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Modernizing the Role of the CEO
Thursday, November 3, 2016 6:30 AM

At Cornerstone’s Top 50 meeting this week, executives discussed the new realities of leadership in today's credit unions and the need for a 21st century model job description that addresses those realities. The group looked at the challenges: change and technology, personality limitations, delegation, leadership development, and measuring the impact of activities.

How Has the CEO's Job Changed?
The group entered a candid discussion about the challenges and determined that campaigns and programs won't solve the problems they encounter. They said changes would come by first changing their perspectives and examining how CEOs can bring value to the cooperative. That includes sometimes letting go of the things they're good at, spreadsheets, examining ROI, etc., and exploring some things they may not be good at, like public speaking, by pushing out of their comfort zones not only professionally, but on a personal level.

When examining how the CEO role has changed over time, the group consensus was that it had changed significantly due to the greater emphasis and importance of community engagement. Staffing was another big issue, and some said that for small credit unions, having one exceptional leader may be the best strategy.

One CEO said poignantly that the leadership role hasn’t changed; technology, expectations, and the world have changed, which forces how a CEO approaches the job. "You have to be involved in the community," he said. "The consuming public is losing faith in their institutions because they want to see the businesses they do business with do the right thing. They want to see competency and efficiency in operations and for businesses to help solve problems in the community."

Personality and Management Style
Though credit unions are becoming, by default, the financial institution people most trust, credit union leaders generally tend to be uncomfortable engaging with the community, speaking in public, telling their stories, etc. Many are introverts and have a harder time engaging outside of the credit union.

"It's hard to model getting externally involved with the community when you're a task-oriented CEO," one CEO said. Those activities demand a leader's presence inside the credit union to get the job done.

"It's important that your community knows what you stand for, what your philosophy is, and what you’re doing in the community," another CEO said. And then there's technology. "If you don’t have a basic understanding of what’s going on with technology and you can’t talk about it with staff and volunteers, you’re falling behind."

Another CEO cited his DNA as an introvert. But when he saw the need to be outward-facing, he decided to pursue that, despite not having the natural inclination to be extroverted.

One CEO said he could speak with credit union people all day, but he couldn't say hello to his neighbors. When he could no longer ignore it, he made the decision to change and to deal with the discomfort. It's gotten easier as he's pushed himself, he noted. "Everyone can make that change and adjust," he said. "You just have to make the decision to do it."

"It’s about self-knowledge," another CEO agreed. "You can change incrementally, taking a series of steps over time, and change to address your business needs."

On Delegation and Developing Leadership Teams
The challenge of being a good delegator derives from being historically good at the jobs that need doing. Executives weren't always executives. They worked their way up the ladder and had to learn to delegate the higher they climbed. But delegating is harder than it might seem. But for credit union CEOs who need to get out of the office to be more outward-facing with the community, it's a learning experience that needs practice.

"Delegation is really hard," said one CEO. "It’s probably harder at a small credit union than a larger credit union. Letting go is easier, but staying 'let go' is hard. It’s not just what we can do in the community, but also what we can do in the system to support the needs of all credit unions, big and small.”

When he's out of the office, this CEO said his absence creates space for managers to be successful at what they need and want to do. 

"It’s my natural personality to defer to others," said one CEO who noted that most management groups like being told what to do. "During the financial crisis, I was a very directive CEO. Coming back out of that was difficult."

He cited his experience that credit union and community members like being able to identify the names and faces of those who represent the values the organization espouses, so the need for CEOs to be outward facing is important.

His credit union has a senior leadership roundtable every Friday that he attends only by invitation. He says you have to know what’s going on with your teams, and most of his time is on development plans for them. "I tend to compartmentalize the groups," he said. "You have to give up some of the stuff you love to empower others and free up yourself. Don’t try to control the outcome; try to support the individual."

"If the decision is above the water line, let someone else make that decision," said another CEO. "If the decision is below the water line, that’s your responsibility. You don’t have to have all the answers; your executive team can be there to support you. Most of what’s going on is well above the water line and opens up the CEO's capacity to do other things. We need to give executive teams the opportunity to rise up."

Judging by Doing: Getting Results
Evaluating the impact of a CEO's outward-facing activities isn't easy. Results are revealed over time. Brand awareness may be growing, as well as membership, and these are all signals of achievement, but specific metrics on impact to the bottom line are imprecise. When you begin receiving anecdotal evidence of impact, you know you’re on the right path.

"You can measure transactions, reach, and social media response generated around events, but in the end, it’s very difficult to connect the dots to growth and brand awareness," said one CEO.

The CEOs discussed developing downline leadership. "It’s important that those leaders belong to and function as a team," another CEO said. CEOs need to help their teams develop leadership competencies, and that includes establishing individual development plans based on their profile and the context of the team. An executive coaching and mentoring program can be very effective when the coach/mentor is someone who is senior but not the individual's direct manager.

The group discussed evolving the management team to make leadership development possible so you don't lose key executives. The result of this evolution of leadership enables CEOs to get out and do the outward-facing community things that make a slow-building but vital impact on the credit union.

"Whoever is richest in influence and community engagement is what we need," said one CEO. "We don’t necessarily need someone with the financial services experience, per se."