answer.)
  • “The Power of Breaks.”
  • The influence of “Beginnings, Endings and In Between”, for days, events, meetings, lives etc.
  • “Synching and Thinking.” How to synch groups and get your ideal “when” together.
  • And more.

Are You Doing Enough to Onboard Your Directors and Committee Members?

The Spotting of an Extremely Rare Event: A Full-Day Onboarding Event
by Kevin Smith

I recently had the privilege to be part of something I’ve found pretty rare in my time working with credit union boards and supervisory committees: A full-day onboarding event. And … it made no pretense about being comprehensive. The fresh meat … er … I mean, the rookie members got the clear message that the full day of onboarding and training was not meant to cover everything, and they were enthusiastic about this fact and theyunderstood. This event had little to do with where the coffee is kept, how to access email and set up the new iPad. It had nothing to do with the schedule for the year, or where the strategic planning session will be held this year. The agenda called for a thorough review of duties and responsibilities, for best practices in communications between the supervisory committee and the board, for governance best practices. Deep stuff!

This all begs the questions:

  • Why is this rare? (And if you want to argue with me about the fact that it’s rare, bring it on.)
  • Are you doing enough as a board, as a committee to make sure you’re all up to speed and, more importantly, on the same page, and functioning as an actual team.

Does your CEO Feel Safe Enough to Admit Failures?

Does your CEO Feel Safe Enough to Admit Failures?
(Psychological Safety and the Board/CEO as Team)
By Tim Harrington & Kevin Smith

It sounds kinda weird to say that we hope the CEO of your credit union fails. But in a way, it’s true. (We’ll qualify this. I swear.) More importantly for credit union board members: Does your CEO feel confident and safe enough to readily share any failures with you?  A few weeks ago we wrote about Google’s research into what makes teams perform at the highest level. The number one indicator: psychological safety, the ability to be vulnerable and know that this would not be used against you by the other team members. Does your board and CEO operate at this level? You are a team after all.

Here are two scenarios that we see as radically different:

1. The board asks the CEO to report on the progress of strategic project X. The CEO responds saying it will take some time to gather data to adequately address that project. He/She requests that this be an agenda item for next month’s board meeting. At reporting time there are a flurry of statistics, qualifications, points of context and a lot of use of the passive voice (i.e. “assumptions were made,” “benchmarks were missed,” “due diligence was done”).
2. The CEO calls the board chair and says, “I need to give you an update on strategic project X. We missed the benchmarks and a few things have gone wrong. I don’t want you to have any surprises. I will update the rest of the board more thoroughly at the next board meeting. In the meantime, can you give them a heads up and send them my way if they have any questions?”

Both of these are reports on a failure. The tone of the two are polar opposite. In scenario 1, the CEO comes off as defensive, covering tracks, diverting blame, delaying accountability, etc. In scenario 2, the CEO is proactively addressing the issue, before being asked, in plain language and leaving the door open for further information which is a higher level of transparency. Which one of these two CEOs has the trust of the board, and vice versa?

The Board and Supervisory Committee Dynamic

Creating A Good Board/Supervisory Committee Dynamic
By Tim Harrington & Kevin Smith

What does it mean to have a healthy relationship or dynamic between the board and the supervisory committee? We suppose that’s probably as unique as your organization and as individual as your members. That means that there’s no one “right” answer to this.

Kevin and I were recently facilitating a two-day governance workshop and this issue came up. We didn’t end up with a great deal of time to talk it through (as we had a litany of items to talk about), but it did get us to thinking about this as an issue.

Google Research & the Quality Most Important to Team Success

By Tim Harrington & Kevin Smith

So … Google thinks it know what the most important qualities are for team success. Well, of course they do. They’re Google. Don’t they know everything these days? Or at least they know how to find it.

Most of the work done at Google is done in teams. That’s also true for many of us. And of course, it’s hugely important to know how to make sure that teams are as effective as possible. There are entire industries built around figuring this out. Google set out to find the answers (Here’s the original article). Here’s some of what they found.

The most important trait for team success … (drumroll, please) – psychological safety for the team members. The comfort and trust in the team setting to weigh in, to brainstorm without fear, to point out potential problems to superiors without fear of retribution, and ability to act in the best interest of the goal, rather than navigating the personalities (or office politics) of the team.

Here’s how they put it:
Psychological safety: refers to an individual’s perception of the consequences of taking an interpersonal risk or a belief that a team is safe for risk taking in the face of being seen as ignorant, incompetent, negative, or disruptive. In a team with high psychological safety, teammates feel safe to take risks around their team members. They feel confident that no one on the team will embarrass or punish anyone else for admitting a mistake, asking a question, or offering a new idea.

But before we go further, just what do they mean by “effective”? That can be a loaded idea, where everyone thinks they understand it, but all of the definitions are different. The researchers measured team effectiveness in four different ways:

  1. Executive evaluation of the team
  2. Team leader evaluation of the team
  3. Team member evaluation of the team
  4. Sales performance against quarterly quota

The Five Most Important Qualities for Team Effectiveness:

Psychological Safety – Team members feel safe to take risks and be vulnerable in front of each other.
Dependability – Team members get things done on time and meet Google’s high bar for excellence.
Structure & Clarity – Team members have clear roles, plans, and goals.
Meaning – Work is personally important to team members.
Impact – Team members think their work matters and creates change.

The researchers also discovered which variables were not significantly connected with team effectiveness at Google:

  • Colocation of teammates (sitting together in the same office)
  • Consensus-driven decision making
  • Extroversion of team members
  • Individual performance of team members
  • Workload size
    (Also very interesting, wouldn’t you agree? Some long held assumptions shot right down here. More on that at a later date.)

The most important qualities reported here line up to us in a nice way with Lencioni’s Five Dysfunctions of a Team, which we’ve found enormously helpful in our work, particularly in the areas of trust and accountability. At the same time, it seems like it’s opening a whole new can of challenging worms.

This idea of psychological safety could be a game-changer for so many organizations. We’ve seen an awful lot of folks who give plenty of lip service to this idea, but who don’t actually follow through on it in a meaningful way for one reason or another. Perhaps because one or more senior people don’t really buy it, or because people didn’t really treat it as that TOP MOST IMPORTANT element that makes a team effective, as Google has found. Many treat it as a nice to have, not a MUST have, or top priority as this research suggests.

In light of this research, will you do a hard look in the mirror to find out if your teams create true psychological safety in order to have a higher level of success and effectiveness? Are you willing to invest in this kind of culture at your organization in order to make this happen? Because that’s what it will take – investment. We’re not talking about cash, but time, energy, and authenticity to create this kind of safe environment. Too often, we see cultures that are defensive and a high level of CYA (i.e. the opposite of psychological safety). A good culture of trust doesn’t just happen overnight; it is fostered and nurtured continuously when senior leadership values it. And now the Google research has reinforced what that can yield. Will this be the year that you make an impact on your culture? I mean … we generally trust Google to have the answers, don’t we?

Credit Union Strategic Governance Basics by TEAM Resources

Hey Credit Union Friends!

We are thrilled to announce the newest publication from TEAM Resources: A Credit Union Guide to Strategic Governance, by Tim Harrington and Kevin Smith. This book has been long in the works, developed around the strategic governance philosophy that Tim and Kevin have been presenting to audiences over the years and now coming in book form. We anticipate the book to be available in December of this year. (It’s at the designers!)

You can preorder the book now and save $. Click here to order! 

In the meantime, to promote the TEAM Resources Strategic Governance approach, TEAM Resources is offering a free webinar on Monday, December 11 (1:00 PM – 1:45 PM CST).

In this webinar Kevin Smith will provide an overview of the TEAM Resources Strategic Governance approach as developed by Tim Harrington, CPA and Kevin Smith. You will get an overview of the evolution of governance issues for credit unions, hear the basic steps of Strategic Governance (i.e. what to do, and what to stop doing), learn how to maintain proper oversight, and develop an approach to maintaining a strategic approach via policy.

To register for this webinar, click here.

And please share this will all of your credit union friends!

Thanks, 
Tim and Kevin