Last month I began a series of articles on

Transcription

1 CEO VELOCITY BY SCOTT MCCLYMONDS The Six Guiding Forces of Credit Union Growth and Success: Part 1 Last month I began a series of articles on leadership systems based on the many leadership discussions I have had with credit union CEOs around America. I referred to the first system as The 8 Pillars of Strategic Alignment, and we examined each of the 8 Pillars in some detail. I started with strategic alignment because aligning a credit union around a particular direction is so important, especially as the financial services industry becomes more dynamic and competitive. It s too hard to be everything to everyone, and The 8 Pillars provides a framework for you and your team to set priorities. As a follow up, this month begins a two part series on what I call The 6 Guiding Forces of Credit Union Growth and Success. You ll see that strategic alignment is one of those guiding forces, but it cannot stand alone. We ll look at Guiding Forces 1-3 this month, and 4-6 next time. You ll notice a review of The 8 Pillars, but also see them in the context of a broader leadership system. The 6 Guiding Forces of Credit Union Growth and Success are: 1. Strategic Alignment Framework Based on Corporate Identity 2. Velocity based on Aligning Leadership, Employees, and Systems 3. Communication, the Glue of Strategic Alignment 4. Selecting Well-Rounded Leaders Builds the Present and the Future 5. Leadership Development Fuels Strategic Momentum 6. Low Operating Expenses Enable Investment and Innovation These guiding forces are universally applicable to any credit union, and the absence of any of them can prevent an organization from becoming all it can be. You may find that you are in sync with these forces, or lacking in some of them. Don t be discouraged if you find some gaps. Simply identify one or two gaps and develop a plan to tackle them. Over time you will find your credit union transforming as the gaps are filled. Let s begin our tour through The 6 Guiding Forces. Guiding Force 1: Building Focus Through Strategic Alignment The first Guiding Force involves creating tight strategic alignment around a very focused strategy. The diagram below reviews The 8 Pillars of Strategic Alignment. As I wrote in my last article on leadership systems, alignment starts with knowing who you are, and who you are not. You cannot be all things to all people, and all the other 7 strategic pillars flow from your identity. Great leaders build their strategies based on their identity, and member needs and experience are assessed and developed within that strategic context. If you consider these 8 Pillars as a process that cycles continually, it is not difficult to imagine significant velocity and momentum building and increasing as your credit union grows in its knowledge of members and how to serve them while holding fast to your identity and focused strategy. 24

2 The 8 Pillars of Strategic Alignment close to the level of strategic alignment I have seen in top credit unions, and they all fell short of what they could have been. What about your organization? Measure Innovate Know Who You Are Strategic Alignment Strategy Member Needs Strategic Alignment Exercises Answer each of the five questions below yourself, then ask your entire board, management team, and a sampling of front line people to do the same exercise. Now compare answers with your board and management team. If the answers are similar, your alignment is probably strong. If the answers vary widely, you have some work to do. Focused Execution Communicate Member Experience Commentary What great credit union leaders achieve with strategic alignment is challenging for any organization. However, there are great perils to not having a high level of strategic alignment. For one, it is impossible to create focus or build momentum if an organization is out of alignment, because out of alignment means out of control. As you can imagine, misalignment can occur in any of the 8 Pillars. Not having clarity on your corporate identity can leave everything else in disarray. A clear identity with an unfocused strategy is no better, and so on. Misalignment causes what I call hidden profitability. This is like earnings available to a company but inaccessible because they are locked in a vault and the door won t open. Strong strategic alignment opens the door and lets the hidden profits accrue to your company. While I have worked for and with large and reputable financial institutions ranging from 5,000 to 50,000 employees, not one of them came remotely 1. Who Are We? What are our strengths? What is our brand? 2. What is our strategy? 3. Who are our members, what are their needs, and how do they rate their experience with us? 4. What positions need to be in place to execute our strategy, and how is the performance of each role measured against strategy? 5. What new ideas, investments, or acquisitions are we considering? How strongly do they correspond to our identity and strategy? Guiding Force 2: Increasing Velocity Guiding Force 2 has to do with creating focused strategic direction and speed that expedites the achievement of your goals. It s what I call creating velocity. To create a high velocity credit union, both speed and direction are essential. Neither velocity nor momentum can occur where one or both ingredients is lacking or hindered. In businesses, direction comes from leadership, and speed comes from employees and systems. Here s how top CEOs align leaders, employees, and systems to execute their strategy and increase velocity and momentum. 25

3 Aligning Leadership, Employees, and Systems to Execute Strategy Leadership managers. Their research says managers account for at least 70% of the variation in employee engagement scores. Guiding Force 2 underscores the importance of trategic alignment between leaders, employees, and systems. The strong alignment between these three creates focused direction, speed, and momentum. To the extent that misalignment is present there will be hidden profitability and a lower probability of achieving your goals. Emlpoyees Strategy Execution Systems Exercises on Creating High Velocity On a scale of 1 to 5, 5 being the highest, have your employees rate their managers in the following categories: Commentary For velocity to occur, a business main components of leadership, employees, and systems need to operate in concert like a symphony. For optimal results the symphony is built around the 8 Pillars, and the musicians operate within that framework. It is a framework that allows each leader and employee to focus on a credit union s identity, strategy, and members, and it pervades every level of the organization. Clarity is the most important aspect of the 8 Pillar framework, and clarity brings high performance at the individual and enterprise level as well as a great experience for members. However, clarity is not common in American business. According to Gallup Research, only 46% of managers and 37% of employees strongly agree with the statement, I know what my company stands for and what makes our brand different from our competitors. For clarity of identity and strategy to result in high performance, it must be translated by managers into required job functions and outcomes. Referencing Gallup again, the number one action a company must take to achieve high performance is hire great 1. How clearly they have communicated expectations for each role. 2. Their explanations of how employee job functions and performance expectations matter to the company and members. 3. How consistently and accurately those expectations have been measured. 4. Whether or not they have provided the tools, systems, and training employees need to do their jobs. 5.How much their managers care about them as people. 6.Availability of professional development opportunities. Guiding Force 3: Communication, the Glue of Strategic Alignment As important as it is for management to have a clear corporate identity and strategy, they can be rendered ineffective without a strong commitment to companywide communication and a corresponding process to ensure its effectiveness. 26

4 Commitment to a strong communication process is the glue that lets leaders achieve strategic alignment. Great CEOs develop communication and feedback loops that make sure everyone is heard and knows the important information. The following diagram shows a communication process used by top CEOs for regularly communicating with all employees, not just direct reports and board members. Processes like these are vital to formulating vision, strategy, and strong strategic alignment. Commentary While the need for a strong communication process seems obvious, it does not always exist; and it takes thought, time, and commitment to develop and maintain. Without it strategic alignment is truly impossible. As I ve mentioned before, misalignment results in hidden, or unrealized profitability, so in diagnosing your own institution for hidden profitability your communication practice is one of their first places to look. Wouldn t it be great to unlock some of that hidden profitability just by developing a better communication process? The Strategic Communication Process Town Hall Mtgs The process used by great credit union leaders is not fancy; just s, town hall meetings, and an open door. There is no great expense involved. Improving your communication process and committing to it can provide no cost profitability increases. The real question is, why don t more companies adopt this model or something similar and commit to it? Why don t more CEOs commit to this level of consistent communication? We hear all the time how important communication is, but how many times do we say we re too busy to commit to the disciplines of regular communication? If we find ourselves saying this it is a sure sign that we don t see the value in it. Communication Exercises 1. Outline your communication process, including feedback loops. Be sure to include direct reports, your board, front line and operations employees, and vendors. 2. How often do you engage each constituency in your communication process, and how do you do it? 3. What forums do you provide for your employees to give you honest feedback, and how do you make them feel safe doing so? 4. Where might you have weak links in your communication process, and how will you fix them? All Empl Weekly s Open Door 5. Have each of your direct reports perform steps 1 and 2 above for their communication process. CEO Sr Ldshp Team Front Line Ldrs Front Line Empl Board 6. Have you matched the performance evaluations of your direct reports with their skillfulness and commitment to communication? If not, why? External Partners 27

5 TAB Summary In our continuing discussion of leadership systems we first defined a system for creating strategic alignment. In this article we have created greater context for strategic alignment by describing a broader leadership system called The 6 Guiding Forces of Credit Union Growth and Success. We acknowledged that strategic alignment is important, but is most effective when supported by 5 other guiding forces of growth and success. This article outlined three of the 6 Guiding Forces: Alignment, Velocity, and Communication; and next month s article will describe Guiding Forces 4-6. Oh, and before you put this article down, don t forget you have some important questions to review with your team to evaluate where you stand in Guiding Forces 1-3. Scott McClymonds of CEO Velocity coaching and consulting specializes in helping credit unions acquire and retain profitable members. His focus on creating value for members helps credit unions stay competitive and relevant while building profitability and brand strength. Subscribers to CU Business can ask Scott questions about how getting to know their members better can generate greater returns. He can be reached at or scottm@ceovelocity.com. Scott McClymonds and CEO Velocity help credit unions acquire and retain profitable members. Using member portfolio management and other advanced strategies, CEO Velocity helps you improve profits while better serving the needs of your members and communities. Do you need to stand out more from your local financial services providers? Would you like to have deeper, more impactful relation ships with your members? Do you need more profitable members? Does your profitability need to increase? Do your have business units or branches that need to improve performance? Do you need to more effectively reach your market? scottm@ceovelocity.com to request a free paper on how to find and close earnings gaps in your credit union. I have worked with hundreds of clients on strategic marketing programs over the last 20 years and Scott McClymonds is at the top of the list. I would highly recommend Scott as a resource to anyone looking to improve their performance Tim Keith, Partner and Chief Strategist, Infusion Marketing Group C R E D I T U N I O N B U S II N E S S JJUULLY Y C U B U S I N E S S. C O M

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