Leadership Competencies for Credit Unions

hand reaching out with a marker to write on a colorful word cloud of leadership-related terms shaped like a light bulb
Lin Grensing-Pophal, SPHR Photo
Contributing Writer

9 minutes

These are the 11 skills needed to be an effective leader in 2022 and beyond.

Over the past two-plus years, organizations, including credit unions, have had to find new ways to work, new ways to interact with employees and members, and now, even in the face of a return to quasi-normalcy, new ways of anticipating and operating in the future.

We will never be the same.

Amid this change and uncertainty, in the fall of 2021, CUES worked with TalentTelligent, Winston Salem, North Carolina, a research-based talent management tool provider, to determine the most critical credit union leadership behaviors needed to drive effectiveness and relevancy for the industry. Respondents to the survey included credit unions across asset sizes and geography and individuals from staff level all the way up the board across CU functions. Findings are based on fully completed surveys from 73 respondents.

The foundational question the survey sought to answer was: “What are the most critical credit union leader behaviors needed to drive effectiveness and relevancy for the industry in the next three to five years?” 

When considering the results of the research and the implications for individual credit unions, context is important, says Garrick Throckmorton, CSE, chief product and services officer and associate with TalentTelligent. The survey was done in the context of the credit union industry and provides insights from leaders across North America. “The next layer to this,” he says, “if we were to work with an individual credit union, is to take this research and ask, ‘How does this profile match what’s important in our credit union?’”

For example, “a $3 billion Pacific Northwest CU will have a strategy that’s likely very different than a $750 million Florida-based CU,” he says. This research, “was intended to be a discussion starter.”

The Leadership Landscape

The 2021 CUES/TalentTelligent research was designed to paint a broad stroke across the industry to elevate the mission-critical roles and practices needed by our leaders over the near term—three to five years. 

The most important practices identified by respondents, rank-ordered based on aggregate average, were: 

  • vision and strategy formation,
  • leading change and transitions,
  • critical thinking,
  • growth mindset,
  • motivating and influencing,
  • leveraging innovation,
  • developing others,
  • problem analysis,
  • engagement management,
  • resilience and resourcefulness, and
  • managing teams.

These research-based insights emerged through the study:

  • The identified leadership practices were framed through the lens of four domains: leading myself, leading people, managing my thinking, and applying knowledge and experience.
  • All practices are not created equal—some take more time and resources to develop.
  • Credit union leaders of the future need advanced emotional intelligence capabilities.

Credit union leadership is what makes credit unions stand out—what provides them with their competitive edge, Throckmorton says. It’s relatively easy for competitors to quickly “clone” ideas, products or services that CUs deliver. But, he says, the element that can’t be stolen or cloned “is the ecosystem that you create around your talent and your people.” That is the “market differentiator that creates sustainability.” 

Key Takeaways

Based on the research, there are some important takeaways for credit unions and their leadership teams.

One key takeaway, says Throckmorton, is that credit unions “need to be looking at talent and talent management through the lens of research.” Often, he notes, approaches can be too elementary or too simplified. “Human behavior is complex, and we need to be hiring people and developing people toward behavioral-based profiles that we know we can confidently say will drive effectiveness, given our strategies.”

It’s clear that effective leadership is critical for credit unions and other organizations to thrive. To be effective, talent management strategies must be aligned with organizational strategy and based on data across four key areas:

  • interviewing and selection;
  • self-directed learning and development;
  • 360° surveys and coaching; and
  • succession planning. 

What came out through the research “is pretty reflective of what I hear in my conversations with CU executives, whether they’re the CEOs or those in charge of HR and talent development,” says Christopher Stevenson, CAE, CIE, SVP/chief learning officer with CUES. 

Looking at the characteristics deemed most important—vision and strategy formation, leading change and transitions, and critical thinking—Stevenson says “these are all areas that people regularly point to as the most important for both emerging leaders and senior executives to develop.”

All of the leadership characteristics are important, he adds—“it’s just a matter of which are most important to focus on in the short term.”

Tonita Webb, CCE
Verity Credit Union
The process of changing competencies takes some time. It takes education and some trial and error. The most important thing in this process is creating psychological safety that allows these folks to develop new competencies and not be so concerned when they get it wrong.

What Today’s Credit Union Leaders Need

Credit unions of all sizes recognize the need for a more concerted focus on leadership and the need for leaders to develop leadership competencies that are different from what they have been in the past.

Today’s credit union leaders need to look different today than they did five or 10 years ago, reflects CUES member Jennifer Dickey, PHR, SHRM-CP, VP/talent and culture at $380 million Cornerstone Community Financial Credit Union, Auburn Hills, Michigan. COVID-19, she says, “launched the evolution of a new workforce with different needs, emotions and motivations. The change was fast and furious, causing organizations and leaders to reevaluate not only what work will look like going forward but how they will contribute to the success of that work and define how they will lead.”

Today’s credit union leaders, says CUES member Tonita Webb, CCE, CEO of $794 million Verity Credit Union in Seattle, are faced with a number of emerging issues that they need to respond to—issues related to diversity, equity and inclusion, technology, the rise of fintechs and more. Traditionally, Webb says, CUs have been relatively conservative institutions, but that conservative nature won’t serve them well moving forward. Today, “we have to be bold and ambitious.” It’s not about “throwing caution to the wind, but we have to set aside our aversion to risk.” 

Technology is also having a significant impact on credit unions and their members, Webb notes. “We need to be tech-savvy with a humanist lens.” It’s important to look at technology from a human perspective, she says—“how humans use technology, how humans navigate their lives—and we should not implement technology that causes our members pain.” 

In addition, CUs need to think about competition differently. “We have to think outside of our industry; we have to have a global mindset,” she says. “It’s not just other banks or credit unions that are our competition; we have to look at the fintechs and organizations like Amazon because they are dipping their toes in our business and they’re creating expectations for consumers that we have to meet.”

Credit unions need to understand what the competencies of their current leaders are, where the gaps are and how to provide the education, resources and support to close those gaps.

When evaluating her own leaders, Webb considers how they’re spending their time and the extent to which they’re being strategic. “Are they spending less time reacting and more time driving a transformative agenda? How frequently do I have to intervene in day-to-day operations? How are we developing others?” This is different than how she evaluated leaders in the past, she says, which tended to be based on metrics like how many loans were made or how many accounts opened.

Throckmorton says that the most robust way to assess leadership competencies is through 360-degree assessments or multi-rater assessment. These inputs can then be compared to the desired leadership profile for the CU based on its unique needs and goals. 

Help Leaders Develop New Competencies

Being intentional is important for developing leadership competencies and a best practice that successful CUs follow, says Stevenson. “They’re intentional about providing development opportunities in the classroom but then also allowing employees to stretch their wings a bit by taking on some development exercises.” 

That, he explains, may represent tackling a stretch assignment on a project for the credit union, leading a smaller group project or chairing a committee for some task. These types of projects are not only an opportunity for leaders to demonstrate their abilities, but also provides “an opportunity to learn more about where their shortcomings are, and then to be coached by somebody who’s more seasoned,” he says.

To help credit union leaders develop the competencies they need, Dickey says, “you must first identify the goals you want to achieve—lower turnover, higher engagement, more production, better service levels?” It’s imperative “to align what your members, your employees and the credit union expect from the organization.” Then, she says, it’s important to “evaluate individual strengths and identify personalized areas for opportunity and growth.”

This evaluation can be done internally or with the assistance of an outside consultant, Webb suggests.

While the board is responsible for ensuring credit union CEOs have the leadership competencies required to achieve CU objectives and may provide input to the CEO on desired leadership succession qualities, the CEO and leadership team will be responsible for development of other employees, Stevenson says. Once the leadership team determines the skills and core competencies that are required from their high-potential employees and outlines those priorities, the supervisors of those employees should develop individual talent development plans. 

Training and development needs will vary based on the existing competencies, skills and experiences that individual employees have, Stevenson points out.

“You may find that somebody in your succession pipeline already has pretty strong management skills, for example,” he says. “Maybe there’s somebody who has been on a merger team or who has worked through a core conversion or something like that, but they may need some additional work in strategy.” Development plans should be tailored to individuals, and their direct supervisors should regularly have conversations with them about how progress is coming along toward achieving that plan. 

The HR and talent development team, Stevenson says, will play a role in checking in on a regular basis with supervisors to make sure that, as an organization, everybody is making the progress that needs to be made.

In this environment of change and shifting expectations for leaders, Webb says it’s important to be patient. “The process of changing competencies takes some time. It takes education and some trial and error. The most important thing in this process is creating psychological safety that allows these folks to develop new competencies and not be so concerned when they get it wrong.” 

Wanted: A New Kind of Credit Union Leadership

Another critical point? As Marshall Goldsmith proclaimed back in 2008: “What got you here, won’t get you there.”  

Stevenson notes that many credit unions today are growing rapidly—and that growth requires different leadership. As credit unions grow through mergers and organically, their people strategies will change. He suggests having standing planning sessions focused on people strategy so the need for change isn’t overlooked and so credit unions are constantly assessing, developing and positioning their leadership team for success in a rapidly changing environment. 

“Many times, credit unions’ people strategies lag behind their actual asset growth and the number of employees they have,” Stevenson says. CU leaders need to make sure that they’re regularly—at least on an annual basis—talking about their people strategy.  cues icon 

Lin Grensing-Pophal, SPHR, is a writer and human resource management and marketing communication consultant in Chippewa Falls, Wisconsin. She is the author of The Everything Guide to Customer Engagement (Adams Media, 2014) and Human Resource Essentials (SHRM, 2010).

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