CUES’ 2018 Outstanding Chief Exec Joe Newberry has overseen A noteworthy cultural change at Redstone FCU.
Joe Newberry believes in the power of transformational leadership. This leadership approach takes a great organization and makes it excellent, guiding the management team and employees alike toward becoming more innovative in their thinking. It’s an approach that requires a strong and visionary leader, which is what makes Newberry so worthy of being named CUES’ 2018 Outstanding Chief Executive.
“I try to practice as best I can to be a servant leader and have a transformational leadership style,” says Newberry, who has been the president/CEO of $4.8 billion Redstone Federal Credit Union, Huntsville, Ala., for more than 10 years.
In his role as a transformational leader, Newberry has led Redstone FCU through a cultural change that has greatly improved the organization’s processes, products and performance. As he explains, “You can create an amazing strategic plan; however, culture is the engine that drives strategic objectives and performance. You need your people aligned and a culture that supports it to achieve desired results.”
Redstone FCU has recently won a number of prestigious awards that highlight its success at redefining a culture to better serve its 428,000-plus members. The CU’s most noteworthy achievement was announced at the Business Transformation & Operational Excellence World Summit, BTOES18, held this past spring in Orlando, Fla. Administered by London-based Global Media Research LTD, the awards program attracts nominations from all over the world.
Not only did Redstone FCU take home the award for Best Achievement of Operational Excellence in Banking, Capital Markets & Insurance, but it also went on to win the night’s highest honor, the Platinum Award for Best Achievement in Organizational Operational Excellence. To claim this award, Redstone FCU had to distinguish itself against such international powerhouses as Bristol-Myers Squibb, Apple Leisure Group and IBM.
Another major honor came a few months earlier from Money magazine (time.com/money), which named Redstone FCU the best “bank” in Alabama. Though Newberry admits that the word “bank” did give him pause, he is still very appreciative of the award. And recently, the National Association of Federally-Insured Credit Unions named Redstone FCU the Credit Union of the Year for 2018.
The CU’s success has generated some astronomical growth figures. In the three years prior to the implementation of its cultural transformation initiative (2011-2014), Redstone FCU achieved modest loan growth of 3.96 percent and asset growth of 17.43 percent. In the subsequent three-year period (2014 to 2017), loan growth skyrocketed to 41.98 percent and asset growth to 31.56 percent. When expressed as percentage change, loan growth accelerated by 960.63 percent and the asset growth size by 81.04 percent.
Newberry is particularly proud of Redstone FCU’s growth in membership giveback during this same time period. “The board approved a strategic objective to allocate a minimum of 40 percent of our budgeted net income after dividends to member giveback every year,” he reports. “In addition to member giveback in the form of dividends, we try to give back daily depending on the desired behaviors we want from our members, such as more utilization of our products and services.”
Examples of daily incentives include giving members a nickel every time they use their debit cards, providing better rates and fees to those who have a checking account, offering attractive credit card cash-back rates, and having zero closing costs on mortgage loans for specific promotional periods.
As a result of this strategic objective, Redstone FCU boosted its growth in average annual member giveback (after dividends) from 2.54 to 33.52 percent—or a whopping 1,218.92 percent.
Achieving the Transformation
Newberry’s rationale for implementing a cultural transformation at Redstone FCU was to develop a more cohesive, synergistic environment for growth. “We had always achieved very good financial numbers, but we started doing internal surveys and found out that our culture at that time was structured around departments operating in silos and not aligned around results,” he says. “So, we asked ourselves how much better could our results be if we got our culture right? We partnered with a company called Partners in Leadership to help us achieve that.”
Part of establishing the culture was helping employees understand the “why” of their job functions and not just the “what.” “When you are able to explain to employees why we exist—that we’re committed to always adding value to our members—I think it creates an enormous amount of synergy. That is what is propelling our growth beyond our wildest imagination,” Newberry states.
With the assistance of Temecula, Calif.-based Partners in Leadership, Redstone FCU undertook a process that focused on accountability, leadership and cultural transformation. Through this process, the CU was able to achieve higher engagement with members, increase cross-functionality throughout the CU and hit organizational goals on an accelerated basis. “Our goal was to get our employees focused on the way they think and behave around our desired results as set by the board of directors in our strategic plan,” Newberry says.
One significant metric for success was a cultural assessment score. A baseline assessment was conducted in 2014, surveying all members of management on cultural attributes, accountability and achieving results. An improvement assessment was then conducted in 2015. According to Partners in Leadership, a “world-class” score for culture change is an eight out of 10; Redstone FCU scored 7.4 in the nine-month period after implementation. A second survey was completed in October 2018 measuring slightly different cultural components—the CU earned an overall score of 4.11 out of 5 on the new scale, or 8.22 out of 10.
Part of the CU’s success is attributable to the synergistic combination of employee strengths and skills. “We identified the top five innate strengths of our employees through a tool called StrengthsFinder, which we use extensively here,” Newberry reports.
“Everybody has at least five innate strengths that they do better than 10,000 other people—expressed as behaviors. For example, you may be analytical, you may be a relator to people or you may be very focused. We try to work with teams and encourage them to utilize their strengths. As part of the process, I try to encourage, inspire and motivate employees to be innovative.”
A Cooperative Spirit
Newberry’s commitment to transformational leadership has evolved from a collaborative and cooperative spirit that has guided his career for more than four decades. He graduated in 1975 with a Bachelor of Science in business administration marketing from Auburn University, Auburn, Ala. He gained additional skills specific to the financial services industry by attending the Banking School for Executive Development at the University of Georgia, completing the program in 1984.
“I followed my high school sweetheart to Auburn, and we eventually got married,” Newberry reports. He and his wife, Marie, have now been married 42 years. They have two grown children—a son and a daughter—as well as four grandchildren.
“Both of our kids also went to Auburn, and their spouses went to Auburn, so we bleed orange and blue,” Newberry says.
Newberry’s credentials impressed his first employer, a Huntsville savings and loan. He came on board as a management trainee and worked his way up to senior executive vice president after 18 years. It was at the savings and loan that Newberry first saw the value of a cooperative financial institution, which would drive his transition to a career in the credit union industry.
“When I reflect back on it, I think it really ties back into my personal values,” Newberry says. “One of those values is a mission of service, which translates back to people helping people. That was true in my S&L days and especially in my credit union career. I don’t think anybody should work or volunteer for any organization unless it aligns with their personal values, and certainly the credit union movement aligns with mine.”
When his employer was bought out by a regional bank in the early 1990s, Newberry suddenly found himself out of a job along with approximately 150 of his co-workers. Fortunately, he knew the then-president/CEO of Redstone FCU and was able to describe how his professional experience fit the needs of the credit union. “Before too long, he hired me to work at Redstone,” Newberry reports.
Newberry stayed at Redstone FCU for almost 14 years, initially as VP/lending and later as executive vice president over several departments. When an opportunity came along to become CEO at $1.6 billion Achieva Credit Union in Dunedin, Fla., he knew he couldn’t pass it up. Although he moved to Clearwater, his heart—and much of his family—remained in Huntsville. When Redstone FCU’s president/CEO passed away just a few months later, it didn’t take much convincing for Newberry to agree to take over the position at his former—and now current—credit union.
“I think we moved about four or five times during that year,” Newberry recalls. “When we came back to Huntsville, my wife said if I tried to move again, she was going to nail the furniture to the floor.”
A Challenging Start
Newberry’s first year as CEO at Redstone FCU presented considerable challenges. “It was 2008, the year of the Great Recession,” he recalls. “I remember having to deal with loan loss provisions and loan losses during that time. But we were more fortunate than most. We were not in a ‘sand state,’ like my co-leaders in Florida, or in other areas that were really devastated. In Huntsville, the Department of Defense, the Army and NASA make up over half of our economy, and they were still going strong fighting the war on terror. So, we were able to weather the storm.”
Redstone FCU also had a competitive advantage. Many of the big banks were trying to offset losses by raising fees, and people were looking for a better alternative. “We had a reputation as being part of another type of financial institution, so we had consumers coming to us,” Newberry says.
So, even during the recession, Redstone FCU was able to boost its membership numbers. “Since 2008, we’ve been averaging over 1,000 in net membership growth per month,” Newberry says. “And this past year, we averaged over 1,500 net membership gains per month. If there was one silver lining to come from the Great Recession, it’s that we were able to show America that there’s a better financial model out there, especially for people of modest means.”
Vision and Innovation
Under Newberry’s leadership, Redstone FCU has worked hard to make the organization a great place to work for its approximately 1,000 employees. Some of the improvements instituted under his watch include a defined benefit pension plan, a wellness program and an in-house clinic operated with a nurse practitioner. “I’m very proud of those things that we’ve done for employees,” Newberry says. “You’ve got to take care of the people who take care of our members first.”
This type of leadership is appreciated by the employees who have seen Redstone FCU thrive with Newberry at the helm. Among the senior employees who can attest to that is Jan Bias, the CU’s EVP/people and culture. Bias has worked with Newberry for more than 20 years, including the last 10-plus years directly under his leadership as CEO.
“I attribute the tremendous success RFCU has enjoyed in great part to his vision and leadership,” Bias says. “Joe naturally possesses the qualities required of great leaders: integrity, trust, passion, commitment, humility and empathy.”
What sets Newberry apart, Bias adds, is his ability to use those qualities to inspire others and build relationships. “He is well-known and highly respected as a leader in the communities we serve, as well as across the state. He works tirelessly to lead our efforts in carrying out our vision and mission, always focused on our members. He sets the example at the top.”
Bias also observes that Newberry has a unique relationship with Redstone FCU’s employees. “He openly communicates with our employees and welcomes their feedback. He makes himself available through frequent department and branch walkabouts, asking questions and listening. He sets the bar high for his executive team and expects the best from all of us.”
By setting that bar so high, Newberry’s team has achieved great results in a way that has kept Redstone FCU on the leading edge of innovation. As he explains, “We’re always asking the question, ‘How can we improve, and what can we innovate?’ Sometimes that involves process improvements.”
As an example, Newberry points to Redstone FCU’s development of the Electronic Lobby Manager Operations software—otherwise known as ELMO—to help manage lobby resources at its branch locations, reduce member wait times and improve the member experience.
This is just one instance of successful technology development that makes Redstone FCU an industry leader—and it’s an advantage that the CU readily shares with others.
“We created a CUSO called Redstone Consulting Group to write innovative software for us as well as for other credit unions and financial institutions in the country,” Newberry reports.
Another major component of Redstone FCU’s success is an ongoing focus on community service. As part of its cultural transformation, the CU’s average annual growth in community development contributions went from 6.09 percent in 2011-14 to 101.57 percent in 2014-2017. That translates to an astounding 6,688.79 percent change.
This culture of community service starts at the very top. “I try to set examples about volunteering in organizations in the communities we serve,” Newberry says. “That’s the culture we want to encourage.”
Newberry has been chair of the United Way of Huntsville/Madison County. He was chair of the board of directors for the Huntsville/Madison County Chamber of Commerce when it won an award as the best Chamber of Commerce in the United States. He also has served on the board of the American Heart Association and was appointed by Alabama’s governor to serve on the board of the Space and Rocket Center, Huntsville’s most popular tourist site. He was also president of the Rotary Club.
“One of the things I’m most proud of is the Martin Luther King Jr. Unity Award, which I received for all of the service that I try to project out into the community,” Newberry says.
Even with so many professional and civic commitments, Newberry still finds time for a few extracurricular activities. He enjoys beekeeping and also manages a pecan tree orchard on property he owns outside of Huntsville.
A Positive Influence
In contemplating what has helped him achieve success, Newberry points to the valuable mentorships he has had over the years. He has encouraged a similar professional development culture at Redstone FCU, positioning senior employees to serve as mentors and coaches for others in the organization.
“I’ve been very blessed throughout my career, because I’ve had an enormous number of people who have been mentors and heroes to me,” he says. “I want our employees to do the same because you never know how much influence you’ll have on other people. That’s the type of leadership environment we’re trying to create. We always try to encourage our employees to grow their careers here at Redstone.”
Moving forward, Newberry plans to continue encouraging a culture that makes Redstone FCU an important part of its members’ lives and well-being.
“We’re always trying to add value to our membership,” he says. “I think that is the reason we exist.”
Diane Franklin is a freelance writer based in Missouri.