CUToday.info: What intangible of leadership have you found most difficult to convey or prepare for, or to teach as part of CUES’ programs?
Fagan: Organizational psychologist and author Richard Davis has said that wisdom is the most important leadership trait, but is exceedingly rare. He estimates that only about 5% of leaders show true executive wisdom, yet it is the foundation of many other traits of good leadership.
To be wise—meaning you are not just smart, but able to apply your intelligence—requires a range of experiences and life events that have challenged you, AND self reflection. Wise leaders evaluate why things happen, review their reaction to events, and consider what they would do differently in the future. This is a difficult thing to teach in the classroom, but it can be learned.
Leaders who exhibit executive wisdom are disciplined to their approach. They set time aside to consider their major decisions from the week and what they learned. They have mentors to advise them and challenge their assumptions, welcome viewpoints from across the organization, and get input from trusted colleagues outside their own company. This feedback helps leaders challenge their thought processes, evaluate their decision-making, and cultivate skills that will help them become stronger leaders. It’s a discipline that requires a weekly commitment beyond an executive education course or conference.
CUToday.info: CUES has built an expertise in professional development, including academic programs. Are there a few management books that you recommend, and why?
Fagan: There are a few classics that I like to recommend because they often come up in conversation and classes. Books like Jim Collins’ Good to Great and John Kotter’s Leading Change have helped set the tone for modern business practice, so it’s important to have a working knowledge of them. Michael Porter is also commonly cited, but frequently misunderstood. For a clear explanation of Porter’s principals, I like Joan Magretta’s Understanding Michael Porter.
In addition to these foundational pieces, there are many authors who are pushing business practices in new and interesting directions.
- Paul Schoemaker’s work in scenario planning, detailed in Peripheral Vision and Decision Traps, is the foundation of CUES’ CEO Institute I program at Wharton and enables leaders of organizations to stay ahead of and plan for changes in the environment in which they compete.
- On the leadership front, Rob Goffee and Gareth Jones cut through the noise of countless leadership gurus with Why Should Anyone Be Led by You? They offer a more intricate, human-centered approach to authentic leadership than many books that hold up historical leaders—from Moses to Martin Luther King, Jr.—or list endless competencies.
- Les McKeown’s Predictable Success is also an outstanding read for better understanding business growth. McKeown, one of the speakers at CUES’ CEO/Executive Team Network last year, outlines a common sense, repeatable process for sustainable growth.
I could go on, but that’s a pretty good list to start a management library.
CUToday.info: Innovation: four syllables getting all the attention. Deservedly so? If so, can you really drive innovation? Or is it coming at the cost of implementation and delivery? And can people really be taught to be innovative?
Fagan: Credit unions aren’t competing only against traditional players anymore. There are disrupters stepping into the financial services space and stripping away business from credit unions. And they’re not trying to be full-service providers. Instead they focus on a single facet of our business—whether price, convenience, or user experience—and do it exceptionally well. Consider Simple. It’s a saving and payments system with an appealing, intuitive online and app-based user interface, and terrific customer service. No auto loans. No mortgages. No branches. And in 2013, it grew from 20,000 customers and $200 million in transactions to 40,000 customers and over $1 billion in transactions. That’s some serious competition for the attention of our members and potential members.
We need to be innovative in our approach to business to compete with these disrupters. However, innovation is not easy and requires a structured approach. I think about it in two parts: culture and process.
The organization’s culture has to be aligned with the vision. This doesn’t happen as a fluke. It’s intentional and led from the top. The values, behaviors, climate, and resources of the organization have to support innovation. Values are defined by what the leaders do and invest in, and they determine our priorities. Leaders of innovative organizations discontinue products and services to make room for new and better ones, and cast a vision for the organization. They also do everything in their power to cut through red tape and find the funds and resources to act on innovative ideas, even when budgets are tight. Innovative companies also develop champions and mentors to help ensure ideas are nurtured, screened, and vetted at all levels of the organization. The goal is to engage employees and encourage independent thinking and risk-taking within a safe environment.
Processes are the formal steps an organization uses to develop, capture, and vet ideas, and then develop those ideas into projects and launch them. It takes more than a room full of creative geniuses for innovation to occur. It requires a disciplined plan for executing the ideas and bringing them to market. There are many resources available to develop these processes. Roger Martin’s The Design of Business and Tom Kelley’s The Art of Innovation are excellent books on the topic.
CUES’ Strategic Innovation Institute, hosted at MIT Sloan and Stanford Graduate School of Business, also dives deep into these topics, discussing the importance of cultural alignment and change management, and providing hands-on opportunities to identify consumer pain points, prototype, test, and launch new ideas.
CUToday.info: My Keeps-Me-Up-At-Night concern is? Why? And My-Lets-Me-Sleep-At-Night optimism is?
Fagan: CUES has recently been researching the future landscape of the credit union system. In interviews with 40 credit union executives, association leaders, vendor representatives and other business leaders, we’ve heard repeatedly that credit unions simply aren’t prepared for the coming surge in retirements. Additionally, many people are afraid that hiring from banks will affect the culture of credit unions.
The reason for this concern is supported by several studies, including one done by D. Hilton Associates. This research indicated that in the five years following 2012, 6,100 C-suite jobs will turn over at credit unions with more than $100 million in assets. That’s a lot of predicted change that raises the question: Who will fill those slots?
That said, I have also seen the caliber of participants in CUES’ CEO Institute and schools. I have experienced their passion for the credit union mission first hand. There is terrific energy and talent in the credit union system. It’s clear that investing in current staff members who bring so much to the table can position the industry for future success.
CUToday.info: For leaders of small to midsize CUs who can't afford to attend management development programs, is there anything they can do to build those skills and, if so, what?
Fagan: John F. Kennedy once said that learning and leadership are indispensible to each other. Effective leaders never stop learning, but professional development is not solely about attending conferences or executive education programs. Most learning happens on a day-to-day basis, through the peer interactions, reading a variety of publications (credit union-specific and cross-industry), and with mentor relationships. CUES members have access to free webinars and educational content, an award-winning magazine, and online tools to help them connect with their peers. We’ve also developed blended learning leadership courses with the Johnson School at Cornell University, which allows executives to receive Ivy League education affordably and without travel. The resources are available. The most effective leaders take advantage of them.