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In his well-known book The E-Myth Revisited, Michael Gerber shares this example: Small business owner Sarah is spending too much time working “in” her business, and not enough time “on” it. Her coach directs her to spend more time as the strategist, entrepreneur and systems designer rather than as worker bee.
The aim, of course, is to strike a balance in working in/on your business. In the credit union world, some CEOs constantly work “in” the business with little, if any, strategic inclination. In this article, though, I’ll focus on the pitfalls that may arise for credit unions with chief executives at the other end of the spectrum—those who work “on” or even “above” their business to the point that they miss important components of the operation. Some CEOs either spend significant time away from their credit unions or have created so many organizational layers beneath them that they are unaware of crucial operational details.
In short, what CEOs don’t know can hurt their organizations. Let’s consider four examples of what can go awry when chief executives don’t spend enough time in the business.
The Info Tech Smokescreen
Several years ago, a bank decided to build a data warehouse to make its customer data more accessible and useful for employees. This multi-million-dollar decision originated at the executive committee level. Unfortunately, the project languished for several years and became one of those all-too-common examples of a failed data warehouse initiative. It failed because the CEO did not hold his direct report, the CIO, accountable. Both executives shared the blame for this failure, the CIO for “blowing smoke” about the project and the CEO for not providing adequate executive direction and oversight. Though the initiative was recognized as having enormous strategic potential, it died because the CEO did not demand key metrics, deadlines and accountabilities from the CIO.
The “We Know Our Members and Markets Well Enough” Excuse
A significant lapse in leadership I see among CEOs is a failure to recognize the value of using analytics as a tool to create deeper understanding of members and the differentiated value different member categories return to the organization. Periodically, I’ll hear a CEO say, “Oh, we tried analytics, and it didn’t work.” Far more common is sheer inertia, which is hard to fathom when you consider the millions of dollars that corporations like Walmart have made using analytics to better understand and serve the needs of their customer bases.
Recently, On Approach, a Minneapolis-based CUSO, hosted its AXFI conference for credit unions seeking analytics solutions. The fact that attendees came from all over the country attests to the fact that credit unions are increasingly embracing big data as a key business tool.
The Disillusionment Drain
According to Gallup Research, about 65 percent of American executives are unhappy with their work. That means chances are better than even that some highly positioned people within your ranks are disillusioned and, as a result, may be holding your credit union back. These executives may feel that they’ve reached a dead-end. Their jobs have become routine and boring. New challenges and exciting opportunities are infrequent.
The good news is that disillusioned executives can be re-engaged by CEOs who are committed to help them tailor professional development plans and take on stimulating initiatives like leading a new division or overseeing a new product line.
CEO Blind Spots
I frequently give a presentation at credit union conferences entitled “Six Ways to Maximize Executive Performance.” I conclude by reminding CEOs that everyone has blind spots. Only by identifying and understanding their own shortcomings and weaknesses can executives overcome them. Some CEOs may dismiss this notion, perhaps in the belief that their career success belies the idea that they could have significant professional faults. As a result, they don’t challenge themselves to grow professionally and are content with knowing what they know—which may not be enough in this rapidly evolving industry and economy.
Conversely, when CEOs aggressively push themselves to grow in their leadership and strategic skills, their organizations are better for it. I’d like to commend CUES member Paul Trylko of Amplify Federal Credit Union in Austin, Texas, who decided, back in the days when his credit union was a $100 million organization, that he needed a professional coach to help him grow in his effectiveness as a CEO. Over the years Amplify FCU has grown to about $750 million, largely because Trylko chose to invest in his own growth as well as the growth of the members of his executive team.
These examples don’t cover the full range of what can happen when CEOs aren’t adequately engaged with their CU operations, but they do offer some cautionary glimpses of the consequences. Good strategic management systems, such as a model I call the Eight Pillars of Strategic Alignment, can help combat these hazards. And CEOs who focus on building these systems—and their own leadership skills and organizational accountabilities—are far more likely to enjoy extraordinary success than those who disregard the need to build quality systems by working in and on their credit unions.
Scott McClymonds of CEO Velocity coaching and consulting, specializes in leadership systems that help credit unions acquire and retain profitable members. He can be reached at 479.263.0774.
