Nine Leadership Challenges

At Quantum Governance, we’ve been taking a look at what the credit union board of the future will look like and, almost more importantly, the challenges it will face. Ultimately, we have identified nine key challenges that are already (or will be) confronting your leadership.

1.       The Composition Challenge. Gone are the days when your credit union can simply rely on a nice cross section of its membership to fill open slots on its board. The most progressive boards today are actively recruiting the talent they need; identifying the skill sets that deliver the talent, connections and expertise they need on the board; and then inviting those individuals to become members of the credit union.

2.       The Technology Challenge.  The rate of technology is changing at lightening speed. I don’t have to tell you that. But here’s the thing. It’s changing at a faster rate than anything else we’ve ever seen. Faster than political change, business change and even social change in our world. Is your board ready? Is the credit union?

3.       The Community Challenge. The very notion of community is being altered by technology. Community is ceasing to be largely defined by geography and more often it’s defined as a sense of belonging. How does that impact your “community” credit union? Indeed, as a credit union member myself, I haven’t set foot in a local branch for more than a decade. What does that mean for your business? Is your board discussing the impact of this from a strategic point of view?

4.       The Disruptors. How many of you have heard of Uber? Five years ago, could you have ever conceived of an online reservation ride service? I’m sure the taxi companies in nearly 130 American cities never dreamed their business could tumble by more than 65 percent in just one year, like it did in San Francisco. Uber wasn’t even on the radar then. What’s not on your radar now? It’s difficult to know. And that’s the point. You won’t know. More than 99 percent of the disruptors will fail, but it will only take one to succeed and have a dramatic impact on your credit union’s business.

5.       The Demographics Challenge. We love Baby Boomers. First, there are lots of them. Eighty million of them, and they are doers. Board service has been a part of their DNA. But what about the next generation:  Generation X? Much has been said about them and most of it hasn’t been good. I happen to think they are doers, too. And very civic-minded, but in a different way. Their way of giving back is more individualistic. When they want to get involved, it’s more on a one-on-one basis. When they want to make a difference, they start their own organizations … forge their own path. And critically, there are 40 million fewer people in Generation X than there are Baby Boomers. If you think you’re having a tough time finding good, qualified and engaged board members now, it’s about to get harder.

6.       The Information Challenge. With your iPad and your smartphone, you probably have more information at your fingertips than the entire federal government did 25 years ago. But what matters? What’s important? What information will move your credit union forward? What do you need to know and what is just white noise? One of the key challenges for credit unions is not a lack of information, but rather the volume and variety of data available. The current flood of information can be like trying to satisfy your thirst with a hose attached to a fire hydrant!

7.       The Complexity Challenge. This challenge is related to The Information Challenge and every credit union will face it. It’s a distinct moment in time – that moment when the abilities of a credit union board are overcome by the increasing quantity and complexity of credit union regulations, responsibilities and requirements. There is more and more expected of you and your colleagues as directors. The demand for your knowledge base is only continuing to grow.

8.       The Risk Challenge. There’s a great book titled Competing for the Future, in which the authors say organizations that “create the future are rebels. They’re subversives. They break the rules…Foresight often comes not from being a better forecaster, but from being less hide-bound.” It comes from breaking free from your mold, from taking more risks.

Is your credit union board “hide-bound?” Are you stuck?  My guess is that you and your board colleagues spend more time on the lower end of the risk spectrum – most credit union boards do. But, if you’re going to grow … if you’re going to forge the future, maybe even be a credit union disruptor yourself, you’ll need to learn how to effectively balance two abilities: 1) understanding, identifying and mitigating risks to the credit union; and 2) tolerating the risk that will enable you to grow.

9.       The Impact Challenge.  It’s not enough to keep your head down and do good work. You have to not only keep your head up, but you have to get out. The Impact Challenge requires that you foster relationships, as leaders and always in constructive partnership with your CEO, with external stakeholders to have the greatest impact. And that goes far beyond your membership to include governmental representatives, local businesses and, yes, even other credit unions.

To face these nine challenges successfully, your board will need to regularly strengthen its leadership and governance abilities. You can do it!

Michael Daigneault, CCD, is CEO of Quantum Governance L3C, Vienna, Va., CUES’ strategic provider for governance services. Daigneault has more than 30 years of experience in the field of governance, management, strategy, planning and facilitation, and served as an Executive in Residence at CUES Governance Leadership Institute. Quantum Governance fields more engagements in the credit union community than in any other, more than 30 percent of its total client projects.

Credit Union Management magazine’s Web-only “Good Governance” column runs the first Wednesday of the month.