Advice On How To Keep Clashes From Growing As The Assets Grow

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The extraordinary growth of credit unions, not just by assets but as organizations, is creating clashes seen elsewhere by businesses that have prospered.

The reasons aren't difficult to identify-discomfort with change, individual fiefdoms and a clash between the organizational change and project management.

But one person who has worked with more than 50 organizations across 15 different industries said credit unions have the opportunity to learn from others and can champion organizational changes that stick.

Lori Silverman, owner of Partners in Progress, Madison, Wis., told the CUES Marketing, Technology & Operations Conference that understanding what makes for successful organizational change can achieve just that outcome.

Successful change:

* Must be led by top management.

* Must be guided by a clearly stated business strategy.

* Needs to be guided by the organization's mission, vision and values.

* Must be guided by clearly stated beliefs about what makes an organization effective.

* Needs to be integrated organization-wide.

*Needs to be based on a three-or more year plan.

"This discipline has only been around 20 years, but at least 35 studies have been done," she said. What have those studies all found? "At least 70% to 75% of all organizational changes do not fully meet stakeholder expectations."

Why? She noted people guard their own empires, benefits aren't communicated, and the stakeholders were never asked.

The Most Important Distinction

There is a distinction that's important to make up front, and that is the types of organizational change," noted Silverman.

The first: Developmental change, or a change in skill, performance or practice against a standard. "This type of change usually happens through training, documentation, or even through informal discussion. But the key thing is there normally is no mindset shift involved."

The second: Transitional change. "This is where you unfreeze the system, change it and refreeze it. "The big issue here is something is going away and something is being added. In my experience, at least 80% of transitional changes don't require a change in mindset, just in behavior."

The third: Transformational change. It was in this area where Silverman focused most of her remarks, noting that "Transformational change can come in two forms: conscious or reactive."

Silverman said in most organizations the reaction to the change outlined above is the conscious, coming in the form of a "Yes, that's nice, we need to keep an eye on that." The second is the reactive, which she described as being "very good at reading things as situational anomalies; we think it's something that's going to go away."

Transformational change is important because it means two things to you: mindset shifts, and it means a shift in business paradigm, according to Silverman.

Three Pieces of Change

Silverman said there are three pieces to what she described as the "change equation."

1. Dissatisfaction with the status quo. "This can come externally, where we're uncomfortable, or from inside, where there's discontent. And it can come from a third source: changing the target. When the target changes, the reaction can be that it's unrealistic or unnecessary, or because it's going to force people to stretch to meet the new target."

2. A vision for the change. "This is conveying to people this is what this is going to feel like, smell like and be like. The level of change you must engender in people is that they feel it in their heart and they say, 'We gotta change. We should have done this before.'"

3. First steps. "This is where product management and organizational change bop heads. Project management says spell out every detail of every step and don't depart from that, and if you do, fill out the paperwork. And the people in organizational change are asking, 'How in the heck can you see all change coming?' When you see change, you take a time-out and make decisions and go from there."

When vision is missing, Silverman said companies turn to "flavor of the month" attempts at solutions as they move from one philosophy to another or to the latest management book.

Planning For Change

"The first thing I do in organizations before I ever get to the project management part of it is to decide who is leading the change initiative, who's sponsoring it and who are the key stakeholders related to that change," she told the meeting. "I want to know upfront the level of commitment to the change. I don't believe that level is all or none. At what level should the sponsor and the project manager be? They should at least have genuine commitment. I call it 'go slow to go fast.' If they're not on board with where you want to go, it's not worth going."

Silverman summed up what she often hears as, "If you've been given a project and you have no budget, no team and no sponsor, you have no project."

The second thing a CU needs to do is outline the dissatisfaction with the change and outline the vision. "If you can't say it or write it down on paper, you can't get other people to follow it."

The third piece, Silverman said, is an organizational assessment.

"Culture starts with assumptions; assumptions about people, the world and life. Those assumptions give rise to beliefs, and those beliefs give rise to artifacts, something people can hold. Procedures are artifacts. Your building is an artifact. When people do organizational change, they often think of it only as artifact. You have to start with the assumptions. You need to ask, 'If this change happens, what assumptions need to be altered?' One thing it assumes is that everyone will work in a coordinated, collaborative way."

Other Advice

Some of Silverman's other advice:

* A credit union should ask itself what new processes and systems might need to be put in place to make these changes work, and which ones might be impacted and what are we gong to have to do to alter it.

* The people infrastructure can't be overlooked. "What changes might have to be done to the overall organizational structure and governance? And it also means asking what changes will there be to the informal network within the organization."

* How will the change impact the physical assets, the technology assets?

* How does this change impact the management and leadership practices of the organization, especially in terms of recognition and reward. "People don't do what they don't get appraised for.

For external relationships and practices, "how will the change impact members and the community (in terms of branding and image).

How is the change to impact vendor relationships? Are new relationships needed?

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