The Ghostly Lessons Learned by Some CUs

COOPERATIVE CEMETARY, USA–They are memories that haunt credit union leaders to this day–simultaneous conversions, branches in “un-nice” places, and even a “Boogie Man Of Ambition.” They’re also the kinds of ghoulish lessons in management those same leaders say they will take to their graves.

As Halloween arrives, in this the first of a two-part series, credit unions share their Tales of Terror with, telling chilling stories about some of the decisions the CU has made over the years that have come back to haunt the organization.

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At least two credit unions that have ultimately avoided the graveyard of decisions gone bad said they have learned that attempting to do too much—or reach too far—can lead to nightmarish results.

In San Bernardino, Calif., the $85-million Thinkwise FCU still fears the “Boogie Man of Ambition,” and swears that bugaboo won’t come rapping its bony fingers on its doors again.

“In 2014, we decided to take on three major projects: a name change, a core conversion, and a card processor conversion,” recalled CEO Heri Garcia. “Being the ambitious team we are, we decided to tackle the projects in 2015. Well, due to timing, we changed our name in July of 2015. Our core conversion quickly came up in September of 2015. The card processor conversion started in December of 2015 but finished in the second quarter of 2016. Let me tell you, that was way harder than anticipated.”

Even though the credit union was ultimately successful with each project, the efforts took their grisly toll on Thinkwise, Garcia said. 

“I would never want to repeat that again,” he said. “Now, whenever I start looking at projects, I take a closer look at the timeframes to make sure my staff and I do not get to the brink of fast-paced, terrifying madness again.” 

Entering the Graveyard

At Pioneer West Virginia CU in Charleston, W.Va., CEO Dan McGowan said he will always be haunted by the time the $205-million credit union tried to extend its reach into an area that was not a financial hotbed—a graveyard for banks and credit unions.

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“Back in 2013, we merged in a small troubled credit union in a nearby town,” said McGowan, about the move he now reflects on with trepidation. “One of the primary attractions of the merger was an opportunity to expand our community charter by four additional counties.”

The small merged-in CU had two offices, one which served its historical membership base of manufacturing plant workers, and another “nice” branch on the other side of town.

“Unfortunately, the very nice branch was located in a very un-nice part of town, which, as time went on, provided us with some insight into why it was difficult to get member traffic there,” said McGowan. “Ultimately, we closed it as an under-performing branch and put up a for-sale sign. Five years later, as we close 2018, we’ve written down the value of the branch property by 50% and are still hoping to liquidate it without further loss recognition. We still debate whether or not getting the additional market area was worth the cost.”

Never-More Land

In Milford, Conn., Nutmeg State Financial CU says it will “never more” suffer from ghoulish human resources decisions.

“If you ask anyone on Nutmeg’s management team about an organizational decision we’ve made that has come back to haunt us, we could probably think of a few. And, interestingly, it’s what makes us so successful. We make a mistake, fix it and move on, never to make the same mistake again,” said CEO John Holt. “In the past we have struggled with fitting the right people into the right roles, which is bad for both the organization and the individual.”

Holt noted that Nutmeg is not the “typical” credit union—asCUToday.inforeported, Nutmeg has opened an office of Connecticut’s Department of Motor Vehicles in one of its branches.

“Ensuring the right people are in the right position is important to our success. As an organization, we have struggled with permanency—in both tenure and short-term employment—within some key areas of the organization, which resulted in lost process documentation, lost operational efficiencies and lost internal knowledge,” said Holt. “It also resulted in lower productivity and inconsistent service levels. As such, we knew we had to make changes to our recruiting, hiring and screening process to ensure employee longevity and engagement, productivity, profitability, and consistency.” 

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To remedy the ghastly situation, Nutmeg developed a recruiting and onboarding strategy to ensure all of its new hires are set up for success. 

“We started using the Predictive Index assessment tool in order to determine fit,” said Holt. “People tend to put their best foot forward in an interview, therefore, evaluating candidates based on demands of the job, degree of interaction with others, follow-up, communication, knowledge and skills helps ensure less turnover and more stability for the credit union. Additionally, each position within the organization has an ‘ideal’ personality type. The assessment looks at key competencies, motivators, and behavior. The intent is to help put the right people in the right positions, and the thinking is that when people are put in a position that is suited to their inherent skills, behavioral style and values, they will achieve success for themselves and the organization.”

The move has led to less turnover—down 15% from its highest level—and a much more engaged workforce: now the CU receives at least 94% participation in employee events. 

“We struggled in the past, and made hiring choices that did not fit the role, but we’ve put tools in place to ensure this no longer happens. Attracting the right talent is key to retention, and key to the growth and profitability of Nutmeg,” Holt said. 

Much like an apparition, part II will appear tomorrow in 

Section: Standard
Word Count: 1282
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Copyright Year: 2019
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