I always feel that I, a tenured college professor, have a lot in common with employees of mutual thrifts and credit unions. None of us are continually threatened with demotion, punishment, or dismissal on the basis of numerical performance standards, as employees of stockholder owned organizations frequently are.

As a tenured professor, I often use outrageous examples in my teaching and will skip deadly, useless meetings, thinking: What can they do to me? Executives and directors of mutual financial institutions often work with the same confidence.

This confidence can have tremendous advantages. In my case, it allows me to teach in the most effective way I know how, without worrying about being politically correct. I was pleased to get a recent letter from an old student who said: "Don't give up. You only get such a strong reaction because you are so close to the truth."

As for mutuals, their lack of outside bosses allows them to stress goals such as community service and to make marginal loans to those who need them. They often offer employees an attractive place to work where the bottom line isn't the main priority in decision-making.

Of course, the disadvantage in a mutual organization is that people and institutions that are not quantitatively measured can get sloppy or lazy without retaliation.

Another disadvantage is that there is little opportunity for personal enrichment in a mutual, as there is in a thrift or bank that can provide stock options.

One mutual CEO said investment bankers often court him with promises of becoming rich if his mutual converts to a stock company. And when mutuals convert, the new capital often burns a hole in their pockets. Leveraging this capital often led to bad loans, such as those that decimated the thrift industry and the economy in New England a decade ago.

But the day-to-day issue is the one that Holly E. Herman, the bright president of Kraft Foods Federal Credit Union, put to me during a recent management retreat:

She asked how staffs can be motivated without a way to quantify their success.

I immediately remembered IBM's way of lighting a fire under the troops. Its "100% Club"-employees who have met or exceeded quota-is so important that old-timers I have met talk about their success so far in making this year's club.

So Ms. Herman's board and top staff members concluded, after we discussed the question of motivation, that a mutual organization must emphasize award contests and bonus trips.

But the broader answer, we concluded, is that even mutuals must stress financial success. After all, mutuals-just like stockholder-owned companies-can be wiped out by declines in capital due to operating losses.

This is why acute credit union people accept the fact that credit unions are now businesses, rather than a "movement."

Now comes the harder question: How do you motivate a tenured professor? Luckily, no one asked me that at Kraft Federal's planning meeting.

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