At Newcleus, we believe in investing in our client’s success. We aim to help our clients be the best version of themselves in order to create success for their credit union. With that purpose in mind, we’ve decided to share a few insights from CEOs that we have worked with in the past, for new or aspiring CEOs to gain some insider knowledge. First up, Jim Merrill, CEO at Inspire Credit Union, graciously sat down with our team to answer a few questions about his experience as a CEO of two different credit unions. Here are the main takeaways from our conversation with Jim.
The importance of a strong board relationship from the start.
One lesson Jim learned from his first credit union was the importance of building a relationship with the board from the start. “Building a relationship with a board, establishing ground rules, trust, honesty, transparency, understanding the board’s vision and expectations and knowing what they need to be done, to be able to execute that and really being aligned with the board is essential.” The foundation is to know what needs to be done and to be able to execute on it in alignment with the board.
With his first credit union, where he started his CEO career path, there was a disconnect between his vision and the vision of the board. It’s important on both the board and the CEOs part to interview one another to ensure alignment. Jim says, “I think the first go-around is that I think my vision for what that credit union needed was much different than the board’s vision. I don’t think that the board interviewed me well, or I interviewed the board well in terms of making sure that alignment existed.” On his second go-around, he understood why the interview was essential. If a board and CEO are not aligned, they cannot create mutual success.
When he transitioned into his role with Inspire, the board gave him the freedom to execute his vision. Before he came on, “The credit union was not growing. They didn’t really have much of a presence in the community… I think they (the board) fully understood that they needed to hire a CEO who was going to be results-driven, who was going to really be a visionary that could grow the credit union.”
Jim was the ‘someone’ they were looking for. He had the unique skillset to come into the credit union help rebuild it better. CEOs coming into a new credit union tend to shy away from parting ways with the existing employees, however sometimes it is necessary. Jim knew that his vision for the progression of the credit union may require massive changes. While he didn’t intend to move on from most of the existing employees, it ending up being the case. Jim knew that having the right people in place that he trusts to execute on his vision was one of the most important changes he had to make.
As Jim Collins highlights in Good to Great “First Who … Then What. We expected that good-to-great leaders would begin by setting a new vision and strategy. We found instead that they first got the right people on the bus, the wrong people off the bus, and the right people in the right seats—and then they figured out where to drive it. The old adage “People are your most important asset” turns out to be wrong. People are not your most important asset. The right people are.”
Within the time he has been with Inspire, he has successfully built brand awareness around the community, and has built a vision and strategy that has been executed. Inspire today looks much different than it did 6 years ago. From the internal culture, to the technology, to the product and service, to the relationship-driven focus, Inspire has grown to see quite a bit of success.
Understanding the balance of board/CEO communication.
Balancing communication with the board between too much information and not enough information is essential to your success as a CEO. One of the main ways Jim has navigated this balance is to always be prepared. “Because there is so much information there, it’s important to be prepared, knowing what you want to share with them and making sure that you’re giving them enough information to execute their fiduciary obligation without overwhelming them to the point of paralysis by analysis.”
With that being said, finding that balance was challenging for both Jim and the board. In the first couple of years, Jim’s board meetings would go 3 hours to ensure the board members remain educated- very different from their former 30-minute board meetings.
The way they ended up finding the balance was through working together and accepting the commitment was a little bigger than previous years. Those 3-hour meetings quickly turned into an hour and a half meetings. However, It took those long meetings for Jim to understand what was essential to share, and what was an overabundance of information.
The biggest part of this learning process was Jim letting go of his ego. When a CEO’s ego becomes too big, they let their ego rule both their relationship with their staff and the relationship with the board. Jim doesn’t believe he needs to be the smartest person in the room. Rather, he believes that he gives his team the tools and resources they need to become successful, and he’s there to support them through that process.
It’s essential that, as a CEO, you don’t get offended by feedback brought to you by your board. As your board members are members, first and foremost, they likely have great feedback that can help lead the credit union to greater success.
Handling staff transitions and keeping morale high.
Before Jim came on as CEO, he set the ground rules with the board, in which the board then gave him full range and full authority to make staffing decisions. His board understood that they had one employee, Jim, and the future of all other employees was going to be made by him. When you go into situations where that is necessary, it is essential that you have board buy-in.
Jim worked to come into this process with an open mind that allowed him to make educated assessments on everybody, understanding who they were, what their strengths were, what their weaknesses were, and he gave himself the opportunity to make an evaluation on whether or not they could succeed in the new environment he was creating.
In doing this, he found that a sweeping decision had to be made, so he executed it quickly. Within one year, a fresh leadership team was on board with Inspire – bringing the needed alignment and skill sets that fit the new vision and purpose of Inspire. Parting ways with former staff was, of course, a challenge – Jim had this to say:
“I think that the staff that was here realized that they weren’t a good fit in the new culture and what the new environment was going to be. As much as I would have liked to retain some of them, I think they realized that it wasn’t a good fit.”
Jim needed creative, vision-centered, growth-minded employees who could help him build a new successful credit union. So Jim began implementing an extremely lean team. A team that he trusts to do their job effectively and efficiently. What typical credit unions at their size do with 50-60 employees, Inspire does with 32.
Building a new culture and executing on your shared vision.
As a CEO, it’s important to craft a vision for the credit union you are going into. Jim started with identification. “We identified and defined what we wanted the culture to be because you have to get the culture right internally before you can take it externally.”
Once Jim identified the culture we wanted to build internally, he asked himself a few questions:
- What do we want our employees to feel like?
- What is the value proposition?
- What changes were necessary?
- Where should the focus be?
Once the team figured out the answers to these questions they crafted a vision around how to achieve the shared vision. The vision they crafted is what still defines the strategy and focus for every year.
Another important aspect of strategy that Jim mentioned is that despite their laser-focus, his team ensures they are still able to pivot. They recognize that every year, the priorities may be different, and the focus may need to be different, but what drives those decisions remains constant.
Communicating this new vision can be a challenge. To accomplish this goal, Jim surrounds himself with a team that is loyal, trustworthy, and who buy-in to the strategy. In order to effectively execute his new vision, he needed a team that was willing to challenge his point of view in order to ensure the best ideas prevail for the success of the credit union. This type of communication begins with Jim, he encourages his employees to form their own opinions and to challenge the way the credit union is moving forward.
As a CEO, Jim believes in his employees’ abilities. He encourages them to manage and communicate the vision and strategy to their team. “You have to understand as an executive, and a manager, that people at the lower levels of the organization need to understand why they’re being asked to do something. Our team is exemplary at explaining why what your doing is important and how it fits into the bigger picture.” If your team understands how their actions translate to success on the balance sheet, they will be more likely to buy-in.
The missteps along the way.
While Jim’s time at Inspire has been pretty misstep-free, one place Jim feels he has learned a lot is in the talent acquisition side of the business. Early-on, candidates would be hired because they had a great-looking resume, a history of apparent success, among other factors. Unfortunately, some of those apparently “great” hires ended up being a very poor cultural fit with the organization.
The biggest lesson Jim has learned from these experiences is that the interview is a two-way street. You are interviewing the candidate, but they are also interviewing you. The potential employee
needs to understand the culture they are agreeing to enter, and they should have enough information to be able to determine if it’s the right fit for them as well as the employer.
“I think creating a process in which you allow the applicant to interview you and you place a level of importance on that being a 50/50 process is essential. You need to know what you’re getting into and you can make a determination if this is a good fit for you.”
With that being said, it’s important to ensure transparency with the board. Every month and year Jim has established a large amount of goodwill and trust that continue to increase because of his transparency. When a board/CEO relationship communicates well and can frankly and openly share information about what is going well and what needs some work, the credit union will see success.
Jim would not have nearly tripled the assets of Inspire and accomplished all he has in his 6-year tenure without the trusting bond he’s created with the board. Jim states “I can’t stress the importance of that enough. No matter how big or small the organization is. That open communication with the board is so important.”
Advice for those starting their CEO journey.
One piece of advice Jim would give himself six years ago would be to “stay true to who you are and be yourself because that’s why you were hired and you got the job; don’t change. Don’t let success change the way you manage people. Don’t let success change your approach to your job.”
At Newcleus CU Advisors, we invest in the success of our partners. In that, we find that the people we work directly with have some of the best advice for those just starting in their CEO journey. We hope Jim’s advice is insightful and helpful as you tackle navigating this new terrain.