IRVINE, Calif.–An entrepreneurial mindset—although it may it really work better at some CUs when thought of as an “intrapreneurial” mindset—can be cultivated to drive growth within a credit union, even in those CUs that often stymie the “passionate and the courageous” employees who are the solutions creators, according to one person.
Speaking to Filene’s big.bright.minds Conference, Dr. Jeffrey A. Robinson, a Filene Fellow who is on the faculty of Rutgers Business School, said “entrepreneurship” is in my blood, and he shared with the meeting strategies for getting the blood flowing within credit unions.
Robinson, who has been involved in a number of successful business start-ups (and who acknowledged there have also been a few not-so-successful launches), said he understands the challenges of cultivating that entrepreneurship mindset inside large organizations, as he often confronts it at Rutgers.
Large organizations, he noted, have both a history and a bureaucracy that can be roadblocks to innovative thinkers and thinking. But those roadblocks can be overcome, he added.
And they can be overcome by looking to the examples of innovative cultures within organizations such as Airbnb and Google, from which credit unions can learn, according to Robinson.
A ‘Jumping Off Point’
“You see the words entrepreneur and entrepreneurship and the first thing you're going to think about is creating a new business,” he said. “And you’re thinking, ‘I'm not in a new business. I'm in a credit union. It's been around for 40 or 60 or 70 years, so how can I be an entrepreneur?’ How can I learn from entrepreneurs who don't do the same thing we're talking about? Well, the answer is there's no definition about entrepreneurship, but I'm going to use one today that we're going to use as a jumping off point to learn some things from entrepreneurs. Here it is: entrepreneurship is the pursuit of opportunity without regard for resources currently controlled.
“This definition allows for creativity, innovation, dreaming and thinking about things outside the box. That's the real gift of entrepreneurship,” Robinson continued. “What you don’t see there is starting a new business. What you see there is a way of thinking about opportunity and that's the heart of entrepreneurship.”
Entrepreneurship, Robinson said, is what enables the extraordinary, and extraordinary things are what are needed by credit unions.
So, how do credit unions encourage that entrepreneurial mindset to achieve those extraordinary things and the growth credit unions are seeking? Robinson said there are three overarching points that offer some direction:
- You gotta think like an entrepreneur
- You gotta do what entrepreneurs do
- You gotta act like an entrepreneur now
He then broke down each of those points.
You Gotta Think Like an Entrepreneur
“Take a look at entrepreneurs and serial entrepreneurs and entrepreneurs within companies, and identify the things that they do that make them successful” advised Robinson, citing research done by Columbia professor Dr. Rita McGath that distilled entrepreneurship down to five characteristics (see below).
Robinson said if the reaction to instilling an entrepreneur mindset within the credit union is, “What do we need to change for?” that’s a “problem.”
While the “best” approach is often in the eye of the beholder, Robinson said the credit union’s focus must switch to execution once it identifies its best opportunities. The goal, he said, is to avoid starting and stopping and restarting projects.
“(Entrepreneurs) say, ‘Let's figure out what we're going to do and let's go for it,’” said Robinson. “And then lastly, and this is the one I love, as I love engaging the energies of everyone in their domain, they don’t just rely upon themselves, they looked around and found the other people who were just as excited as they were and pulled them into the conversation.”
That conversation will need a supportive environment, Robinson told the Filene meeting.
“You must create a mindset that pushes you and your organization beyond mere incremental improvement to entrepreneurial actions that really make a difference,” said Robinson. “That’s what keeps you in the game.”
You Gotta Do What Entrepreneurs Do
If there is one thing leaders within credit unions cannot do, according to Robinson—sit down and relax.
But the challenge there, he cautioned, is that in established organizations many people are accustomed to working on proprietary systems and tools and getting things right before launch. But those comfort levels can run counter to an entrepreneurial mindset, he explained, noting that innovation often requires working within open systems, creating beta versions and then constantly iterating.
All of that can lead to what Robinson said feels like the “clash of civilizations” within an organization.
“Some of you in this room have that voice saying ‘We’ve got to change; without a doubt, we’ve got to move things.’ And other people aren't listening because they're sitting on their backside thinking about how good it is to be where they are and that kind of thing is not going to get you to where you need to be,” he said. “I talked about Google earlier. Google has some really interesting practices. Now, you can't do everything Google does but there are two practices I want to point out that I think are exemplars of what we're talking about here.”
You Gotta Act
Those two Google practices that will help foster entrepreurship, according to Robinson, include:
- Don’t Just Listen to the HIPPOs in the Room. In this case, HIPPOs stands for Highest Paid Person or People. What frequently occurs in meetings, said Robinson, is the hierarchy takes over and participants defer to the highest ranking individual in the room. “If you listen to that person all the time you're not getting the information, the creativity, the innovation from the people who are in touch with the organization, some of those creative minds,” said Robinson. “Remember, pay level does not make one person's opinion more valuable than anybody else’s; it's the quality of the idea not who suggests it. So, one of the principles that Google works on is that everyone's opinion counts, all concerns should be addressed.”
Robinson said ordering people to comply with leaders’ ideas is what creates inertia inside organizations.
- No meeting should be so large two pizzas can’t feed all the attendees.
Five CUs That Are Innovators
Robinson pointed to five credit unions in the U.S. that he said have an entrepreneurial mindset: Affinity FCU, BECU, Coastal CU, DCU and Launch CU. (It’s no accident, he acknowledged, that the original sponsor of each of those credit unions has technology/innovation roots.)
Each of those credit unions, said Robinson, has pursued new and different ideas, including fintech development and investments, by finding the “right innovators” and putting in place practices such as innovation groups, idea incubators, partnerships with external organizations and more.
In the case of Massachusetts-based DCU, said Robinson, it has even looked to hire people who have no credit union experience and then challenged them.
“These are people who don't have the same experience as people in this room but who bring certain life experiences, certain technical abilities,” he said. “They said, ‘Here’s a problem, why don't you try to figure out a solution?’”
Many credit unions have used a similar approach to tackling issues around economic inclusion, Robinson added.
“The (credit unions) that went out and found other entrepreneurs, that network with those entrepreneurs and that collaborated with those entrepreneurs—those were the ones that made it from the launch,” Robinson said. “
In his work with Filene Robinson said he has now spent three years watching many of these new ideas go from ideation to incubation to market, which is what has allowed him to identify commonalities of success.
One of those commonalities, he said, has been getting like-minded people to interact with each other and to network. Many also participate in Filene’s i3 program, he added.
We’re Talking ABC, You’re Talking XYZ
“Entrepreneurs who are acting in these five ways are (the ones who) take us to another level, help us to dream, to imagine things in different ways,” said Robinson, describing such individuals as resilient, courageous and passionate.
But that doesn’t mean they are always rewarded, he said.
“In established organizations we are afraid of these folks. They come off a little strong sometimes. They are really out of the box. Everybody's talking about ABC and they're over there talking about XYZ,” Robinson observed. “They are looking down the road and seeing something maybe you didn't see. Maybe all their life they've heard people tell them no, but they're still willing to get up and do it the next day. Those are the people you want to help you to think differently, to act differently, to do things in a different way. Those are the folks that help you to dream and imagine.”
Robinson urged credit unions to create internal think tanks.
If there is good news, Robinson said, it’s a Filene poll that found 94% of people believe their credit union encourages creativity and innovation.
If that news is tempered a bit, it’s because “that sounds good, but what happens next? When the rubber meets the road how does it get implemented?”
In organizations hesitant to embrace change to the degree it needs to be embraced, Robinson advised perhaps using the word “intrapreneur” rather than entrepreneur.