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It’s one of the hallmarks of credit union philosophy: Credit unions are where people are worth more than money.
That’s not only the case in serving members, but also when credit unions merge. Unifying people toward a common goal is paramount to success.
“Financial due diligence is table stakes,” says Brad Bergmooser, president/CEO at $1.3 billion asset Financial Plus Credit Union in Flint, Mich.
The credit union merged with Wanigas Credit Union in 2022. It was the third-largest merger in Michigan’s history.
To achieve any merger’s goal of providing improved service to members, there needs to be understanding and acceptance by all stakeholders: employees, volunteers, and members.
According to an article in the Harvard Business Review, “when people have actual agency in shaping a change, they are significantly more likely to embrace it.”
At Financial Plus, employees worked together on a rebranding initiative even before the legal merger process was complete. The credit union also sought to help employees find commonalities outside of the merger process by, for example, hosting an in-service day with both teams.
“Common goals and initiatives need to be emphasized,” Bergmooser says. “It’s not possible to overcommunicate.”
St. Jean’s Credit Union, the oldest credit union in Massachusetts, recently merged with three credit unions: Greater Salem Employees Federal Credit Union, Revere Municipal Employees Federal Credit Union, and Lynn Municipal Employees Credit Union.
C. David Surface, president/CEO at the $346 million asset credit union in Lynn, Mass., notes that transparency about the process is critical.
“From a human resources perspective, everyone needs to be comfortable,” he says. “Employees need to understand that mergers are a lot of work. They need to know what the process is and exactly what’s going to happen. No surprises.”
Financial Plus prepared an organizational chart before the final merger to alleviate employees’ concerns and reduce uncertainty. Bergmooser stresses that a job description merely represents what the credit union expects from staff.
“There were no secrets about positions in the new organization,” Bergmooser says. “We understand our employees also have expectations, which is why all of our employees have individual development plans representing their expectations and career aspirations. We encourage employees to be self-reflective and to think outside their boxes on the org chart to see if there is something else they’d like to pursue.”
At St. Jean’s, the credit union also sought to ease employee apprehensions.
“We were upfront with information about what we offered in our employee salary and benefits package,” says Surface. “We honored the time-in-service record at the credit union.”
Each department had a merger team representative who met to perform due diligence and break down any barriers, he says.
‘The CEO is the face of the transaction; the cheerleader in chief.’
A cohesive staff team is necessary for successful mergers, but it’s not sufficient.
“We wanted to be equally attentive to the boards, emphasizing that we’re not abandoning the legacy of directors and their accomplishments but working together in a partnership,” Bergmooser says.
This was especially poignant, as both credit unions were celebrating their 70th anniversaries.
Financial Plus expanded the board to 11 members with positions allocated based on the assets and membership of each partner credit union. Previously, each board had seven members.
Three directors from Wanigas became members of an emeritus board, responsible for overseeing the credit union’s social responsibility and charitable giving program to ensure Financial Plus is gaining and providing the most value for its contributions.
Most mergers are predicated on improved products and services to members. Yet members loyal to their legacy credit union may perceive a loss.
Surface says St. Jean’s worked hard to ensure members felt comfortable with the new entity.
“Members of their municipal credit union were used to being treated in a certain way,” he says. The credit union is adjusting member service in recognition of that.
Bergmooser says CEOs must understand their role and responsibilities in the process.
“The CEO is the face of the transaction; the cheerleader in chief,” he says. “You need to look in the mirror and own it, including any missteps along the way. There will be missteps. You can’t put it on someone else.”