With their deep understanding of credit union finances, perhaps the most comprehensive view of the organization’s health, many consider the chief financial officer (CFO) position as the best training ground for the CEO office.

But CFOs will need to rely on more than their numbers acumen to reach the CEO suite. Today’s finance leaders need leadership, communication, and soft skills such as empathy and humility to advance.

Still, finance is a good foundation upon which to build.

“CFOs know the numbers inside and out,” says Matt Piazza, president/CEO of $101 million asset Atlantic Financial Federal Credit Union, Hunt Valley, Md., and a former finance professional. “They see how all areas of the credit union work and function. That vantage point helps you understand the credit union from a strategic perspective.”

Paul Fero says his finance background is the “lens” through which he views his CEO role at $36 million asset North Districts Community Credit Union in Gibsonia, Pa.

“I use finance as the basis for all my analysis,” Fero says. “I live in spreadsheets, doing cost-benefit analysis, budgeting, and forecasting. Working in a small credit union, I don't have a CFO who does my budget projections, so I do that myself.”

Fero uses his proficiency with spreadsheets to break down loans, deposits, and expenses into components that provide insights into the credit union’s strengths and weaknesses.

Fero worked in finance with tech startups, in banking, and as a college instructor before getting his start in credit unions as the CEO of a single select employee group credit union in 2003. He has been CEO of North Districts Community since 2018.

He offers a straightforward example of how he leverages his finance knowledge in the risk-based lending program he implemented at North Districts Community.

“We added pure financial components to our risk-based lending program that we never could have included without my finance background,” Fero says. “As the CEO of a small credit union, you can communicate that difference to the board, our lenders, and our member service staff to get buy-in and adoption of the process.”

‘Surrounding yourself with people who are smarter than you.’

Mike Lord

Soft skills

A solid finance background extends beyond a spreadsheet, says Mike Lord, president/CEO of $44 billion asset SECU, Raleigh, N.C. “You should have exposure to the risks of running a credit union and managing those risks. It is important to understand the macro areas of the organization including how to manage liquidity, interest rate, and credit risk.”

But just as important is understanding you can’t know everything, says Lord, who worked as a loan officer and branch manager before becoming SECU’s CFO in 1986 and CEO in 2016.

He says those experiences gave him important soft skills that serve him well as CEO, particularly empathy and humility.

“As a loan officer and a branch manager, you gain an appreciation of the human condition—that bad things happen to good people and how difficult it is for folks to sit down in front of someone and ask for a loan,” Lord says. “That lesson translated into treating people courteously and fairly. It an education in understanding and helping our membership by treating them as human beings.”

Another key to advancement is “surrounding yourself with people who are smarter than you,” says Lord, “and being a good listener—something I sometimes struggle with.”

Effective leadership is much easier with good counsel, and leadership skills are much more of a priority for CEOs, Piazza says.

Leadership is huge,” he says. “I went from overseeing three people to being responsible for the entire staff of 25 people at my credit union. You need to convey the right messages to your direct reports so you can continue that conversation throughout the entire credit union. It’s a little easier at a smaller credit union because you can have more direct access to every level of the organization.”

Piazza became CEO at age 30. He considered himself an “ok” communicator before this, but he knew he had to expand on that skill.

He echoes Lord’s comments on empathy. “I knew I needed to listen better, with more empathy. I had one perspective, coming from finance, where most things are black and white. As CEO, people reporting to me were more operationally or marketing focused, where the perspective is much different. Communication is about listening and understanding.”

‘I knew I needed to listen better, with more empathy.’

Matt Piazza

Working with the board

Those skills come in handy for what is probably the biggest adjustment for any CEO: working with the board of directors.

“That’s where you hone your leadership and communication skills,” Piazza says. “How much information is enough? Too much? You have to strike a balance, keeping the board informed while keeping them out of the day-to-day weeds.”

“The CEO doesn't have one boss,” Lord says. “In our case, I have 11 bosses. We have a board comprised of 11 unique individuals. You have to learn how to work and communicate with the board and manage the relationship with the board.

Communication is “critically important to coordinate, articulate, and recommend a strategic plan for the organization that meets the direction of the board and management. You need to get folks headed in the same direction.”

That also applies to members, Lord says. “We’re always trying to understand where our members are going and what services are important to them. If we’re not timely with our products and services, we’ll no longer be relevant.”

Just as Lord spent time working in other areas of the credit union, Piazza advises finance leaders to get out of their comfort zone.

“When I knew there was a possibility that I could become CEO, I took as much time as I could to learn about other areas of the credit union,” he says. “I literally asked, ‘Why are we doing this?’ I was very inquisitive.”

Fero says finance people should expand their qualitative and reasoning skill set to adopt a more holistic approach to decision making when working with other areas of the credit union.

“Everyone has a role to play in the success of the credit union,” he says.

Perhaps the most important trait of a good CEO, Fero says: “A good sense of humor.”