CUES Podcast

Creativity is a skill that can be taught, asserts Beta Mannix, Ph.D., in the latest episode of the CUES Podcast.

“There are techniques that we can use to teach people how to be more creative,” explains Mannix, Ann Whitney Olin professor of management at Cornell University, Ithaca, New York, and a lead faculty member for CEO Institute II. For example, teaching team members how to do “structured brainstorming” can help foster creativity.

Overall company culture also plays a role in team creativity, Mannix emphasizes. More specifically, to promote creativity, a company’s culture needs to embrace generating lots of possibilities rather than finding that one right answer.

In addition, supporting innovation supports creativity. In the episode, Mannix defines both creativity and innovation and explains the link between them. 

The simplest way to define creativity is as generating the idea itself, she says. “As an example, [think of] the first person who came up with the drive-up window or the ATM. That person was creative.” Innovation, she continues, the implementation of that creative idea.

“So, when people come up with new and creative ideas,” she continues, “it’s important to actually be willing to implement or experiment with them. We have to be willing to have both things happening—creativity and innovation at the same time.”

Not surprisingly, to foster creativity, it has to be recognized by team members as a priority in the organization. That means that as leaders, “we have to make time for it,” Mannix says in the show. “We have to reward it and recognize it.” 

The show also gets into:

• Companies that do a good job of fostering creativity
• The best model for creativity
• The link between creativity and strategy
• Other factors that support creativity, such as the physical environment

As new generations continue to mature into the financial services marketplace, the demand for a digital-first customer experience has risen to the forefront. But there is still room at the table for direct mail. 

One of our guests—Robert Dudacek, president/CEO of CUES Supplier member Franklin Madison based in Franklin, Tennessee—elaborates early on about the top reason credit unions should use direct mail.

“When you think about physical mail, it creates a type of engagement that is uniquely different than what a member would experience through digital,” he says. “It’s something that’s tangible. It’s tactile. It’s something they can hold. … It’s just such a great way to reinforce that brand loyalty. They see the logo in a form that they can recognize. I think a high percentage of members actually read their mail every day compared to email.

Dudacek says good direct mail has some key features: It’s personalized and relevant to the recipient. It’s got brand affinity and respects the recipient as a member of that brand’s affinity group. It also gets right to the point.

Michael Brooks adds that, as a professional in this arena, he appreciates direct mail that follows up with a digital. Brooks is senior market strategy analyst for Franklin Madison, which builds member security by delivering industry-leading insurance products and marketing services through its brand partners—and is the sponsor of this show.

“If I see something come through my front door … tailored to me … then they also follow up that messaging with something that … is consistent with that messaging in the digital space, I appreciate that.”

Another reason the show identifies for using direct mail is that people of all ages read it. 

“We send out millions of pieces of mail each month,” Dudacek explains, “and have very sophisticated analytics … so we know not only who we’ve been able to send mail out to but who responds. … when we look at the data, we don’t see big difference in engagement across the age ranges and the demographics. … about two-thirds of all of all direct mail is opened and that’s across all segments … millennials tend to have about the same rate as other generations do. … We found that 84% of millennials look through their mail on a regular basis … and 64% actually prefer physical mail to digital.”

The show also gets into:

• How direct mail and other channels can work together
• Four key elements of successful direct mail that brings a return on your investment
• Suggestions for credit unions starting out in direct mail
• Direct mail in 2020 and beyond

Almost 40 years ago, Susan Fowler saw something on TV that made her become a vegetarian overnight. This was significant, because at the time Fowler loved meat and had a pot of fat on her stove because “everything tasted better with animal fat.”

After her switch, people would say to her, “You are so disciplined about being vegetarian.” But Fowler said becoming and staying vegetarian didn’t require any discipline at all. 

“I thought, ‘Why is that?’” she says in episode 81 of the CUES Podcast. “There were other things in my life that I couldn’t change that I wanted to change. I realized that motivation is at the heart of everything we do and don’t do but wish we did. I went on a quest for understanding motivation.”

Today Fowler, who will speak at CUES Symposium: A CEO/Chairman Exchange, Feb. 9-13, 2020, in Hawaii, is a world-renowned expert in the science of motivation. She’s the author of the best-selling book, Why Motivating People Doesn’t Work and What Does, and most recently released Master Your Motivation: Three Scientific Truths for Achieving Your Goals. She’s also co-author with Ken Blanchard of Self Leadership and One-Minute Manager. 

During the episode, Fowler explains why she thinks motivation is a skill. She describes how leaders can help their teams find their own motivational outlooks during change initiatives or projects. And, she defines the spectrum of motivation outlooks, from three that are suboptimal to three that are better.

On the optimal side of the spectrum is the “aligned motivational outlook”—a key one for organizations because it involves helping employees connect their own values to the goals they’re being asked to achieve at work or the changes they’re being asked to implement.

“People can align really important values that they have, not just the values of the organization, to the changes that are taking place or the goals they’re being asked to achieve,” Fowler explains in the show. “Leaders can facilitate that understanding by having values conversations with people. Most credit unions have values (that they put on plaques or cards). But then they stop there and don’t ask the individuals working in the credit union, “What are your values?” “How do your values align to our values?” and “How do your values align to what we’re asking you to do?”

The show also gets into:

• How leaders can facilitate a shift to optimal motivation
• The integrated motivational outlook and the inherent motivational outlooks
• How transformational leadership makes the difference in connecting employees’ values with organizational values
• How to have motivation conversations
• The importance to motivation of recognizing you have choices
• The importance to motivation of connections with other people
• The importance to motivation of being open to learning

When it comes to funding an executive benefits plan, choosing the right investment for the right person and your credit union means knowing both the needs of your executive and your organization’s risk tolerance, says Ramsay Ellis, executive benefits specialist with CUESolutions Platinum provider CUNA Mutual Group, Madison, Wisconsin.

Knowing your executive and your organization might be the easy part. Comparing various plans and funding sources can be tricky because various providers represent rates and returns in somewhat different ways, Ellis explains. 

Rates and returns are key things to try to compare benefits plans and funding investments “apple to-apples.” A second key consideration for making a good comparison of plans on an equal basis is overall expenses associated with a particular investment account.

“The fee that’s being charged in a managed account is charged quarterly and is very transparent,” Ellis explained. “You see it coming out of the account and know exactly what the charge is, down to the penny.  

“Where it can get fuzzy is the use of mutual funds, exchange traded funds,” he continues. “Those are types of investments that have internal fees and costs that are not transparent. … If the mutual fund charges 1% a year, they’ll take 1/365th of 1% out of the value of the account every day.”

Ellis says he has seen credit unions mutual funds and exchange traded funds inside of a managed account with a 1% wrap fee. “When you look at a managed account charging a wrap fee that also holds investments that have internal expenses—such as an exchange traded fund or other type of mutual fund, in reality you’re paying two levels of expense.”

The show also gets into:

• What permanent whole life insurance is, and why it's commonly used for split-dollar life insurance plan
• How providers illustrate their executive benefits plans
• Who at a credit union gets most involved in sorting out the finer details of executive benefits plans
• What other expenses credit unions might want to look for when setting up an executive benefits plans
• What executives besides the CEO a CU might want to put an executive benefits plan in place for—and why they might want to do this
• How plans for a CEO and other executives might be different
• When to use a split-dollar plan and when to use a 457(f) plan

True or false? The asset size of a credit union largely dictates the success of a security and education awareness program.

According to CUES podcast guest Ray Murphy, CRISC, this statement is definitely false. “Regardless of size, each credit union can have a world-class information security program,” he says in this episode.

Chief information security officer and cyber security advisor for LEO Cyber Security, a CUES strategic provider, Murphy previously built out the information security program at $106 billion Navy Federal Credit Union, Vienna, Virginia. Before working at Navy FCU, Murphy’s tenure at Mobile Oil exposed him to every facet of information security—from desktop and mainframe to PCs, voice operations and even executive support.

In the show, Murphy identifies some of the biggest challenges credit unions face every day: ransomware, which holds an organization’s system hostage in expectation of a ransom payment, and business email compromise, a particular type of phishing attack that tries to trick employees into clicking on a link to release malware that will take over a company’s network. 

“One of the things that organizations need to be focused on is to make sure they have a very robust incident response plan so they’re prepared … so they know what to do,” Murphy says. “If you have a threat that comes to fruition within your organization, time is of the essence.”

In this episode, Murphy also talks about the importance of securing cloud computing, having a good insider threat program and managing the regulatory environment—especially as it relates to protecting member privacy.

The show also gets into:

• Steps organizations can take to educate employees and increase their level of awareness
• The reasons why every credit union needs an incident response plan
• The risks of not having an incident response plan
• Key elements of an incident response plan
• Why all employees need to be involved in securing members’ data
• The role of communication and leadership in cybersecurity

Stephen Comer believes simplifying the work of his company’s credit union clients so those client CUs can, in turn, make life easier for their members.

Director of financial services and insurance sales at Hyland Software Inc., Westlake, Ohio,  Steve Comer talks in this episode about how to better connect all the “core systems” in a credit union to all the “content” needed to use those systems to do a good job for members. Hyland Onbase is a CUESolutions provider for enterprise information platforms and the sponsor of this podcast. 

In the show, Comer defines “core system” as the core technology tool used by each credit union business area. For example, the “core system” in lending would likely be the loan origination system. 

Comer defines content as “all of the information that makes it possible to do your business and do it effectively.” So, in the case of lending, the content could include an appraisal, the loan application, all the standard mortgage process documents, all the documents provided by the member plus data that lives in other business systems. 

“A really good content services provider is going to be able to connect all these different siloes of information and bring them all together to one central point,” he says. The aim of enterprise content management is to “have this holistic view of the entire transaction and all the people that are involved in the transaction, and find the most effective way to bring these, we’ll say, ‘broken’ pieces of information into one cohesive place.”

Comer says connecting core and content creates an “immediate uptick in overall satisfaction with the transaction.” 

“Anywhere in a process that you can connect information faster, the end result is that you are able to be more responsive to your member,” Comer explains. He says this idea is popularly applied to lending processes—for example, to make the time to decision shorter—but can be used to improve many other processes that impact member service at the credit union as well.

Having an enterprise content management system is another layer of technology, Comer says, but that’s not necessarily a bad thing. In fact, most small to mid-size organizations have 300 to 1,000 different software applications to drive their businesses. Any one of those applications can be to generate data and documents, but when all these pieces of information live in disconnected, disjointed systems, “it becomes very hard to make effective decisions in a timely matter,” he explains. “It becomes very hard to get access to all the information that’s required to drive in order the business forward. 

“A tool like a content service platform is designed to be … the glue that connects the systems together … so that you can have a more cohesive view of what your business is doing in its entirety.”

The show also gets into:

• More details on the day-to-day application of an enterprise content management system
• What credit unions can do to support efforts to integrate information across the organization
• Best practices used by Hyland client credit unions
• What’s next in the ECM arena (not surprisingly, it has to do with artificial intelligence!)

Using data from the CUES Executive Compensation Survey is a great way to benchmark your credit union’s base salary and bonus packages—and make sure you’re paying within the strategy your organization has set forth, says Michael Becher, CPA. 

Some credit unions decide to pay at the market average, explains Becher, vice president of Industry Insights, Dublin, Ohio, which works with CUES to produce the survey. Other credit unions choose to be market leaders in compensation to help them attract and retain the best talent available.

“With the way the economy is now, with job surpluses and the like, having this information (market compensation data) is just vital in terms of putting together a compensation package that’s competitive in today’s environment,” Becher says in the show. 

Becher and Industry Insights started working with CUES on both the CUES Executive Compensation Survey and the CUES Employee Salary Survey in 2014, working to improve the surveys year over year to provide the best possible data to credit unions.

This year, the key trend in the CUES Executive Compensation Survey is that compensation grew, but at a somewhat lesser pace than in previous years.

“For the past few years, we’ve seen really, really strong growth in terms of compensation levels in the credit union industry,” Becher explains. “What we have seen this year is just a slight drawback.”

Whereas typical increases for the various positions included in the survey in previous years might have increased 6, 7 or 8%, he says, this year the increases might have been only 5, 6 or 7%. That’s “not necessarily a bad thing,” he notes, especially since credit union compensation is “still outpacing a lot of compensation increases in other industries.”

There’s not an exact reason for this trend, Becher adds, noting that it most likely has to do with the uncertainty in the economy. Economists keep saying “‘next year we’re going to see a dip,’ ‘next year we’re going to see a dip,’ ‘next year we’re going to see a dip,’ but that dip hasn’t happened yet.” 

“We’re in a weird spot right now because there are these indicators saying … things are going to go down, but then we have seen historic unemployment rates being lower than anything we’ve seen since 1969 … and job surpluses that reach new highs,” he continues. “There’s these other signs saying … there’s a lot of room to grow. So, there’s a lot of uncertainty … Are we going to go up? Are we going to go down? … People don’t want to get caught with not being prepared.”

In the episode Becher also weighs in on:

• Base salary vs. bonus compensation and how uncertainty in the economy impacts the decision about which to increase in a given year and by how much
• Notable data for CEOs and other executives (top mortgage and business lending executives) from this year’s survey
• New data being collected on the survey about gender
• Turnover trends and the importance of succession planning
• How to effectively use compensation data
• How to discern whether you have good data

2018 CUES Distinguished Director James Sackett joins the show to discuss his own onboarding as a millennial director at $1.3 billion Firefly Credit Union, Burnsville, Minnesota—and to offer additional ideas you can use for your own efforts.

Now vice chair of the board at Firefly CU, Sackett’s interest in credit unions started early. His father was a credit union director while Sackett was growing up—and still is to this day. “There was always CUES swag and credit union swag around the house,” he quips. “I’ve always known about them (credit unions) and loved them. Taking next steps in my career, I knew I wanted to be involved in some way and also thought I had a lot to offer. When I moved to Minneapolis, I joined Firefly Credit Union … reached out and inquired about the board and started the process.”

In the episode, Sackett shares quite a few reasons CUs can get by having younger board members: 

·       Diversity of perspective—diverse thought generates more robust strategies

·       Bench strength—longer tenured board starts to move on

·       Future leadership—companies that really have success in the long term bring future leaders in a level or two below where they want them to ultimately to be working

·       Other value: representation of a target market—the millennial demographic is a very large group!

He also shares his thoughts about the value of board members with a great deal of experience, like his father: things they’ve seen during their tenure such as the impact of the economic cycle.

What else does Sackett recommend when it comes to recruiting younger board members?

·       Do something!

·       Begin with the end in mind—know what skills and perspective you’re looking for

·       Use tools like LinkedIn and local universities to locate people

·       Contemplate what it’s like to volunteer for your credit union’s board—is it conducive to younger board members?

·       Re-examine your meeting materials—are they online? Should they be?

·       Get the message out that people can get involved in volunteerism at your credit union

·       Talk about the mutually beneficial nature of the role—the credit union benefits from good leadership, the community benefits from a strong credit union and the leadership experience can aid a younger director’s career development as well

Interestingly, being a millennial is not on Sackett’s list of critical traits for directors. If a credit union is recruiting young people just to check a box, it’s not worth the effort. Having life experience, being able to do critical thinking and having perspective that a person is ready to offer up at the board meeting are fair more important. Intellectual curiosity is also helpful, he notes. 

“You need to be … willing to learn and see what’s coming down the pipe,” he explains. “It ties in with the perspective piece in having that interest in looking ahead and learning.”

The show also gets into:

·       Where to find younger board members

·       Biggest challenge credit unions face in recruiting younger board members

·       Board assessments

·       Board orientation and retention

This episode’s guest has a professional mantra that aligns well with CUES’ mission of developing credit union CEOs, executives, board members and future leaders. Eric Earle, executive benefits advisor for CUESolutions provider CUNA Mutual Group, Madison, Wisconsin, says the idea he lives by in his work is: “People make good decisions when they’re well informed.”

In this episode, Earle talks about how more credit unions are establishing benefits plans to help retain existing CEOs and C-suite executives—and to recruit new ones when necessary.

“Competition for executive talent has intensified in recent years and as a result we have seen a number of credit unions put executive benefit plans in place,” he says in the show.

During the episode, Earle describes board oversight of a credit union’s executive benefits. 

“A credit union’s board of directors is ultimately responsible for the establishment of an executive benefit plan,” he notes. “However, many boards will task their personnel committee with the responsibility of designing the benefit plan to be mutually beneficial for the executive and the credit union membership as a whole.

“It’s usually more efficient for a subset of the board to evaluate the benefit plans, determine the right mix of benefits and make a recommendation to the full board for approval—rather than having all of the board members involved in the process," he adds.

Earle is sensitive to the fact that some credit union board members don’t have experience with benefits plans or investments and that can make it challenging for them to take on learning about or implementing these plans. In the show, Earle identifies some key questions he gets asked, including:

·       Why should we provide additional benefits to our CEO when she already earns way more than our average member? How do we know if an executive benefit plan is really right for our credit union?

·       Are we paying our senior leaders appropriately?

·       Can my credit union afford to provide additional benefits for our CEO?

Listen to the show to hear his answers! The episode also gets into:

·       Two specific examples of how executive benefits plans might not be so expensive as credit union leaders might initially anticipate

·       Several best practices for boards that want to learn about executive benefits and, ultimately, make a prudent decision

“There’s a lot of great resources out there to help credit union boards do their due diligence,” Earle says. “But the most important thing is that they actually do it—that they actually take their time to evaluate their options. And, going back to my mantra, when people are well-informed, they make good decisions.”

Jimese Harkley, CUDE, CUES’ VP/membership, previously our guest on episode 67, returns to the show to talk about the 90-day free trial of CUES Unlimited membership that’s available through Oct. 31 to HR and training professionals. The free trial is designed to boost knowledge about what CUES membership benefits can do for your credit union

CUES’ 2013 Next Top Credit Union Exec, Harkley is passionate about the new CUES membership structure and how it helps credit unions and professionals in the industry. In the show she talks about why $2.5 billion Provident Credit Union, Redwood City, California, added 400 people to its roster of CUES members. 

“CUES and what we have to offer for our membership just stood out” to the CU’s VP/training, Harkley says. The CU made “CUES U a benefit for staff, just like retirement benefits and health care benefits.” It also is making CUES benefits and learning and development “a huge part” of its onboarding process.

In all, “it’s been extremely enlightening to see how orgs are excited about leveraging the benefits for their development needs,” Harkley says.

 She’s equally passionate about the value of the free trial so more credit unions can come on board with CUES membership. “Everyone deserves to hear and learn about these wonderful changes that we’ve made,” she emphasizes.

In the show, she details the answers to key questions about the offer, including:

·       Who is eligible? (HR or training leaders whose credit unions have no current membership relationship with CUES)

·       How long does it last? (90 days)

·       What’s included? (all the benefits of CUES Unlimited membership, including access to CUES Learning Portal and exclusive CUES members-only guides, including Director Onboarding Toolkit) 

·       How long will the trials be offered? (through Oct. 31)

·       How hard is it to sign up for the free trial? (It’s easy! Simply visit our website. One the right side, click the orange box that says, “HR Professionals—Try CUES membership FREE for 90 days, submit the form and someone from membership at CUES will contact you)  

“I’ve grown up in the CU industry with CUES being closely by my side,” Harkley adds. “I was the 2013 NTCUE and through that process I’ve learned so much and gained access to so many new benefits. In joining CUEs last year as an employee, really listening about what CUES expected to do with the member benefits. … I wish I’d had this tool to help me sharpen my skills in certain areas of the business world.”