Author Bob Buford makes the case in his book “Halftime” that we have two types of capital to spend.
Economic capital positions us to leverage money and time for activities we enjoy. The focus is on traditional metrics, perhaps set by a regulator or determined internally, and the focus is on “us” or “me.”
By contrast, social capital enables us to reinvest time, money, and knowledge in the community that makes our success possible. To a large degree, the focus is outward and on others.
Buford says the payoff of social capital is blessedness, contentment, and significance.
A CEO’s role includes owning, energizing, and communicating a vision; growing a supportive culture; making good decisions; and delivering performance.
The latter two responsibilities are familiar, so they get more attention. But vision, culture, and values are often key differentiators in a commoditized financial services business environment.
Changes in my role as a leader include making a concerted effort to narrow our credit union’s focus on a niche, reflective of our roots, while redefining and enlarging our vision of how a not-for-profit financial cooperative can add value to the community beyond traditional financial solutions and metrics.
With all due respect to the work elected officials perform, it’s marketplace leaders—you and me—who most influence communities.
It’s our efforts that produce jobs that provide for the livelihood of the people in our cities. We can collectively have substantial impact on quality of life and the resources—financial, intellectual, and otherwise—to address myriad community challenges. In Austin, Texas, these include traffic congestion, quality of K-12 education, workforce training programs, housing affordability, and a host of other issues.
There exists a virtuous circle into which we must inject ourselves. Good communities make for good business!
The founders of most credit unions in the 1930s were, in a sense, radicals. Today we would call them “disruptors” to financial services, focused inordinately more on building social capital than on the metrics we too often focus in the 21st century.
That’s not to say we should discard these traditional metrics, but it’s time to remedy the severe imbalance that has risen in the ensuing years.
Ask any CEO about their credit union and you’ll immediately hear of an asset level, member count, number of branches, and return on assets.
What about how we’re impacting a community: generating lift in quality of education, health care, affordability, traffic, or other measures of quality of life?
Does our value proposition consist solely of commodities, low loan rates, high deposit rates, low fees, and convenience? Are we truly relevant to our communities?
I have had the pleasure of working alongside many credit union leaders from the generation prior to mine on whom I would enthusiastically bestow the title “disruptor.” I have often reflected on how such individuals grew professionally into such roles of great influence, both within and outside the credit union marketplace.
Much of it has to do with their absolute refusal to allow contemporary business challenges and practices to prompt them to set aside the culture and values of their respective organizations as envisioned by their founders.
They refused to compete by aiming solely to serve as a low-cost provider, instead using the not-for-profit credit union platform as a vehicle through which they could effect social change.
Going forward, do we leave it to chance that community leaders will naturally rise up within the credit union movement? Or will those of us in key leadership roles take responsibility for ensuring that happens?
I sense many are coming to the realization we should give this matter attention and are stepping up to make a difference. Are you one of them?
This article appeared in the Summer 2022 issue of Credit Union Magazine. Subscribe here.