Why CUs Just Can't Afford To Settle For 'Good'

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Credit unions should never be satisfied with good, according to Jim Collins, author of "Good to Great: Why Some Companies Make the Leap...And Others Don't."

Easily one of the most dynamic speakers at NAFCU's 38th Annual Meeting, the best-selling author explained the role credit unions play in making the U.S. not just a good nation, but a great one.

"Credit unions are woven through the fabric of American society," Collins told the audience. "It is important that credit unions are non-profit. I have become passionate about the fact if America only has for-profit companies, we will only have a prosperous nation, not a great one."

"Good" is the enemy of "great," Collins argued. The reason America does not have "great" public schools is because we have "good" ones, he said. The same goes for our system of government: it works "pretty good," so people accept it.

What separates good companies from great ones? According to Collins, many businesses succeed because they had great leaders, or "parents," from their founding.

"But the die is not cast," he said. "Other companies succeed even though they did not have 'privileged' beginnings. This is because somewhere, mid-stream, they changed from good to great."

Many companies overcome constraints, Collins continued. The No. 1 stock-in terms of return on investment-from 1972-2002, was Southwest Airlines. The discount airline achieved this status despite the Sept. 11, 2001, terrorist attacks that crippled the travel industry for months.

Despite appearances, success does not happen overnight. Collins likened it to the transition of an egg to a chicken-a process that feels quite different depending on one's perspective. From the outside, nothing interesting happens for some time-the egg is simply sitting there. Until, one day, a healthy chick pops out.

"If this were a business that suddenly emerged, CNN would be there with a camera asking what happened on this one day," he offered. "But, from the perspective of a chicken, there was a lot going on every day. The breaking out of the shell was just one more step."

Many companies begin life with a vision, and the leaders get people on the bus to that place, he said. But, many of these businesses do not succeed. On the other hand, those that do succeed more often waited to see which direction was best before starting the bus, and waited to see who was best to drive the bus before moving.

Collins believes the old saying, "people are your greatest asset" is not true. Instead, it should be: the "right" people are the greatest asset.

Some in the business sector see the leadership of non-profit corporations such as credit unions as "indecisive," Collins said.

"I think they miss the point," he declared. "Decision making in the business sector often is concentrated in one person, which non-profit leaders find astounding."

Collins said he believes it is harder to run a non-profit company, and there is more true leadership there than in the for-profit sector.

"This is because there is a difference between 'leadership' and 'power.' Leadership only exists when people follow when they have the option to not follow. Great leaders do not seek consensus, they seek the 'right way.'"

Another aspect of the CU movement Collins found interesting was the relatively small size of the institutions compared to banks.

He pointed out the largest credit union has assets of approximately $22 billion, while the second largest is just $8 billion.

In the "sea of financial institutions," credit unions are "tiny," he assessed, but they succeed because of what they are.

"Credit unions have a nobility of purpose," he said. "They don't serve two masters: the customer master and the shareholder master; they serve one: the members. The core values are what credit unions hold closest. Core values don't change, practices do. Preserve the core and stimulate progress."

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