What to avoid

Stay level-headed and focus on steps the credit union must take to operate effectively and continue serving members.

During a crisis, boards should avoid engaging in certain actions and mindsets, including:

► Getting into the weeds. With the increased amount, frequency, and detail of information, board members may start to focus on operational decisions rather than the high-level policy decisions they’re tasked with making.

“When you get more information, you get more heavily involved, and there’s a temptation to get right down in the weeds and start making decisions,” Smith says. “The board should be careful and resist that temptation.”

► Making assumptions. Avoid confusion, ambivalence, and making assumptions about the credit union’s readiness.

All of these elements could negatively impact how members perceive the credit union during a crisis, which could have a long-lasting impact once the crisis has passed.

“The board should never assume the credit union is adequately prepared,” Fox says. “Lost member confidence is almost impossible to regain, so be decisive and keep them informed.”

► Seeking perfection. Crisis situations call for fluidity in decision-making, Ferris says. As circumstances change and leadership receives feedback, plans can—and should—be revised.

Given the uncertainty of a crisis, it’s unlikely the first solution will be perfect. The board must realize and accept that mistakes will occur.

“Stay focused on overall objectives, but avoid paralysis by analysis,” Ferris says. “Create a combined trust for open and honest communication, and avoid the notion that decisions have to be perfect.”

► Having false confidence. Even during a noncrisis environment, boards receive a lot of information. The amount of information increases substantially in a crisis.

Make sure the board understands the information, how it connects to the credit union’s strategy, and what implications it has on the credit union.

“False confidence can be created through thick reports,” Ferris says. “Large amounts of data don’t necessarily result in a true understanding of the key aspects involved in a particular situation or decision. The board should require that key assumptions, themes, and potential failure points are explicitly drawn out for transparency and deliberation.”

► Entering panic mode. Panicked decisions are made with the part of the brain that controls the limbic system and not the neocortex, where logic and reasoning functions occur.

“Staying calm will allow a board member to make clearer decisions,” Harrington says. “Avoid panic, avoid ‘awfulizing’ things, and avoid thinking this is the end of the world.”

Instead, the board “should strive to provide a calming presence, a balanced perspective, and strategic direction,” Fox says.

► Waiting for normal. With a crisis like COVID-19, boards need to avoid the temptation to think the credit union will “return to normal” and resume pre-pandemic operations, Smith says.

“There is no back to normal,” he says. “This could be an opportunity or it could scare the heck out of some organizations and boards. Be open-minded.”

This article appeared in the Fall 2020 issue of Credit Union Magazine. Subscribe here.