SAN DIEGO–When it comes to where credit union boards are focusing their attention, the fixation shouldn’t be profitability but, instead, performance, according to one expert, who says that many boards are often surprised at how their own CU is really performing, often as the result of having laid a “trap for themselves.”
As part of the CU Daily’s Profitability Imperative series in 2026, Peter Myers, senior vice president with DDJ Myers, which provides numerous consulting services to credit unions, including what around what it describes as “specific observable outcomes,” offered insights into what he has been experiencing in his work with credit union boards, where misconceptions often occur and what can be done to improve.
Below he respond to questions posed by the CU Daily:
The CU Daily: How often does the issue of profitability come up with DDJ Myers clients? Is it discussed directly, or is it more of an indirect issue? What’s the experience been?
Myers: We have to kind of define profitability. I might say performance is a better word that we use because, in simple terms, we’re investing for the future, so therefore we’re OK with slimmer margins or whatever. But performance is in almost every single conversation with boards, CEOs, executive teams and nimble talent. It’s always there.
Part of what we’re up to is trying to help organizations better understand their performance relative to the strategy and then also within the marketplace.
With the bottom quartile of performing organizations, their boards have no idea that they’re in the bottom quartile. Sometimes I’ll show (the data) to them and they’re like, “Wow, I had no idea.” It’s like, you should. So, what is the governance pattern that needs to be constructed, amended or rebuilt so that you know the competitive position of the organization?
The CU Daily: Profitability is easy to define because you can go right to the ledger and see if you’re profitable. Performance is a little bit more abstract. How do you define that?
Myers: Let’s look at an organization (Myer shared a CU’s performance data on the DDJ Myers’ dashboard.) I picked this credit union at random. I like to look at performance over time like this. When you look at these kinds of organizations, and I show this to boards, a lot of times they have no idea that this has been their performance.
Then we have another dashboard we can pull up that lets us look at competitive positioning. It’s not a criticism, just statistically factual, that this credit union is in the 10th percentile of their peer group for net worth. But when we look at their asset growth comparatively, maybe they are shrinking because of the net worth and they are trying to build that up.
When we look at ROA, we see there’s a little bit of an earnings challenge there compared to the other groups. They’ve got better-than-average yield on loans. Maybe this is a long-term play and they’re working through some of the investments they’ve made, etc.
So, this is how we’re trying to help boards go in and understand this.
A board called us in to talk about performance. I met with the board chair and showed him they were performing at about the median with asset growth. He said they didn’t know it was so low. What the CEO was telling the board was not technically wrong. Maybe this board really likes a high net worth ratio.
On ROA, they were below the 10th percentile for a year, and this is when the CEO is telling the board everyone is experiencing these same results. I pull up our dashboard and I show them this, and the board chair said to me, “I don’t think we’re performing financially.”
I pulled them up and we looked at the peer group and all this kind of stuff, and I go, literally no one is performing that bad. Literally no one.
They didn’t know what they wanted to do, and so I said, “How about this? Rather than me selling you an evaluation tool, how about we do a strategic competitive positioning assessment to look at organizational performance, operational performance, financial performance and board governance?”
At the end, we told the board and we showed them all this data and we said, “You’re in the bottom 10% in some of these metrics.” We said to them, “You’re culpable. You know where you’re at.”
I was with regulators (earlier in the week). They hired us to teach them about strategy. They said, “What is your assessment of the landscape?” and I said, honestly, I think more CEOs should be fired for performance.
What the credit union ended up doing is they fired the CEO, and it was really hard, really hard for them.
This is why I ask, “How has your organization performed?”
The CU Daily: How do you factor into that the abstract notion of credit union mission? There are some credit unions, for example, that deliberately keep capital low. How does that fit?
Myers: There are four-something-thousand credit unions out there and they all run a little bit differently, and I think that’s really great.
What I think is important is that one board has the permission to not have a universal adoption of what’s important. I think everyone can make a philosophical argument however they want. The cool thing about it is I don’t have to agree with your philosophy as a credit union. Everyone can disagree, and the members elect that particular board.
But if they don’t have a strong rationale behind having 20% capital or whatever, I think that’s a miss. If they’re riding 7% and they don’t know there are some implications out there, they’re going to start with the consequences. They have to have a strategic understanding of it.
That’s why I ask, “How sophisticated is your process of translating priorities into actionable measurements?”
Meaning that some of those organizations I’ve worked with want to reserve as much as possible and still grow so that no matter what is happening out there, they want to be the strongest industry, they want to be able to take over a billion-dollar credit union in a merger.
THE CU Daily: Kudos to the credit union board chair you mentioned earlier who said, “We want to know about our financial performance.” But it seems there is a Catch-22 here. How does a board know what it doesn’t know? It takes some courage. How do they reach out to DDJ Myers if they don’t know?
Myers: I think one of the things that’s really important is getting educated.
An independent board is maybe not the way you’re thinking about it. They only trust themselves. They don’t seek outside knowledge. They think they’re the most important people in the world. They don’t go to industry conferences. They don’t read the CU Daily.
They kind of lay a trap for themselves unintentionally. They have a blind spot.
I think we’re smarter when we build off each other, when we network, when we leverage each other. “Oh, that’s an interesting philosophy. I’ve never thought about that. We have a different philosophy.”
Then we kind of stress-test those.
I think you’ve just got to read the articles out there. It’s about the process of learning.
THE CU Daily: DDJ Myers has talked about its own continual learning. What advice do you have for a smaller or mid-size credit union to learn when they don’t have the resources and tools available to them?
Myers: One of the things we help leaders do is reveal how they spend their time and the impact of that strategically, tactically and culturally.
How much time am I spending in my emails versus how much time am I building the business? It’s the old adage of working in the business versus working on the business. How do I separate and distinguish those times? Because I have to invest a certain amount of time working on the business, and inevitably that’s going to reveal for me my lack of skill sets.
Inevitably, it’s going to reveal blind spots. Inevitably, it’s going to point me to research that I haven’t yet touched that could and should make me smarter.
There’s a thousand books out there. We just have to prioritize: How do I get better? How do I work on the business? How do we even talk about growth?
THE CU Daily: Some CEOs have said they don’t talk about growth. They talk about strategy first and growth is a byproduct.
Myers: For some organizations it means membership growth. For some organizations it means building out the infrastructure. So, we have to define that.
Now, you always hear growth for the sake of growth is bad, etcetera, and it’s probably mostly true. I think there’s an argument to say no growth actually positions me for the future, for performance, better scaling and all that kind of stuff.
One of the things that we help boards and CEOs and executive teams do is get aligned on what is performance for us and how should we perform in the future. What’s it going to take for that?
I just wrote an article about the evolving role of boards and strategic planning, and one of the things I talk about is—and I’ve heard this so many times—is, “We want to be $5 billion in assets in five years,” or, “We want to be $10 billion in assets in 10 years.”
It’s a catchy phrase, and I think there’s power in phrases because it makes for memorable, bite-size things that the masses can interpret and activate.
However, I think too often what happens is people think that’s the strategy. No, that’s an outcome.
There are billion-dollar organizations out there literally not crushing it performance-wise. So, we have to think about, well, what do you really want? Do you want to be a lean, mean billion-dollar machine, or do we want to be a mediocre-run $2 billion institution?
It’s not for me to decide this. We’re not the board.
The CU Daily: How is artificial intelligence affecting your work, and what do you advise credit unions?
Myers: I’ve heard and seen and witnessed a lot of executive teams, and mostly what they’re saying is they are figuring it out. They haven’t dialed it in yet, and the proof of concept is still pretty raw or it’s limited or it’s myopic.
What I do know, though, is that in the credit union industry the threat of replacing a person’s job with AI is not quite here yet. I haven’t seen anyone make cuts.
I had one memorable talent leader who has been slow in rolling out the adoption of AI, and I asked why. He said it was because he was worried it would take his job.
I think that there are going to be job cuts. That’s not an “if”; it’s just when we do it inside credit unions.
What I think is the opportunity is to ask: How can I create new value leveraging AI in a way that I haven’t yet done? Let’s empower our team to kind of figure out the use cases, the millions of use cases, so that we can do more work.
The CU Daily: For a board that’s looking to examine performance, or for a management team looking to examine performance, what kind of time frame should they be looking at? Three years? Five years?
Myers: One of the things we help boards and CEOs do is ask, “What is your strategy? How far out are you declaring and framing it? What are the milestones for it? How do we know when we’re off track?”
What I think is the most pragmatic—and I think that’s kind of the highlight word, pragmatic—is to look in one-year intervals framed against several years, because what happens is if we put three-year or five-year targets out there, the landscape changes.
We were in growth mode, but now we’re in retention-of-capital mode because of what happened to interest rates.
It’s got to be nimbly flexed, so the more agile and purposeful we are in the near term, but framed against a longer-term objective, I think that’s the easiest, best, most useful way to do it.
Because inevitably those long-term goals end up shifting. When we set those parameters, we have to have a holistic view to make sure we have the right economic engine as opposed to just a single dollar-figure outcome.
THE CU DAILY: how often does the issue of profitability come up with DDJ Myers clients or is it discussed or is it more of an indirect issue what’s the experience been
Myers: so it’s we have to kind of define profitability I might say performance is like a better word that that we used because of the simple terms like we’re investing for the future so therefore we we’re OK with slimmer margins or whatever but performance is in almost every single conversation boards CEOs executive teams and nimble talent it’s always there part of what we’re up to is trying to help better understand their performance relative to the strategy and then also within the marketplace.
With the bottom quartile of performing organizations their boards have no idea that they’re in the bottom quartile and so you know sometimes I’ll show this to them and they’re like wow I had no idea and it’s like that you should. So, what is the governance pattern that needs to be constructed, amended, rebuilt so that you know the competitive position of the organization.
THE CU DAILY: Profitability is easy to define because you can go right to the Ledger and see if you’re profitable. Performance is a little bit more abstract. How do you define that?
Myers: Let’s look at an organization I will share here on a dashboards. I picked this credit union at random. I like to look at performance over time like this and so when you look at these kinds of organizations and I show this to boards, a lot of times they have no idea that this is what has been their performance. Then we have another dashboard we can pull up that lets us look at competitive positioning…It’s not a criticism, just statistically factual, that this credit union is in the 10th percentile of their peer group for net worth. But when we look at their asset growth comparatively, and maybe they are shrinking because of the net worth and they are trying to build that up. When we look at ROA we see there’s a little bit of an earnings challenge there compared to the other groups. They’ve got better than average yield on loans. Maybe this is a long term play and they’re working through some of the investments they’ve made etc.
So, this is s how we’re trying to help boards go in and understand this.
A board called us in to talk about performance. I met with the board chair and showed him they were performing at about the median with asset growth. He said they didn’t know it was so low. What the CEO was telling the board was not technically wrong—maybe this board really likes a high net worth ratio. On ROA they were below the 10th percentile for a year and this is this is when the CEO is telling the board everyone is experiencing these same results. I pull up our dashboard and I show them this and the board chair said to me I don’t think we’re performing financially. I pulled them up and I go like this and we look at the peer group here and all this kind of stuff and I go literally no one is performing that bad. Literally, no one. ..They didn’t know what they wanted to do and so I said how about this, rather than me selling you an evaluation tool, how about we do a strategic competitive positioning assessment to look at organizational performance operational performance financial performance board governance. At the end we told the board and we showed them all this data and we said you’re in the bottom 10% in some of these metrics and they had no idea. We said to them, you’re culpable. You know where you’re at.
I was with regulators on Tuesday they hired us to teach them about strategy. They said, what is your assessment of the landscape, and I said, honestly, I think more CEO should be fired for performance.
What (the credit union) ended up doing is they fired the CEO and it was really hard really hard for them.
This is why I ask, how has your organization performed?
THE CU DAILY: How do you factor into that the abstract notion of credit union mission? There are some credit unions, for examples, that deliberately keep capital low. How does that fit?
Myers: There are four-something thousand credit unions out there and they all run a little bit differently and I think that’s really great. What I think is important to one board is they have the permission to not have a universal adoption of what’s important…I think everyone can make a philosophical argument however they want. The cool thing about it is I don’t have to agree with your philosophy as a credit union. Everyone can disagree and the members elect that particular board. But if they don’t have a strong rationale behind having 20% or whatever capital, I think that’s a miss. If they’re riding 7% and they don’t know that that’s there’s some implications out there. They’re going to start with the consequences. They have to have a strategic understanding of it. That’s why I ask, ‘How sophisticated is your process of translating priorities into actionable measurements?’ Meaning that some of those organizations which I’ve worked want to reserve as much as we possible and still grow so that no matter what is happening out there, because we want to be the strongest industry. We want to be able to do it take over a billion dollar CU in a merger.
THE CU DAILY: Kudos to the credit union board chair you mentioned earlier who said we want to know about our financial performance. But it seems there is a Catch 22 here; how does a board know what it doesn’t know? It takes some courage and how do they reach out to DJ Myers if they don’t know.
Myers: I think one of the things that’s really important is getting educated anyone. An independent board is maybe not the way you’re thinking about it. They only trust themselves; they don’t seek outside knowledge. They think that they’re the most important people in the world. They don’t go to industry conferences; they don’t read the CU Daily. They kind of lay a trap for themselves unintentionally. They have a blind spot.
I think we’re smarter when we build off each other, when we network, when we leverage each other. ‘Oh, that’s an interesting philosophy ;I’ve never ever thought about that. We have a different philosophy.’ And so, then we kind of stress-test those. I think you’ve just got to read the articles out there. It’s about the process of learning.
THE CU DAILY: DJ Myers has talked about its own continual learning. What advice do you have for a smaller or mid-size credit union to learn when they don’t have the resources and tools available to them?
Myers: One of the things we help leaders do is reveal how they spend their time and the impact of that strategically, tactically and culturally. How much time am I spending in my emails versus how much time am I building the business? It’s the old adage of working in the business vs. working on the business. How do I separate and distinguish those times, because I have to invest a certain amount of time working on the business and inevitably that’s going to reveal for me my lack of skill sets. Inevitably , it’s going to reveal blind spots. Inevitably, it’s going to point me to research that I haven’t yet touched. That could and should make me smarter…There’s a thousand books out there; we just have to prioritize how do I get better, how do I work on the business, and even talk about growth?
THE CU DAILY: Some CEOs have said they don’t talk about growth. They talk about strategy first and the growth is a byproduct.
Myers: For some organizations it means membership growth. For some organizations it means building out the infrastructure. So, we have to define that. Now, you always hear growth for the sake of growth is bad etcetera and it’s probably mostly true. I think there’s an argument to say no growth actually positions me for the future for performance, better scaling and all that kind of stuff.
One of the things that we help boards and CEO’s and executive teams do is to get aligned on what is performance for us and how should we perform in the future? What’s it going to take for that. I just wrote an article about the evolving role of boards and strategic planning and one of the things I talk about is, and I’ve heard this so many times, is we want to be $5 billion in assets in five years or we want to be $10 billion in assets in 10 years. It’s a catchy phrase and I think there’s power in phrases as it makes for memorable bite-size things that the masses can interpret and activate. However, I think too often what happens is people think that’s the strategy. No, that’s an outcome and there’s billion-dollar organizations out there literally not crushing it performance wise. So, we have to think about, well, what do you really want? Do you want to be a lean, mean billion-dollar machine, or do we want to be a mediocre run $2 billion institution.
It’s not for me to decide this. We’re not the board.
THE CU DAILY: How is artificial intelligence affecting your and what do you advise credit unions ?
Myers: I’ve heard and seen and witnessed a lot of executive teams and mostly what they’re saying is they are figuring it out. They haven’t dialed it in yet and the proof of concept is still pretty raw or it’s limited or it’s myopic. What I do know though is that in the credit union industry the threat of replacing a person’s job with AI is not quite here yet. I haven’t seen anyone make cuts. I had one memorable talent leader who wants has been slow in rolling out the adoption of AI, and asked why, and he said it was because he was worried it will take his job…I think that there are going to be job cuts; that’s not an if it’s just when we do it inside credit unions. What I think is the opportunity is to ask; how can I create new value leveraging AI in a way that I haven’t yet done? Let’s empower our team to kind of figure out the use cases, the millions of use cases, so that we can do more work.
THE CU DAILY: For a board that’s looking to examine performance, for a management team looking to examine performance, what kind of time frame should they be looking at? Three years? Five years?
Myers: One of the things we help boards and CEOs do is ask, ‘What is your strategy? How far out are you declaring and framing it? What are the milestones for it? How do we know when we’re off track.
What I think the most pragmatic and I think that’s the kind of the highlight word—pragmatic–is to look in one year intervals framed against several years, because what happens is if we put three year or five year targets out there, the landscape changes. We were in growth mode but now we’re in retention of capital mode because of what happened to interest rates. It’s got to be nimbly flexed so the more agile, purposeful we are in in the near term but framed against a longer term objective.
I think that’s the easiest, best, most useful way to do it, because inevitably those long term goals end up shifting. When we set those parameters we have to have a holistic view to make sure we have the right economic engine as opposed to just a single dollar figure outcome.
