Is your credit union organized for today’s consumers? Credit unions are often “stuck” in an organization chart that reflects the business of the past, not the company of the future. But what needs to change?
Too often the credit union’s org structure is aligned historically based up legacy roles and job descriptions. The problem with this kind of org structure is it doesn’t resonate with the need for cross-functional teams that are required for almost every project or initiative the credit union takes on.
The leadership structue of the past had some or all of the following strategic leaders Chief Executive Officer, Chief Financial Officer, Chief Information Officer/Chief Technology Officer, Chief Operations Officer, Chief Marketing Officer, Chief Lending Officer, and Chief Administration Officer. Except for the CEO, each executive has the responsibility to lead and direct the actions based on a silo.
But, let’s look at how silos and roles have evolved.
The Operations Officer’s work has evolved from managing processes and policies to seeking ways to use technology to streamline the member experience in the branches, to eliminate a lot of the robotic work involved in moving member’s money in and out of the credit union and between accounts.
The Technology Officer’s responsibilities have moved beyond managing the network and telecom infrastructure and installing/integrating new software and network security to anticipating the technology needs of all of the other silos in the credit union.
The Lending Officer’s work is now about driving loan balance acquisition and retention and credit risk, selecting and managing online loan origination systems, and streamlining lending processes for a more streamlined member’s experience.
The Admin Officer is not only focused on benefits, employee retention and acquisition, training, compliance, and facilities management; they also are selecting and managing online training, performance management, payroll, and attendance systems.
The Marketing Officer focuses on the four P’s and the distribution channels and systems to measure adoption and utilization, email marketing systems, website systems, diagnostics, content, outbound, inbound marketing, and member journey systems.
The Finance Officer is not only focused on interest rate risk, the balance sheet, income statement, budgeting, NIM, Provision Expense, investments, ROA, Capital, and sustainability. Additionally, the CFO is looking at how expenses and budgets are affected by projects and systems from all of the other silos.
Today, executive roles and responsibilities have merged. It is a correct assumption that each executive is the subject matter expert. What is missing is the understanding that every executive must take an organizational view and provide insights into how initiatives or changes impact their silo and the entire organization. To foster this collaborative environment, the CEO must reorganize based on strategic goals.
How is this done?
Identify the key strategic drivers of the organization. For example, if member engagement is a critical strategic driver, the credit union needs a Chief Engagement Officer (CXO) or a Chief Relationship Officer (CRO). This executive will have strategic leadership over everything that touches the member. The CXO’s or CRO’s responsibilities will cross into other traditional silos. They will direct all software integrations that are member-facing. They will oversee all processes that touch the member. They will have ownership of branches, the call center, and online applications. These executives will not be doing software integrations but will oversee the projects and collaborate with the Vice Presidents, managers, and supervisors responsible for actually doing the work. Yes, they will have direct reporting lines, VP from branches, operations, call center, and IT.
Typically this role will not be headcount addition. It will require an existing executive to become a life-long learner to take on their broadened responsibilities. The executive will need to learn how to direct work outside of their core competency and learn to collaborate, manage, and trust the VPs reporting to them.
If the credit union’s strategic objectives are: member growth, loan balance growth, member engagement, asset growth, and improved ROA, the executive team align as follows:
- Chief Marketing Officer directing member growth
- Chief Lending Officer leading loan balance growth
- Chief Relationship Officer addressing member interactions
- Chief Financial Officer directing how all of these roles will drive asset growth and improved ROA.
Organizational structure strategic alignment will require a cultural realignment of the executive team. In some cases, the executives will have to learn how to hand off some traditional control, and in other cases, they will have to learn how to lead across conventional silos. Also, all executives will need to understand that leadership in a credit union requires each executive to learn, grow, adapt, and stretch every day.