ATLANTA —Credit unions seeking to improve and grow have overlooked opportunities in brand awareness, risk appetite solution and talent, according to one person, who further advised it is critical to make it “more enticing to invest in credit unions than to extract from them.”
And when it comes to that latter point, the only way to build that culture is through incentivization and goal alignment at the board and senior management level, according to Ancin Cooley, whose insights are being shared here as part of the CU Daily’s “The Profitability Imperative: the Sustainability Reset—Mission Requires Margin” series.
Cooley is the founder of CUCommunities.org and principal of Synergy Credit Union Consulting. As the CU Daily reported here, CUCommunities.org is a subscription-based online learning and mentoring platform for credit union professionals and volunteers that has the “bold goal of becoming the most affordable, practitioner-led support ecosystem in the credit union industry.”
According to Cooley, CU Communities is seeking to fill a gap in credit unions and to provide practical, consistent, and role-specific learning — “all offered at a price that an individual can afford and an institution can supplement.”
Below, Cooley shares his viewpoint with the CU Daily on a number of topics, primarily related to growth.
The CU Daily: First, some background. Tell us more about the work you are doing with credit unions?
Cooley: We are the place where strategy and execution intersect. When a credit union is looking to develop a sustainable strategy and execute it, you come to us. When you want to grow fast but want to ensure you have robust risk management processes, you come to us. When you want an independent internal audit of key areas to get feedback on how to improve, you come to us. Lastly, we provide education solutions for boards, committees, and executives focused on actionable tactics and real-world application.
The CU Daily: Where do you find credit unions most want to improve?
Cooley: Where credit unions want to improve is often in some vendor or some shiny new technological solution. They think it will be the thing that fixes it, whether it is AI, a digital experience, or some new platform. I completely understand the sentiment. Those are tools that enhance a well-laid-out strategy. They do not replace one.
The CU Daily: Where do you find they have the most opportunity to improve, but are often unaware of it?
Cooley: Where credit unions often have the most opportunity to improve, but are unaware, is brand awareness, risk appetite selection, and talent risk. There is significant anxiety around technology and economies of scale. One of the most valuable investments a credit union can make is in its brand, because how you communicate it flows through everything else you do. Strong brand equity makes everything else easier. Think Trader Joe’s, Costco, and Buc-ee’s.
Second is risk appetite, both for the loan and investment portfolios. A lot of credit unions have very vanilla investment portfolios. It would not take much for many of them to pick up an extra 15 to 20 basis points without overly exposing themselves. That helps fund what they need within the organization.
On the lending side, risk appetite means understanding portfolio pricing and portfolio risk management. Your marketing dollar goes further when you lend deeper, if you do it intentionally and manage the risk.
Mission-Critical Areas
Lastly, talent risk management in mission-critical areas. Talent risk management begins with an organization’s ability to be honest and reflective about its current talent gaps and its future needs. If a credit union cannot do that, it will continue to make bad hires, deliver the wrong people, or get subpar outcomes relative to leadership expectations.
Here are a couple of things I’ve directly observed:
- Institutions hire for “fit” and “feel,” to the chagrin of whether the person can actually do the job.
- In the interview process, leaders are often hesitant to ask the questions needed to confirm that the candidate has the requisite skills. Sometimes the interviewer lacks the subject-matter expertise to ask pointed questions. Either way, the result is predictable. The credit union is back in the hiring process in 90 days.
- If you are going to hire a quarterback or a wide receiver, you check their actual performance over the last two to three years. You confirm they were successful in an offense similar to yours. Credit unions rarely do that level of diligence when hiring CEOs and senior managers. They do not do a deep dive into actual performance. They do not ask pointed questions about outcomes at prior institutions. They hire on polish, fit, and narrative.
And do not let a high-priced recruiter tell you what you can and cannot ask in an interview. You are hiring for a mission-critical role. You are allowed to validate capability.
The CU Daily: Can you share examples of changes credit unions have made that directly translated into the bottom line, regardless of the size of the change?
Cooley: I can share a mindset that consistently translates to the bottom line. The strongest improvements happen when leaders invite independent voices into the room; people who have options and do not need the engagement to survive.
Credit union leadership can become an echo chamber. If you want to improve, put yourself in front of people who will tell you what you need to hear, even when you disagree, and who can give you real options.
The CU Daily: Is there an expense you have found that at many credit unions can be eliminated but is often overlooked?
Expense cutting is easy in a narrow sense. Anyone with a degree can walk in, fire people, and find cheaper vendors. Can you formulate and execute a coherent strategy?
The CU Daily: Similarly, is there an overlooked income opportunity at many credit unions?
Cooley: There is typically a segment of membership, a demographic, or an age group, that is underserved. Either inside the existing membership or in the community. They are yearning to be seen. They are seeking a financial relationship with an institution.
The CU Daily: Do you have any other lessons learned/insights gained from experience that you might share?
Cooley: Pay people for performance in a way that aligns with your mission, strategy, and risk appetite.
The CU Daily: Finally, away from the spreadsheets and Excel, where are the deficiencies in culture to promote sustainability and growth, and how can a credit union build that culture?
Cooley: As an industry, we must make it more enticing to invest in credit unions than to extract from them. The only way to build that culture is through incentivization and goal alignment at the board and senior management level.
We must make it in managers’ best interests to do right by their credit unions at every phase of their careers. If a bright, young 34-year-old takes the job as a credit union CEO and, over their career, their decision creates more capital, they deserve a share.
In addition to the links above, Ancin Colley can be found on YouTube here and can be reached at [email protected].
