Our Structure 'Tis of Thee

I reject the notion that America's greatness comes from its people alone. Don't get me wrong, our nation can boast some of the finest human beings the world has ever seen. But I believe that every country has great people. Our people simply aren't, by themselves, a competitive advantage.

We are a country rich with natural resources: vast, fertile farmland, plentiful water sources, oil, natural gas, coal, etc. But other countries certainly have their fair share of mother nature's blessings. That's not it either.

I contend that it is the United States' Constitution, our structure, that makes us truly special. It's a system that rewards hard work, protects those who can't protect themselves, and gives our citizens a voice in how we are governed. It's a structure that encourages entrepreneurship, innovation, and self actualization. It's a government that, while far from perfect, has allowed America to be one of the most prosperous, generous, and socially responsible nations this world has ever seen.

Credit Union insiders often claim that it is our people that make us special. I halfway agree. I DO think we have great people - the best employees the financial services industry has to offer, and the best group of members on the planet. But it's our structure that attracts those employees. It's the sincere belief that we are making a difference in people's lives that drives our workforce's passion. Trust me, most of us could make a lot more money in other fields. But we love what we do. We have our structure to thank for that.

It's our structure that attracts members by the millions. Our member owners like knowing they have a say in how their financial institution is run. They like knowing that our business purpose is not to take advantage of unwilling customers with high fees and unfavorable rates. Rather, credit unions' mission is simply to help members become better savers, wiser consumers, and more comfortable borrowers. We serve our communities with financial literacy education, outreach programs, and cooperative missions because our member owners demand it - not because of any associated tax implications.

See, to me it is our structure that makes credit unions special. Thankfully, it's a structure that attracts the best resources, the best people, and a better alternative to traditional banking.

Describing the Financial Crisis

I'm a curious critter. "Why?" is my favorite question, which will come as no surprise to anyone who knows me. You see, I have an insatiable desire to understand not only the gravity of each situation, but how we got there. What were the causes? Who was involved? What were the motives? What were the causes of the causes?

That makes the current international financial situation both extremely interesting, and annoyingly baffling. The causes are many. The solutions are blurry. The public understanding of these complexities is dubious.

Thankfully, though, organizations have grasped the general failure of news organizations to fully (and truthfully) help consumers understand, and come up with their own solutions. My Alma Mater, The College of William & Mary, hosted a town-hall type meeting to do just that on Wednesday (see it here). I enjoyed the honest, unbiased discussion, but the main thing I took from this session was comfort that, while things are bad, the doom and gloom that many chicken littles are exclaiming are overblown at best.

That same day, I launched the "Ask Jack" blog at my credit union. This site allows members to ask our president direct questions about what they see, read, or hear in the news. My feeling was that if people are seeking honest answers to their pressing questions, who better to answer than the CEO of a not-for-profit financial cooperative who has always exhibited conservative, member-first business practices?

This morning, I got to hear John Allison (BB&T's CEO) give his take on the current financial crisis at a breakfast forum hosted by the Winston-Salem Chamber of Commerce (they plan on making video of this session available online). This was another re-assuring look at our current situation. Though he admits things are certainly rough right now, Allison asserted that failed banks should have failed - that it was actually a good thing long-term.

He also suggested the best plan (policy wise) I've heard thus far to deal with the mess: a 10% housing purchase tax credit. This would only be good for existing homes (used?). Essentially, he made the argument that house prices are still about 10% too high. To help battle off the sudden deflation of home values, this plan would allow purchasers to get houses at a "discount," while preventing sellers from suffering any further (well, at least that 10%). In essence, his plan would allow the housing market to lick its wounds and get back to its feet. Still a lot of money, but a far cry from $700 billion.

Allison did, however, just like the William & Mary professors from earlier in the week, caution against knee-jerk policy reactions. You see, the solutions will not be political. The solution will come in the form of Americans starting to save more and spend less. The solution will come in the form of American ingenuity. The solution will come in the form of returning to consumers, investers, and businesses alike a sense of responsibility for their actions. The solution will come in the form of credit unions taking a bigger share of the personal finance market.

Next week, I am offering the first of three presentations for our credit union's SEGs about the financial news of our time. I'm confident that, though I will not be able to replace lost wealth in their 401(K)'s, lower home value, or lost trust they have in many for profit financial institutions, I can continue to cement in their minds that credit unions are safe, sound, and determined to be part of the solution.

CU Dream Teams

Say Bill Gates, Warren Buffett, or some other filthy rich dude decided to create a credit union as their next charitable project. Their approach would be simple: collect the best talent the industry has to offer, and back them with all the capital necessary for that “dream team” to establish the perfect credit union.

Would it work?

Let’s look at the New York Yankees for clues. Their approach for as long as I can remember has been to buy as much talent every off-season so they have All-Stars at every position, and an ace throwing every pitch. In the mid- to late-nineties this worked like a charm. Every year, it seemed Joe Torre, Derrick Jeter, and Mariano Rivera were being joined by an amazing cast of talented (and highly-paid) free agents. And every year, it seemed the New York Yankees were winning 100 games and going to the World Series.

Fast forward to the last 5-6 years. The Yankees’ strategy is still the same. They keep building the best team money can buy. Names like Mussina, Clemens, Giambi, and A-Rod have all come aboard, but the winning ways have for the most part gone away.

No help there.


Let’s look at Hollywood, then. Have you ever seen a “dream team” cast work? I have. But for every Oceans 11, The Godfather, or Casino, there’s an Insomnia, Get Shorty, Wild Hogs, The Royal Tenenbaums, or Batman & Robin.

No help there, either.

How about music? The Traveling Wilburys and The Highwaymen were good, but didn't enjoy lasting success. They certainly didn't prove that the whole was greater than the sum of their parts, anyway. Each of the artists in those collaborations were much more successful individually. Bands like New Edition and Temple of the Dog further proved that sometimes star performers are better separate from each other.

So what gives?

To me, it all boils down to grouping the right superstars with the right roles with the right mission. Just throwing a lot of money and a lot of talent at a problem doesn't guarantee success. I don't think you can just cast a net, gather a ton of talent and expect to be successful. You need to make sure that they are all working toward the same goal, don't have excessive overlaps in specific talents, and are placed in the appropriate chairs with which they can make the biggest difference.

Here's the deal. The talent you should be looking for wants to be around other talent. They want to be a big part of something big. They want to know that their passion to manifest the highest levels of effort, imagination, and teamwork are matched only by their co-workers' energy in the same regards. They want to be compensated for their efforts, don't get me wrong, but they don't want to be unjustly rewarded. These people truly want to earn their paychecks - and want to continuously improve upon their standards of living through well-deserved pay increases.

The Tampa Bay Devil Rays are proving as we speak that chemistry goes a long way. One player on the Yankees (A-Rod) makes more money than the entire Devil Rays squad. They succeed by minimizing egos, and maximizing performance. And I will bet my bottom dollar that they will reward their players to the best of their ability (however limited). Can your CU do the same thing? Can your CU build an effective Dream Team? An All-Star at every position, working toward a common goal, excited to be a part of something special. That's my dream...and it should be your CU's dream, too.

Partnership Symposium Takeaways

After a few days and finally a few hours of sleep with which to collect my thoughts, let me share a few of my takeaways from the Partnership Symposium hosted by Forum Solutions/Trabian at Forum Credit Union, October 1-2, 2008. This was a truly amazing conference, and I would encourage any of you that get a chance to attend next year. At a minimum, check out the sessions recorded by Brent Dixon here.

1. Be Careful Who You Vote For. I was lucky enough to be voted in as a guest speaker for this conference. I'll be the first to admit that as speakers go, I'm not particularly good. Heck, in the first 5 minutes of my session I thought I was going to pass out from nervousness. I've felt very guilty about my lack of polish since the second I walked on stage. Not that I didn't think I had a compelling story to tell - it's just that I could have told it a lot better. Hopefully, I at least encouraged attendees to reexamine the concept of promoting thrift, and how the services they offer help define what they stand for. Simple passion does not make for a good presentation, but I hope it helped.

2. Technology isn't redefining credit unions - it's allowing us to better implement our founding principles. Matt Dean, William Azaroff, Gene Blishen, and Morriss Partee all discussed how technology can help credit unions build tighter community with members, collaborate with other credit unions, and promote thrift. What was striking to me was the fact that even though their solutions were high tech, they were deeply rooted in traditional credit union philosophy.

3. Forum CU gets it. This is something that became quite clear to me after the Partnership Symposium last year - Forum Credit Union is as classy as classy gets. From the types of attendees and speakers they attracted, to the friendliness and professionalism of their staff, to their unique hosting style, it's immediately apparent that this is a credit union that is progressive, in-tune, and focused on innovation.

4. Ron Shevlin gets it. What made this year's Partnership Symposium for me was the implementation of Ron Shevlin as moderator. Ron's obvious goal was to keep speakers honest about how they presented their information, how/if their stories were relevant to attendees, and whether or not they substantiated their claims. This was no doubt a great experience for speakers and attendees, as it enhanced our presentations, better defined conference takeaways, and (for anyone like me who welcomes constructive criticism) educated us on how to improve our messages. He was seemingly harsh at times, but never irresponsibly. Those who disliked his methods are missing the educational opportunity he provided. Those who listened to his critiques, and tried to understand the reasons behind his lines of questioning, will become better listeners and better speakers.

5. Every credit union needs an Andy Janning. Employee training is an extremely difficult (and often thankless) job - especially in an industry with such frequent changes as credit unions. Forum CU's AVP of Training and Quality Service, Andy Janning, has the perfect perspective on the irreplaceable role a top-notch training program can have on your organization's performance. "Knowledge isn't power, performance is," Janning quipped. You see, he knows that the only measurable in his performance is his trainees' performance. He's not passionate for recognition, he's passionate for people - and his success is evident with every Forum employee you meet.

6. Web 2.0 is cool, but it sucks compared to live discussion. It's strange how much adoration I had for blog/Twitter friends I have never met. It's even stranger when you actually meet those people and they're better than advertised. My virtual buddies, and you know who you are, are true inspirations for me.

7. The right people are unified. I have been distressed over the past few years about an apparent shift from inter-cooperative credit unions to inter-competitive adversaries. I have always thought that we are better off working as a team against banks, than against one another. Some people don't get that...but the attendees at this conference did. This wasn't a place for competition or one-upsmanship, this was a place to learn from one another to improve the services we offer to members. Simple as that. What a refreshing change! Now let's hope it spreads.

8. I've never been more excited about the future of the credit union movement.