Is Your Org Structure Shackling Strategic Success?

Credit unions need to see their organizational structure as an organism, NOT a hierarchy.

Innovation and adaptability reign supreme in credit unions. Being locked into a legacy organizational structure in a cross-functional, cross-silo operating environment often stifles short and long-term success. While these structures may have served the credit union well in the past, they now act as formidable barriers to strategic success. Coupled with the awareness that credit unions operate on principles of community involvement, member-centric services, and democratic decision-making, an examination of the legacy organizational structure is warranted because rigid hierarchies, bureaucratic processes, and outdated management frameworks often stifle these noble ideals.

Most credit unions adhere to hierarchical models reminiscent of the early 20th century, characterized by top-down decision-making, departmental silos, and a lack of agility. As an attempt to “modernize” this structure, credit unions have added new C-suite roles: Chief Experience Officer (CXO), Chief Business Intelligence Officer (CBIO), Chief Strategy Officer (CSO), Chief Digital Officer (CDO), Chief Growth Officer (CGO), and Chief Diversity Officer (CDO), to name a few. This hierarchical approach of adding C-level executives to drive the strategy forward creates a top-heavy compensation-heavy credit union. Instead of solving the challenges, it often stifles innovation and inhibits the ability to respond swiftly to market changes or member needs. Decisions must pass through multiple layers and across numerous silos to gain approvals. The results are delays and missed opportunities.

These traditional legacy silos also create barriers to collaboration and communication. Departments operate in isolation, focusing solely on their objectives rather than aligning with the broader strategic goals of the credit union. This fragmented approach hampers innovation and limits the ability to effectively leverage collective expertise and resources.

The most significant impact of this centralized authority in legacy structures is that it often undermines the principles of member and staff empowerment and democratic governance, the fundamental differentiating attributes that are core to the credit union philosophy. Members and staff feel disconnected from decision-making processes, resulting in reduced engagement and alienation. This lack of member and staff involvement erodes the cooperative spirit. It impedes the credit union’s ability to understand and address the evolving needs of its members, employees, communities, vendors, and partners.

There is an Alternative Organizational Structure

In contrast to traditional hierarchical models, modern organizational structures prioritize flexibility, collaboration, and member engagement. Think of an organizational structure as an ameba, not a pyramid. An agile framework, a Holacracy, empowers employees at all levels to make decisions autonomously, fostering a culture of innovation and accountability. As a flat organizational structure, a holacracy promotes open communication and cross-functional collaboration, enabling credit unions to adapt quickly to changing market dynamics and deliver more responsive services to their members.

What is a Holacracy?

A Holacracy is a management and organizational system that distributes decision-making authority and power across self-organizing teams rather than relying on a traditional hierarchical structure. Developed by Brian Robertson, Holacracy aims to create a more agile and adaptable organizational structure by replacing traditional management roles with a system of distributed authority with clear roles and responsibilities. In a holacratic organization, teams are empowered to make decisions within their domains, emphasizing transparency, accountability, and continuous improvement. Holacracy is often associated with decentralized decision-making, dynamic governance, and fluid organizational structures.

To remain relevant and resilient, credit unions must break free from the shackles of tradition and embrace modern, agile frameworks that prioritize flexibility, collaboration, and member engagement. By doing so, credit unions can unlock their full potential and continue to fulfill their mission of serving their members and communities for generations.

Transformation Requires a comprehensive transformation effort.

This transformation from a hierarchy to a holacracy encompasses structural changes, cultural shifts, and process improvements. Leaders must champion a vision of agility, collaboration, and member-centricity, inspiring employees to embrace change and adopt new ways of working. Investing in employee training and development is crucial to equip staff with the skills and mindset needed to thrive in a rapidly evolving environment. Empowering employees to take ownership of their roles and contribute meaningfully to the credit union’s success fosters a culture of innovation and continuous improvement.

Here are the Steps to Transition to a Holacracy

  1. Assess Current Structure and Identify Gaps: Conduct a thorough assessment of the credit union’s organizational structure, processes, and culture. Identify areas where the current structure is hindering strategic alignment, innovation, or member-centricity. This assessment should involve input from employees at all levels and feedback from members and other stakeholders. An independent third party best does this assessment with no blind spots, sacred cows, or holy grails that might otherwise be unseen, protected, or off-limits.
  2. Define Strategic Objectives: With this deep-dive understanding from the assessment, the credit union can clearly define its strategic objectives and long-term vision.
  3. Build a Roadmap: To align the organizational structure with these objectives while ensuring that every aspect of the organizational structure supports the credit union’s mission, values, and goals will require a comprehensive plan with milestones and reporting metrics. This involves identifying a strategic owner of the objective. This strategic owner will ensure that redefining roles and responsibilities, restructuring departments, or introducing new cross-functional teams are allocated the necessary resources, funding, and organizational support.
  4. Engage Leadership to Secure Buy-in: Securing buy-in from senior leadership for the organizational transformation is challenging. It is not uncommon for a senior leader to feel their “empire” is being destroyed. Constant communication of the rationale behind the change and its benefits to the credit union, the employees, and its members. Senior leaders must become transformation champions, empowered to lead by example and actively support the transition process.
  5. Develop a Change Management Plan: Change is hard. Acknowledge this fact and develop a comprehensive change management plan that outlines the steps, timeline, and resources required for the transition. This plan should address potential challenges, risks, and resistance to change and include strategies for mitigating these obstacles. Constantly communicate the plan transparently to all employees while providing opportunities for feedback and input.
  6. Restructure Roles and Responsibilities: The required cultural transformation begins when the credit union redefines all roles and responsibilities to align with its strategic objectives and employee and member needs. The credit union must implement a flatter organizational structure that promotes autonomy, accountability, and collaboration. Building the confidence and trust of all employees so they are willing and able to take ownership of their roles, make decisions, and see themselves as vital contributors to the credit union’s success takes time, coaching, and mentoring; it doesn’t happen overnight. Some employees will be quick, some will be slow, and some may be unable to transition.
  7. Promote Communication and Collaboration: A critical part of this cultural transformation is to build a culture of collaboration and open communication across all levels of the organization. Collaboration and communication are two vital pieces of creating a workforce of empowered workers that will help to break down departmental silos and encourage cross-functional teams to work towards common goals. Implementing regular forums for sharing ideas, feedback, and best practices, ensuring everyone feels valued and heard, is essential in building a collaborative, empowered workplace.
  8. Invest in Training and Development: Invest in training and development programs to equip employees with the skills, knowledge, and mindset needed to thrive in the new organizational structure. We know employees want to do their best and feel valued. Some may hesitate to embrace their new empowerment and decision-making abilities, but this hesitation is often because they need more skills, knowledge, and self-confidence. Providing continuous coaching, mentoring, learning, and growth opportunities will help employees realize they are empowered and capable of adapting to changing roles and responsibilities.
  9. Leverage Technology and Data: Leverage technology and data analytics to streamline and align processes. It is not uncommon for a credit union to have different processes and risk tolerances by channel or application. Improving the alignment and seamless access from channel to channel and application to the application will improve decision-making and enhance the member experience. This alignment and standardization will allow the credit union to have more accurate data and the resulting insights to inform strategic decisions and measure the impact of organizational changes.
  10. Monitor and Adjust: The scientific method applies:
    1. Observe and Identify: The first step is to observe and identify areas within the credit union where change or improvement opportunities are happening or being discovered. This might involve analyzing performance metrics, gathering feedback from employees, members, partners, or vendors, and identifying shifts in the industry landscape.
    1. Hypothesis Formation: Once problems or opportunities are identified, hypotheses are formulated regarding potential solutions or changes that need to be addressed, and adjustments in the roadmap, timelines, and milestones are made.
    1. Implementation: The identified changes are made and communicated. This often involves piloting new processes and technologies or adapting the organizational structure. These adaptations are never considered final but are seen as a way to test the validity of the hypothesis while mitigating disruption to day-to-day operations.
    1. Data and Analysis: During the implementation phase, data is collected to assess the impact of the changes. This could include quantitative data such as financial metrics or member satisfaction scores and qualitative data from employee or member feedback. Data analysis helps evaluate whether the changes achieve the desired outcomes and identifies unintended consequences.
    1. Learning and Drawing Conclusions: Based on the data analysis, conclusions are drawn regarding the effectiveness of the changes. If the hypotheses are supported and the changes produce positive results, they may be scaled up and integrated into the credit union’s standard practices. If the results are inconclusive or indicate that the changes are not achieving the desired outcomes, adjustments may be made or alternative approaches explored.
    1. Iterative Mindset: The scientific method is iterative, and similarly, change management in a credit union involves continuous improvement. Lessons learned from each change initiative are applied to future initiatives, refining processes and approaches over time. Stay flexible and adaptive, embracing a continuous improvement mindset.
  11. Celebrate Success: Celebrate each milestone achieved throughout the transition process, recognizing and rewarding employees for their contributions. This principle of celebration sustains momentum by reinforcing the credit union’s commitment to strategic alignment, innovation, and member-centricity. It keeps everyone focused on the long-term vision and its positive impact on its members, employees, and communities.


Rich Jones is the Founder/Principal of Leading2Leadership LLC. Before starting his strategic planning agency, he spent over 20 years in leadership roles in the financial services sector. Before becoming an executive in the financial services sector, Rich was an entrepreneur, building and selling two businesses and working for early-stage start-up companies in executive roles in marketing, business development, and seeking investment partners. With more than three decades of experience, he brings innovative thought to companies and executives. Rich published “Leading2Leadership, a Situational Primer to Leadership Excellence.” The book is available on and was designed to be used as a book study for leadership development programs; it breaks leadership skills into manageable situations for discussion and reflection. Rich works with credit unions, CUSOs, and vendors, designing digital, data, culture, marketing, and branding transformation strategies. In 2014, Chosen as a Credit Union Rock Star by CU Magazine, and in 2018, Rich received the Lifetime Achievement Award from CUNA Marketing and Business Development Council. A Marine and graduate of Colorado State University, Jones shares his expertise at

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