Insights on Growth, Managing People & Future

BURNSVILLE, Minn.–Be authentic and true, move to get rid of toxic employees while aligning everyone else, and don’t forget Ed Filene’s advice. Those are some of the recommendations from Bill Raker, who became well-known to many in credit unions before recently retiring from Firefly Credit Union. 

In this Exit Interview, Raker shares his insights on driving growth, managing people, and what he would tell himself if he could go back to his first day as CEO.

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While in credit unions, Raker, who led Firefly for more than 20 years (including overseeing its name change from US FCU) and oversaw growth to $1.2 billion from $250 million in assets, led a CU that won numerous state and national awards for everything from lending to community service to its internal workplace culture. Raker was also active onseveral regional and national boards, as well as the World Council of Credit Unions’ International Executive Volunteer Corps, where he did work in Paraguay and Cambodia. In 2009 was awarded the Minnesota Credit Union Network’s Outstanding Credit Union Professional of the Year; in 2015 was inducted into the Credit Union Hall of Leaders at the Credit Union House in Washington, D.C., and in 2016 was added to the Credit Union Executive Society’s Hall of Fame for lifetime achievement and contributions to the credit union movement.

Below, Raker shares his recollections as well as some of what he learned during his career as part of this Exit Interview. How did you come to be involved in credit unions?

Raker: The year was 1969. I was a first-year math teacher in the Fort Knox Dependent School System. One day there was a knock on my classroom door. I opened the door to find the superintendent of schools asking me into the hallway for a conversation. He explained that the military command at Fort Knox, Fort Knox Federal Credit Union and the Dependent Schools were collaborating to establish a student-run credit union for the high school, and the superintendent was asking me to be the faculty advisor/sponsor. 

That was the first time I had ever heard the term “credit union.” The superintendent went on to explain that if I agreed to the faculty advisor role, Fort Knox Federal Credit Union would give me employment during the summer months when school was not in session. Summer employment for a school teacher – I’m in! That was the first student created and student-operated credit union on record. Quickly, I learned the history, mission, philosophy, organization and operations of credit unions; and I was on to a new career. 

Within a couple of years, I left the teaching job and took fulltime employment with the credit union – and thus began my credit union career. During my career, I worked in nearly every staff position of the credit union. I managed marketing, sales, and service for a vendor of credit union DP systems; I served 12 years as a director on the credit union board, two terms as board chair; and finished out my career with 21-plus years as CEO. It has been a fantastic run!

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Bill Raker What have you learned during your career about growing a credit union and managing growth, and has that evolved?

Raker:  Fundamentals to good growth: The credit union must have a clear vision, an inspiring mission, and employees who are committed to both. There must be a clear line of sight for everyone on what the goals are.  Board, management, and staff must be aligned on direction, priorities, goals, and recognition and reward programs. Agreement on what “Member Value” means and how to deliver it is essential. Focusing on “Exceptional Member Experience” at every encounter and in every delivery channel is key to the culture of a growing organization. 

For a strong balance sheet and good performance ratios, I believe the credit union should pursue “balanced growth,” meaning assets, liabilities, and net worth should be managed so all grow at roughly corresponding rates. Key growth metrics include, assets, deposits, loans, memberships, share of wallet, revenue, and net worth. Attentive management looks to see that emphasis on and dramatic growth in any one metric does not significantly diminish the positions of the other metrics and/or create excessive risks to the balance and stability of the organization. 

It seems this approach to growth hasn’t changed much over time, except for the increased burden of regulation, the increase in traditional and nontraditional competition, the complexities and necessities of newer technology, the evolving demand from members for faster, more convenient, more intuitive service delivery, and the impact on business of social media on what consumers “know” and “like” and “share.” All those are pretty impactful on growth. What did you learn during your career about managing people, and did that evolve or change?

Raker:In general, people (especially Millennials) seem to prefer being led, inspired, coached, mentored and empowered over being “managed.” An effective manager is an exemplary role model for the entire organization, showing and doing as well as telling. Some of the attributes and behaviors often lacking (or lagging) in managers are transparency, integrity, humility, empathy, and relatability. 

Hire the best people. Provide continuous relevant training. Make the necessary tools and systems available and keep them current. Be clear on the desired outcomes and processes. Foster a culture of respect, trust, teamwork, collaboration, and hard work. Recognize and appropriately rewarding desired behaviors and results. Encourage and support professional development and advancements in careers. Lead employees in celebrating successes and milestones and in having fun at work. 

Of course, some of the most influential nuances and intricacies of these tenets are continuing to evolve with changes in the ages and genders of the workforce, the expanding diversity of cultures and ethnicities, ranges or gaps in education and experience, the struggle with the balance between work and personal/family life. 

Stay observant and adaptable to the changing needs and priorities of the workforce and the organization. When you learn there is a toxic employee in the organization (and there will be some), deal with them -- do not delay; they will poison the culture. If you could go back and talk to yourself and offer advice on your first day as CEO (or just management), what advice might you share?

Raker: Always be authentic and true to yourself. Be realistic with expectations. Be self- confident, but never arrogant or egotistical. Entertain more risks, but be prudent and rational. There is always a lot to learn; be open to it. Develop the ability to discern between sustainable trends and fads; be agile and adaptable to respond quickly when it’s clear the indicators are hot. Respect, engage, listen to, and collaborate with the executive team (direct reports) and the board.

Firefly CU

Firefly Credit Union, Burnsville, Minn.

Keep in mind your relationships with others and that success depends on the entire team working with you. As Ed Filene is reported to have admonished: “Keep purpose constant.” What is your view on the future of credit unions, if there is to be one?

Raker: I am optimistic. Credit unions do have a great future (likely not a clone of the present), if working together they can figure out what they need to do to create and sustain it. Credit unions must maintain their current tax status, otherwise everything unique to the fundamentals of credit unions is at risk.  

The concept of volunteer boards, while noble and commendable, is passé: The experience, expertise, education, time commitment, fiduciary accountabilities, and governance responsibilities demanded on directors has increased dramatically. To recruit, engage, and retain the most capable and effective men and women for the director’s role necessitates that they be appropriately compensated. 

A new generation of leaders is moving into the CEO roles and into the C-Suites; expect changes in the What, Why, and How credit unions operate.  

For credit unions to continue to be viable and sustainable, they must aspire to and achieve the following: 

  • New sources of revenue beyond the spread and investment income (CUSOs, new products/services, fees, etc.)
  • Maintain a value-added role (irreplaceable and revenue generating role) in the evolution of payment systems
  • Decide with conviction that they must cooperate and collaborate at deeper levels than ever
  • Adopt and implement advances in technology (cloud computing, artificial intelligence, Blockchain, etc.).
  • Legacy systems, on which so much of their operations are dependent, are serious impediments to credit unions’ growth, efficiency, and innovation. There needs to be a unified effort to pressure vendors to bring their mainline and core systems into the 21st century.

The continuing consolidation of credit unions into fewer but larger entities will afford benefits of scale that can be leveraged to gain increased political impact, greater efficiency, better “member experience” and enhanced “member value.” Listen to and observe the consumer, and lead the consumer­­– don’t just follow.

Section: Standard
Word Count: 1814
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Copyright Year: 2019
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