To Innovate, Get Nervous

When you find success, a lot of people are going to want the results you’ve had, but the question will be: “Are they willing to do what you’ve done?” I didn’t realize how prescient this question was, but coming from someone with as much experience as Dennis Dollar, I should have known.

In the just under six years that we’ve been a team, $320 million Tucoemas Credit Union, Visalia, California, has experienced the best period in its nearly 75-year history. In 2016, we were—like many credit unions today—struggling to get our trend lines going in the right direction. Income was down, yield was down, engagement was down, morale was … well, you get the picture. As one former credit union leader was leaving the building for the last time, she whispered to a colleague, “Don’t worry, the NCUA will take over this place in six months, and you’ll be fine.” Needless to say, we weren’t fine.

Since that time, our newly formed leadership team has made many hard decisions. We’ve given up things, eliminated things, paid for better things, focused on things, worked on hard things, implemented things, built and remodeled things, and even fired a few things. You can find the complete list in my forthcoming book, “Things That Almost Got Me Fired,” but to summarize, let me use two of our core values: We decided to Stop Doing Stupid Things so that we could Be Awesome.

Here are a few of our accomplishments:

• We earned Juntos Avanzamos certification from Inclusiv.
• We earned CDFI certification. 
• We achieved MDI certification.
• We added $3 million in grants into our community. 
• We grew our financial education program (Pathways) by 12 times in two years.
• We won Large Business of the Year from the Visalia Chamber of Commerce 
• We received a CUNA Diamond award for our brand refresh.
• We achieved Great Place To Work certification. 
• We delivered the best financial returns the credit union has seen in its nearly 75-year history, (even with the mini-recession and pandemic thrown in for fun). 

As our friends and neighbors have started to take notice of our trends on the rise, another thing has been on the rise: the number of conversations I’m having. There are two groups, those who “were just wondering” about … well, you name it, and those who “have been so impressed with what you’re doing and thought we might talk to you about partnering.” 

We are always excited to share our experiences. But I’ve noticed another trend. The farther we get into these conversations, the more I recognize how valid Mr. Dollar’s words are: Most want the results we’ve had, but few are willing to do what we’ve done. I’ve come to realize that innovation is hard. It’s one of those things people like to talk about, but when all is said and done, a lot is said, and little is done. 

So if your organization is genuinely interested in being innovative, and if, like us, you really need to improve, here are four things you should be willing to do:

1. Be Humble

I had no credit union experience when I started as CEO. A lot of folks thought that was a real knock. Most of us believe that industry experience is crucial for success. But research shows this has little to no bearing on a person’s ability to succeed. And in many ways, it’s a hindrance. 

When I started, I had no “we’ve never done it like that before” opinions. I knew my team had a better understanding of credit unions than I did. I was willing to learn from everyone. I was confident in my leadership skills but happy to listen and entertain new ideas. Most of my colleagues have spent a long, long time in credit unions. The problem is, when you’ve seen it and done it all, you often think you know it all, and that’s not helpful when it comes to innovation (or marriages, see my other forthcoming book, “It’s Better to Be Liked Than Right: A Know-It-All’s Guide to Relationships.”)

2. Be Honest ...

... not just about your lack of understanding about Ethereum or crypto-markets, but about your willingness to do new things. It starts with admitting you have a problem. Most of us believe that success will continue, especially when we’ve had some success. But like lobsters arguing over whether the pot is actually getting warmer, complacency comes for us all. That’s a problem. We have to be honest with ourselves and with our team; we have to admit that what got us here won’t get us there and that we will have to try new things. If we keep doing the same things over and over, expecting a new result, well, we all know where that leads. 

3. Be Uncomfortable 

It's comfortable being mediocre. Most of us wouldn’t like to think of ourselves that way, but look at your trends. Callahan’s Peer-to-Peer Analyzer is a tremendous tool for telling you if you’re too comfortable. Run a merger analysis with another credit union if you want to light a fire under your seat. Did that improve or harm your trends? If it improved them, don’t get too excited. That means you’re the “other one” in this scenario.

Innovation means we have to do hard things, and I don’t mean long division. We have to look at our products and services, our buildings and logos, our people, and our performance. If you start down that path and have a “Yes, we’ve struggled but it’s just the pandemic” answer for everything, you’re too comfortable. When I tell people that we had a candid and open conversation with our board about term limits and being insiders, they all agree it’s a much-needed conversation for the industry. When I ask about their board, they say, “Well, to be honest, our board is unique.” It’s probably not; they’re just too comfortable.

4. Be Willing to Take Risks

If you feel terrific about every new thing you’re doing, you’re not taking a risk. When I first started, we had peer-leading numbers. No one had a lower charge-off or delinquency ratio than we did. We were taking no risk and, in turn, helping nobody. The “good” news was we weren’t losing any money. The bad news was we weren’t making any either. Risk-based pricing took us several tries to get right. But today, we help more people than ever before, and we are more profitable doing it. What we were afraid to do in the past is precisely what we needed to do—and what our community needed.

Innovation is the fruit of a lot of failed attempts. The telephone wasn’t an overnight innovation; it was the result of the can-o-phone and the yell-o-phone and the write-o-phone that all failed before it. If you’re not doing at least one thing that makes you nervous, you’re not being innovative, and you won’t see the rewards.  

Let me finish by saying these are just my opinions. Sure, they are opinions based on education and experience and seeing the results of following these principles, but opinions nevertheless. And remember, I’m new here, so I could be wrong. I’d never run a credit union before 2016 or been through a recession (yes, some people actually think that matters, but I’m working on a book about recessions, so watch this space). But what I can tell you is that it worked for us. We needed to change, to improve and to innovate. We believed in our team and really wanted to see our credit union thrive for ourselves and for our community. We not only recognized that we needed to do something, but we were also willing to do the something that was needed. We were willing to be innovative. What about you?

CUES member Brice A. Yocum, JD, CSME, CCE, is CEO at $320 million Tucoemas Federal Credit Union, Visalia, California. In his free time, he enjoys writing books but struggles to make it past the title page.