Article

Evolution of a CEO

By Diane Franklin

12 minutes

CUES Outstanding Chief Executive Tony Budet is a self-confessed reformed CFO who has learned the value of relationship-building.

Tony Budet - CUES Outstanding Chief ExecutiveWhen it comes to leading an organization to its highest potential for success, University Federal Credit Union President/CEO Tony Budet stresses that it’s relationship-building, not numbers-crunching, that has the greatest and most lasting impact.

Having served as CEO since 2000, Budet has reinvented his leadership role on several occasions, looking increasingly outward to forge strong, meaningful relationships that have solidified University FCU’s position as the premier credit union in Austin, Texas. The effect of this strategy on the CU’s growth trajectory has been remarkable. Over the 14 years that Budet has led the CU, the organization has quadrupled in asset size to $1.8 billion and experienced annual membership growth that has greatly outpaced the industry average.

Currently University FCU serves a total of 180,000 members, primarily in Central Texas and in Galveston. The CU’s field of membership encompasses 10 higher-education institutions, including the University of Texas at Austin, and more than 250 SEGs. To strengthen relationships in the community, Budet has been a presence on college campuses, at trade and civic organization meetings, and in the offices of major employers.

“I’ve been engaged in a quest to build an organization that is based on a foundation of relationships,” says Budet. “It’s become an integral part of who we are as a business.”

Budet, who is being recognized as the 2014 CUES Outstanding Chief Executive at CEO/Executive Team Network this month in Amelia Island, Fla., didn’t always value relationship-building as deeply as he does now. In fact, when he started his credit union career, he was a numbers guy through and through.

Born in the U.S. territory of Puerto Rico, Budet has lived in Texas since the age of 10 and earned a B.A. in economics from the University of Texas at Austin. His first credit union role was that of comptroller at Public Employees Credit Union, also in Austin.

In 1984, Budet happened to sit next to University FCU’s then-CEO Burton Eubanks at an executive conference in Dallas. It was a chance meeting that would ultimately change Budet’s life. The two men hit it off and decided to have lunch together.

“There was something about this man that made me want to work for him,” Budet recalls. Eubanks was similarly impressed with Budet, and he wound up hiring him as the CU’s CFO.

For the next 11 years, Budet sat in his office crunching the numbers, convinced he had a good handle on how to measure the credit union’s success. Then came a pivotal day in 1995, when Eubanks visited Budet’s office and told him that he planned to retire in five years’ time. Eubanks surmised that Budet might have some interest in his job, but stressed that there were some shortcomings Budet would have to overcome to be considered a viable candidate.

“No. 1 is when I come into your office, I notice that it’s not very welcoming,” Eubanks told Budet. “You’ve got your back to the door, you’re engrossed in some massive Excel spreadsheet, and you think if all the numbers on that spreadsheet add up, that all is right with the world.”

Eubanks then proceeded to reveal the key to succeeding as a credit union leader—the ability to build relationships. “Quite frankly, Tony,” he told his CFO bluntly, “you stink at relationships. Now that’s the bad news. The good news is that we have five years to work together on improving your people skills.”

Over the next five years, Eubanks put Budet through some heavy-duty coaching and mentoring. “He spent a lot of time taking me out to meet key people in the community and at the local universities,” Budet recalls. “He set me up for success by showing me how to build relationships.”

When it came time for Eubanks to retire, the University FCU Board of Directors chose Budet as the new CEO. Budet took his mentor’s advice and put relationship-building at the forefront of his leadership strategy. In the early days, it wasn’t always easy. Sometimes he had to fight a tendency to put numbers ahead of people.

“I call myself a reformed CFO,” Budet says. “The better I got at relationships, the better I did as CEO.”

A Need for Reinvention

After a year or two of leading the credit union, Budet realized that all the responsibilities he had in managing day-to-day operations left him with little time to devote to relationship-building. That’s when he first identified the need to reinvent his role.

“When I retire, I don’t want to point to hitting a certain number on a spreadsheet as the major achievement of my career. Instead I want to point to the people we’ve helped, the relationships we’ve built and the transformative impact that this not-for-profit cooperative has had on the communities we serve.”
~Tony Budet

“In 2000, when I first became CEO, I would classify myself as a ‘do’ leader,” Budet explains. “I tended to do things that I should have been delegating to others.”

This assessment was confirmed when Budet attended CUES Symposium: A CEO/Chairman Exchange, during which a speaker observed that most CEOs do not delegate well. Budet listened intently as the speaker described a waterline delegation model designed to free up a CEO’s time by giving the executive team the authority to make all decisions with above-the-waterline implications—in other words, decisions that don’t have the potential for sinking the organization.

With the support of the University FCU Board of Directors, Budet implemented the new delegation model in 2002.

“I pulled together my management team and told them that rather than coming into my office to secure a signature or ask permission on every decision they make, they should go through the mental exercise of fast-forwarding decisions two or three years into the future,” Budet explains. “What were the worst possible consequences if the decision went wrong? I told them my intention was to delegate all decisions with above-the-waterline consequences. They were only to come to me with decisions that might have below-the-waterline consequences.”

The reaction among his executive team was mixed at first. “Some of them fell into the paradigm very quickly,” Budet reports. “With others, I had to practically shove them out of my office.”

Eventually the executive team adapted to the new delegation model. However, Budet admits that it was difficult for him to give up so much control of the daily operations at the credit union. “It was one of the toughest things I’ve ever done. Suddenly it got very quiet in my office. I struggled with that completely out of selfishness.”

Ultimately, Budet saw the positive effects of being able to concentrate more fully on strengthening relationships with universities and other local organizations. This put University FCU in a better position to meet its vision, “a higher-education community made strong through shared values and high-impact relationships.”

“You’ll notice that our vision doesn’t mention banking. It doesn’t mention numbers, finances or money,” Budet explains. “Instead, what we’re doing is partnering with the campuses to make them stronger. They generate talent critical to community growth, and as people come into the community, they’ll need checking accounts and mortgage loans and car loans. The business comes back to us.”

With this new strategy fueling growth at the credit union, University FCU reached $1 billion in assets in 2009. This was more than double the $430 million in assets that it had when Budet assumed the CEO role nine years before. More critically, membership growth—the metric Budet believes most reflects a credit union’s relevance—began averaging 9-10 percent annually.

Having reached these milestones, Budet started contemplating a second role reinvention that would give him even more time to forge relationships. In 2011, by which time University FCU had climbed to $1.46 billion in assets, Budet unveiled a new organizational structure that included creation of a new position: executive vice president. Budet appointed the CU’s experienced CFO, Yung Tran, to that role.

The rest of the executive team would now report directly to Tran while Tran and Budet’s assistant would be the only individuals reporting directly to Budet.

“I also asked my staff to amend their job descriptions to aim themselves more externally,” Budet reports. This new approach would ensure that other key staff members, not just Budet, would be out in the community building relationships and creating more awareness of University FCU as an involved corporate citizen.

Balanced Leadership

Another key moment occurred on Nov. 8, 2013, when Budet sat down to informally sketch out the evolution of his leadership role. By then, the CU had grown to more than $1.6 billion in assets. While his previous reinventions had set the CU on an aggressive path for growth, Budet still saw the need for fine-tuning. “To me, leadership is a trek that never ends,” he says.

His latest adjustment was not so much a reinvention as it was an assessment and fine-tuning of how he spends his time. In all, he devotes a third of his time to his role as the CU’s cultural leader, another third to his commitment as a civic leader, and the final third to his role as a credit union thought leader, serving on various credit union boards, committees and coalitions.

As the CU’s cultural leader, Budet sets the tone for the organization and ensures it remains true to its values. He regularly meets in small groups with all leaders and with all new staff members to communicate the credit union’s vision and to ensure that their values are well aligned with those of the organization. “I make it clear to new colleagues that we are not joining them—that they are joining us,” he says.

Budet is active in the Austin Chamber of Commerce, Opportunity Austin, the Greater Austin Crime Commission, and development councils for the University of Texas, Concordia University Texas and the University Medical Center Brackenridge. He also is a former director of several organizations, including Greenlights for Nonprofit Success, devoted to strengthening Central Texas nonprofit organizations. Greenlights leases space in the University FCU headquarters building at a greatly reduced rate.

“This not only supports a great organization, but it’s also been beneficial to us to have various community leaders coming in and out of our building,” Budet explains. “It’s another opportunity for us to build relationships.”

Budet continues to devote countless hours to building the relationships that have become so valuable to the CU’s growth. This has come with a realization that relationship-building means not only being generous with time, but also with money.

Among its most substantial monetary commitments, the CU has invested $16.2 million for renovation and naming rights of “UFCU Disch-Falk Field,” the baseball stadium at UT-Austin. Additionally, the CU has donated $1.5 million to Seton Hospital on the UT-Austin campus, $2.2 million to St. Edward’s University for a variety of facilities and scholarship initiatives, $625,000 to Texas State University, $300,000 to the Concordia University Texas nursing program, and substantial funds to others.

“The CFO mentality would look at all the checks we write and say that this is a big expense, but I prefer to look at it as an investment,” Budet reports. “What we give to the community comes back to us in so many ways.”

Giving to the community monetarily means University FCU perhaps has a lower net worth, Budet acknowledges. “But building net worth is not what we’re here  to do. We’re seeking to transform our community—to improve quality of life—through the power of a not-for-profit member-owned cooperative.”

Supportive Board, Super Staff

Budet’s form of leadership is difficult to measure. Therefore, he’s made sure to keep his board of directors informed of every transition in his leadership style. He also has asked the board to evaluate him more regularly than once a year.

“Tony made it clear that he didn’t want to hear just superlatives from us,” explains Jerry Davis, University FCU’s chair, and CEO of Goodwill Industries of Central Texas. “He wanted us to provide more critical feedback on a more timely basis. So now we evaluate him on a quarterly basis.” (Budet and his board are members of the Center for Credit Union Board Excellence.)

Davis says Budet is humble, yet confident. “He is one of those people who can take criticism well and is very open to suggestions. What is special about Tony is that he is a student of leadership. He views the board as strategic partners and also as friends. He’s not only undertaken an evolution of his own position, but he’s also helped us to evolve our leadership and governance. He has led us into a new state of being with an approach that is relationship-based and outwardly focused.”

This approach would have never worked, Davis adds, if it weren’t for the commitment and dedication of the CU’s management team. “Tony has assembled an extraordinary staff, ensuring that the credit union is in good hands while he is out in the community, extending himself and building our social capital.”

The caliber of the staff has been enhanced by Budet’s commitment to his team’s professional growth and development. A few years after he became CEO, Budet participated in an executive coaching program. The process involved honest evaluations of his strengths and weaknesses by his key executives and the one person who knows him best—his wife, Nancy.

After completing the program, Budet had key members of his executive team go through the program as well. They, too, got some frank and honest assessments of their strengths and weaknesses from their colleagues at the credit union. Rather than engendering hurt feelings, however, the process proved an important growth experience for everyone involved.

“When you’ve already been blunt and brutally honest with each other, it’s no longer hard to offer your opinion,” Budet says. “Going through a program like that brought everyone together. It really enabled us to gel as a team.”

A participant in the coaching program, Sheila Wojcik, Ph.D., appreciated Budet’s interest in her professional development. “Tony has always had confidence in me personally and in others as well. That kind of confidence has been very inspirational,” says Wojcik, University FCU’s SVP/communications and corporate affairs.

Wojcik recalls how Budet promoted her to the position of VP/human resources—her first VP position—even though she had no prior experience in human resources.

“He saw something in me that I didn’t see in myself,” Wojcik says. “He’s done that with others as well, promoting them into previously unforeseen territories because he has confidence that they can handle the job.”

The new reality at University FCU has served the CU well, as growth  attests. However, Budet won’t be looking at those numbers as the ultimate measure.

“When I retire, I don’t want to point to hitting a certain number on a spreadsheet as the major achievement of my career,” he says. “Instead I want to point to the people we’ve helped, the relationships we’ve built and the transformative impact that this not-for-profit cooperative has had on the communities we serve.

Diane Franklin is a freelance writer based in Florissant, Mo.

CUES Learning Portal