Organizational Development: Overlooked but Essential to Our Future

As credit unions like GTE FCU grow, says Bucky Sebastian, organizational development is increasingly essential because it is a credit union’s team and its culture that so often set it apart.


Turnover of staff is a problem all credit unions face. It’s especially troublesome in areas of the country where unemployment is low. Employees leave, taking a host of knowledge with them. Then it costs money to solicit, hire and train new people to the culture of your credit union.

Most credit union managers would say that their best competitive advantage is their employees: the people they have in place who are trained and who make the culture that keeps the organization gaining in a competitive world. So it is especially troubling when a part of the team leaves.

Many managers shrug their shoulders, rationalizing to themselves that turnover is endemic, something that has to be endured.

At GTE FCU, we weren’t so sure. A couple of years ago, we hired a consultant in organizational development to examine areas of our credit union, including the problem of turnover. We conducted employee surveys, and the consultant went to work on specific areas and units of the credit union. He made good progress, and he also offered suggestions on a macro level. We could soon see that we needed this kind of contribution more than sporadically. We hired the man full-time and we gave him a position among the senior management. His role is organizational development.

Growth Affects Culture as Well as Numbers

As credit unions grow, they do so in more ways than numbers of employees and figures on the balance sheet. They grow in complexity. If you plan to grow by 50% you can’t just add 50% more employees. With growth not only comes more interfaces with members and more employees, but also different ways of making decisions and different levels of management. In a word, there is a need for more sophistication. More sophistication is needed from employees and for employees.

Put another way, with growth come subtle shifts in the organizational culture, which nurtures the team that is so vital to so many credit unions’ advantage. These shifts are critical. Done poorly, they can devastate a credit union; done well, they can invigorate one to new heights.

A Change in Mindset

Credit unions do not particularly value organizational development, at least not as large corporations do. Credit unions know they need a lending department, up-to-date IT, a marketing function and so on, but they do not well understand organizational development or give it proper attention. Maybe this has to do with the fact that credit unions began small and had a way of dealing with their employees that was friendly and familiar. Growth was a matter of numbers and the balance sheet, and it was thought the staff could always make do. Non-numerical adjustment was less obvious and so got short shrift.

We can’t remain in that mindset, or if we do, we’ll always be reacting to trouble rather than avoiding it. Nor can we bundle the issues and lay them at the feet of Human Resources. This is not strictly an HR function. Rather, HR is a factor of organizational development.

Seeing Them Whole

Growing larger is always going to have its growing pains. Indeed, business models predict identifiable inflection points along a growth curve (old levels of management have to change, new expertise is needed, etc.) with their attendant troubles. When small, credit unions work these out on a personal level, but large they are going to be blindsided with agonies if they are not proactive.

Your team and your culture are your advantage in a competitive marketplace. Don’t take them for granted. You have to see them whole and pay attention to how they are going to develop over time. At GTE FCU, we are attempting to do so by focusing on organizational development at our highest level. All growing credit unions could benefit by the same endeavor.

To read more articles from industry experts Chip Filson, Bucky Sebastian, Ed Callahan, and more, subscribe to The Callahan Report.




June 12, 2006


  • We are going through this same 'growing pain' now - the way the middle management is or isn
    Amy Spinelli
  • As an OD professional, there is nothing new or innovative in this article. But it is nice to see that at least one CU understands it
  • Good article on a theme often overlooked. As CU organizations grow, "growing pains" can also relate to the difficulties experienced staff have in adapting to new expectations in an altered culture. To the extent that you can match them in a proactive manner with the new organizational needs you stand a better chance of retaining the expertise and keeping them happy. It is not easy for steady competent managers immersed in their jobs to see the big organizational picture the way execs do so why not make it a point to spend a few minutes with them on career pathing in the changing CU.
    Michael Palladino
  • Not for printing, but this article is too vague and high-level. Would have been more interesting to hear a specific example of a recommendation made by the org dev consultant, how the CU implemented and what the results have been. Basically all it says is that growth requires new organizational approaches but doesn't give any real meat.
  • It would have been more helpful to have some information on what kinds of O.D. issues are faced at which points along the growth curve, as well as an indication of how to handle them (or at least some references for further research). Thanks!
    Wendy Danbury