Top-Level Takeaways
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Managing technology begins with strategy and peaks with in-house tactician partnerships.
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Rather than go it alone, CEOs can tap into multiple networking opportunities, formal and informal.
Robust technology is no longer a luxury for a credit union that intends to survive, much less thrive. Managing that part of the enterprise can be daunting to a chief executive, but that doesn’ t have to be the case. In the credit union space, collaboration is second nature and networking opportunities abound.
Collaboration takes place informally and in formal settings year-round the latter in the form of industry and trade group conferences, roundtables, and vendor user groups and meetings.
Three participants from a CEO panel discussion during Symitar s annual user conference this year sat down recently with CreditUnions.com to talk more in depth about how they manage their relationship with their chief technologists and with technology in general.
Here are highlights from the hour-long conversation with April Clobes of Michigan State University FCU ($4.5B, East Lansing, MI), Rudy Pereira of Premier America Credit Union ($2.8B, Chatsworth, CA), and Mike Valentine of BCU ($3.7B, Vernon Hills, IL).
Managing Technologists And Technology
CU QUICK FACTS
MSUFCU
Data as of 09.30.19
HQ: East Lansing, MI
ASSETS: $4.5B
MEMBERS: 284,979
BRANCHES: 17
12-MO SHARE GROWTH: 10.8%
12-MO LOAN GROWTH: 13.1%
ROA: 0.96%
Clobes meets weekly with her technology leaders for updates on future plans and current status. She acknowledges strategy is important, but so is the day-to-day.
IT provides the skeletal structure the whole organization depends on, the MSUFCU chief executive says. After all, if home banking goes down, that makes for a long day at the call center.
At these three billion-dollar credit unions, however, the CEO relationship with technology tends to be more strategic than tactical. Guiding these relationships begins with knowing enough about the tools to lead the discussion, or follow along, and then having the right people in place to make it all work. A strong partnership with the chief technologist is particularly crucial.
In BCU s case, Valentine has longtime credit union technology leader Jeff Johnson in place as his CIO.
Jeff does a good job getting me to the right place with the right knowledge so I can stay big picture yet still be helpful in moving resources to the right place to accomplish what needs to be done, Valentine says.
Clobes agrees there is a baseline familiarly with technology that a successful CEO must have and echoes the importance of having a good CIO by your side.
April Clobes, President and CEO, MSUFCU
I ve directly managed IT in web and mobile development areas, so I have just enough knowledge to be dangerous to my CIO [Samantha Amburgey], Clobes says. She and I have worked together for more than 10 years, and we have a great working relationship.
Pereira, meanwhile, spent many years as a chief technologist at large credit unions before moving into the CEO role. That s given him an appreciation for what the CIO faces and what the CIO does, but he s learned to let go when necessary.
He bounces things off me, and I provide my thoughts, but ultimately it s his decision which way we re going to go, Pereira says of his senior vice president of technology, Janaki Rao. That s based on mutual respect and working toward what s best for the organization.
Indeed, seeing the big picture and translating that into strategy that serves business and member needs alike is a big part of the CEO s role. Then, it comes down to having the right people in place and managing them well.
You have to build a great team, Clobes says. And you have to be able to trust them.
What CEOs Need To Know And What They Don t
CU QUICK FACTS
BCU
Data as of 09.30.19
HQ: Vernon Hills, IL
ASSETS: $3.7B
MEMBERS: 264,996
BRANCHES: 49
12-MO SHARE GROWTH: 9.9%
12-MO LOAN GROWTH: 10.6%
ROA: 1.11%
It s not unusual for a CEO to have a technology background, especially at smaller shops where leaders where many hats. Still, it s not typical, nor is it required, to successfully manage the digital revolution that s swept from the back office to the front line.
You don t need to know the technology, but I don t think you should be afraid of it You need to understand the changes, says Clobes, who took the helm at MSUFCU in 2015 after starting her career there in 1996 as a marketing specialist and moving up through senior marketing and e-commerce roles to chief operating officer and executive vice president. I stay aware of what s going on in technology because it s such a driving force in our business, but I don t need to know how every process gets implemented. I trust and verify.
For example, the MSUFCU chief executive says, she might not know the granular details of cloud computing, but she understands the impact of moving servers off the premises. Then there s the explosion of digital demands and the ways the credit union can meet them. So many channels to fill and so many ways to fill them, with new players emerging regularly.
That pace of change itself can be a distraction, notes Valentine at BCU.
Mike Valentine, President and CEO, BCU
It s the fastest I ve seen in 25 years as CEO, he says. I keep track of what I can, like what the fintechs are doing, but there s so much happening that it can be a challenge to really understand the new technologies that are coming out and what really matters.
Indeed, attaining that understanding takes time and effort.
There are a lot of times, quite honestly, when I ll throw may hands up and say, I don t get this at all. Walk me through it, Valentine says.
The BCU CEO also says he has an extensive network of confidants, mentors, and peers outside his shop as well as internally to bounce things off of.
It s easy and tempting to chase new technologies, Valentine says. These are the people you trust to not run you down the rat holes.
Prioritizing And Measuring Progress
CU QUICK FACTS
Premier America Credit Union
Data as of 09.30.19
HQ: Chatsworth, CA
ASSETS: $2.8B
MEMBERS: 115,557
BRANCHES: 20
12-MO SHARE GROWTH: 11.6%
12-MO LOAN GROWTH: 7.3%
ROA: 0.84%
My role as the CEO is to provide people the resources they need to achieve our vision, Clobes says. My goal is to have a good understanding of what they need to do that job well.
Role and goal come together in the form of leading the creation of IT strategy and then letting a trusted team execute on those plans. At BCU, that begins at the top by defining broad objectives.
Valentine says his board first looks at big pillars relationships with their SEGs, operational efficiency, member experience, and member well-being, for example.
Then, we decide how we re going to weight these, Valentine says. It could be, say, 20% to relationships, 15% to efficiency, 30% to member experience, and so on.
After that, it s up to Valentine s management team to decide how to put tactics to strategy and then to his senior technology leaders to guide the decisions on what investments and improvements the credit union needs to put those notions into motion.
Complicating matters is the fact priorities change from year to year. For example, last year BCU noted friction in the member account opening experience that it needed to address.
We over-weighted that, Valentine says. This year, we re trying to put more into financial well-being and education. It s an ongoing discussion, really, and one that starts with our board.
There s also never a shortage of ideas. It s winnowing then down that s the real trick.
We might start with a list of 40, but we re never going to get 40 done, says Pereira at Premier America. So, we narrow it to 20 with the goal to get to 10. That s when it gets really tough. Over time, I ve grown to appreciate how difficult it can be to do fewer things.
Rudy Pereira, President and CEO, Premier America Credit Union
At Premier America, the winning strategies and financial commitments go to those that credit union leaders determine will have the most impact.
We talk about ourselves like a startup company, Pereira says. But we don t have startup money. We have to choose carefully.
After that, demonstrating impact becomes a strategy unto itself when it comes to justifying those commitments.
Metrics are important because they communicate that we are making progress, Pereira says, but he cautions that precision can be elusive.
There are some things that are simply hard to pin an ROI on, he says. Like online banking. We ve all implemented it. It s table stakes. The things you want to do now are impossible without it.
Leveraging Collaboration
Leaders in the credit union space have long touted their willingness to cooperate, to attain the benefits of scale and to draw from one other s experiences. CUSOs and other joint ventures are one example, of course. So are the user groups maintained by core and card processors as well as the hundreds of participants in each of the CUNA councils.
That level of cooperation and networking is one of the more critical aspects of our industry, says Valentine at BCU. It s something I value. Credit unions are the most outgoing, and non-competitive, group that I ve ever seen in any industry.
The BCU chief executive sees that attitude continuing even as credit unions increasingly bump into one other s markets through FOM expansion and organic growth. He points to his own Chicagoland shop as an example.
Leverage Your Purpose For Greater Impact
Learn more about our next cohort of Sustainable Business Strategy with Rebecca Henderson, in collaboration with Harvard Business School online. The Callahan Academy combines Harvard teachings and credit union industry discussions to explore:
- Business models that drive change.
- Tactics that demonstrate the competitive advantages of being a purpose-driven firm.
- Why collective efforts are important and how business can be a catalyst for system-level change.
- What you can do to become a purpose-driven leader and how you can develop purpose-driven leaders within you organization.
It s not like I m competing with April or Rudy, or even credit unions just down the street from me, like Alliant, Valentine says. Sure, we probably have some of the same members, but I don t see them as competitors. That would be Chase, B of A, people like that.
Such networking is hardwired at MSUFCU, too. Managers from the world s largest university-sponsored credit union participate in supplier user groups, roundtables from Callahan & Associates, and other industry events and councils.
The Great Lakes State credit union even takes cooperation a bit further. Its leadership team takes day trips to other credit unions once or twice a year and reciprocates by hosting them.
I partner with their CEO, our CIOs partner, and so on, Clobes says. We learn from each other and we strengthen our connections. We have too many other people to compete with fintechs, big banks, community banks not to take advantage of what we can learn from each other.
That resonates with Valentine.
People are foolish if they don t take advantage of that, the BCU chief executive says. To think we can do things on our own is nuts. Why try to reinvent the wheel when you have a good group you can talk to?
