By Sarah Snell Cooke
VIENNA, Va.–A little more than 14 years after Cutler Dawson moved his “Don’t Tread on Me” flag into the corner office at Navy Federal Credit Union, he has now packed it up with his recent retirement.
When he began as president/CEO at Navy Federal, upon retiring as a Vice Admiral in the Navy, the credit union was the largest in the world at $22.5 billion in assets. Today, it remains the largest by a wide margin at $97 billion in assets; the next largest credit union is $38.6 billion SECU of North Carolina.
That growth came from one simple focus: member-centric service. Late-Navy Federal Chairman Vincent Lascara was known for stating, “Navy Federal doesn’t grow for growth’s sake. It grows because of exceptional member service.” Dawson said he believes he’s carried on that tradition through his entire Navy Federal career, including fronting paychecks for members of the Coast Guard who have been caught up in the current partial government shutdown.
Dawson developed leadership skills early in his career. He was the youngest in the Navy at the time to command a ship at the age of 27 – four in fact, according to one report.
“Skills and practices I learned in the Navy, like leadership, transfer well anywhere, but I had a lot to learn about lending, savings and service in general,” Dawson explained. “It was the professional staff that inspired me and kept me here.”
Risk-Based Lending
Dawson recalled one of the first changes he made at Navy Federal was to offer risk-based pricing. At the time, many credit unions still offered one loan rate for all members. Risk-based pricing categorizes members of various credit scores, allowing lenders to price loans accordingly to the estimated risk and safely make loans to more members who may not have access to reasonably priced credit otherwise.
“That’s proven to be a very significant decision,” Dawson said. “Our lending portfolio grew from $10 billion when I joined to $72 billion today.”
The members have to be foremost in a credit union’s thoughts, Dawson said.
“I think the biggest challenge has been that we have to continually look at what we do through the lens of our members, because if you’re not careful you can stray toward what’s convenient or easiest for the credit union to do,” opening the door for large banks to swoop in. “But, if we can view it from the eyes of the members, we’re going to beat them every time.
‘Our Members are the Mission’
“Navy Federal developed a new tag line: ‘Our Members are the Mission. That helps ground us in a lot of different ways,” Dawson explained.
Navy Federal is experiencing above-peer membership growth at 10.25% as of September 2018, according to data from the National Credit Union Administration.
The tactics Navy Federal used to add those members and keep them coming back included significantly reduced call center wait times, increasing the number of branches from 100 to 328, expanding to serve all branches of the armed services and veterans, and taking advantage of mobile banking early on. “We knew a number of years ago mobile and digital offerings were going to very important,” Dawson said, particularly with Navy Federal’s highly mobile member base. “We went about building apps and we’ve been impressed with the take up. It’s our number-one channel.”
A financial institution could have the greatest apps and service in the world, but it’s meaningless if no one knows it exists, so Navy Federal also made a concerted, nationwide marketing investment, partnering with Fitzco, an Atlanta-based agency, on the advertising is now runs nationally.
“We had to let the members know we were there,” Dawson said. “It took a little time, but when they did it really ran. The Army is now our number-two source of membership.”
Taking Care of Staff
Taking care of its employees is also part of taking care of the members, Dawson asserted. The credit union upped its 401(k) match to 7% for all employees and introduced the President’s Challenge, in which employees are rewarded for making healthy choices.
Navy Federal also rotates employees to various departments, so they obtain a wide swath of experiences and identify opportunities for professional development.
“We help leverage and grow careers,” Dawson said. “Our thinking at Navy Federal is the more exposure we can give people to different parts of the credit union, the better off we’ll be.”
The combination of all its efforts for employees has earned Navy Federal a spot on the list of Fortune 100 Best Companies to Work For eight times.
The New CEO
Dawson considers Navy Federal’s laser-focus on member service a hallmark of his Navy Federal career and said he’s certain he’s leaving the credit union in good hands with incoming President/CEO Mary McDuffie.
“Mary is terrific, and she is absolutely the right person to be my replacement.” McDuffie has served Navy Federal in various capacities, most recently as chief operating officer since June 2018. “She’s got the background and strategic vision that looks forward,” Dawson continued.
Even though Dawson is retiring from Navy Federal, he doesn’t plan to stop working. He will perform consulting work for all types of businesses and is working on a book to come out at the end of 2019. He’s also making time to check a few things off he and his wife’s bucket list, from skiing in Sun Valley, Idaho, to yoga classes at the YMCA.
“As I leave, I’m very grateful to Chairman Vice Admiral (Ret.) John Lockard at Navy Federal. Here’s a man who’s dedicated his life to the credit union and served for 25 years as its chairman for no compensation. He’s led a credit union that’s very supportive of the members and employees of Navy Federal,” Dawson said. “I’m also very proud of employees at Navy Federal and thankful for their kindness and support for the last 14 years. I’m very proud of them and proud to be part of their team."