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As I have traveled throughout the credit union system this past year speaking at various venues and working with local credit union leaders in their strategic planning sessions, the subject of effective leadership has always sparked interesting discussion.

What really gets the discussion going is a very simple question: what makes for an effective leader? Are leaders born with innate qualities or can effective leadership be learned?

Some historians and management gurus believe leaders are made based on the challenges they face and how they overcame them. Others believe that upbringing, heritage, training, experience the quest for power, ego, influence and the drive to serve contribute to one's leadership style and success. I happen to believe that all of these factors contribute to the type of leadership style that executives may exhibit.

I have worked with some very competent (and some not so competent) credit union leaders during my 20 years of tenure in the credit union movement. Some traits or characteristics of effective CEO and board leadership that I have observed include the following:

* A powerful business and people acumen.

* An embracing of diversity.

* The ability to inspire (not motivate) people to achieve.

* A clear vision of seeing the possibilities and the preferred future for the credit union.

* The ability to build partnerships and alliances.

* Being servant leaders to the members.

* A curiosity of the world and a facilitator of change.

* Leading more by actions versus words.

* The ability to utilize technology to achieve business results.

* A risk taker and not fearing failure.

* The ability to convert the learning of ideas into practice

And having a passion for the credit union philosophy in what they do for their, staff, directors and members.

A key challenge for contemporary credit union leaders is to transfer this "people helping people" member centric passion or "higher calling" to all who are engaged in serving members.

Credit union leaders must understand that this higher calling should be looked upon as one of our differentiating competitive advantages in the financial services industry.

We (our credit unions) don't just take in money and make loans to our members.

* We help our members with their financial well being in times of crisis.

* We put members in their dream house and help them establish themselves in the community.

* We help members with their transportation needs.

* We help members finance their education to become more productive and competent workers and citizens.

* We help members plan for their mature lifestyle needs.

* We help members organize and control their finances more effectively.

* We help members access their financial resources more conveniently.

* We help members save money by offering better rates on savings and loans.

* And we contribute to improving the quality of life in the communities we serve by engaging in socially responsible activities and causes.

As credit unions compete in the new decade, how our leaders lead will be looked upon with greater scrutiny as we deal with the challenges of succeeding in a rapidly changing global financial services marketplace.

Effective leadership will be one of the key factors of how the success of credit unions will be measured in the 21st century. And how current leaders transfer this higher calling passion may be their most important legacy.

Leadership is a mindset. It's a way of being and thinking. It's the way you carry out your daily functions in order for your credit union to serve your members in the best way possible. In facing an uncertain future, we need to remember the words of one of the most renowned leaders of all times, Alexander the Great, who said, "Difficulties are only steps to a goal. A courageous person calls them challenges."

Effective credit union leaders will have the courage to accept those challenges and perform at a greater level than the competition.

John A. Vardallas is president of International CU Business Consulting, a Madison, Wis. based Leadership & Management Development firm. He is a frequent speaker, trainer and consultant to the international credit union system. He can be reached at 608-221-4621 or jvardallas aol.com.

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