ST. PETE BEACH, Fla.–It’s become a mantra—“Culture eats strategy for breakfast”—but it’s also wrong, according to one person who is helping oversee a culture change at the nation’s second-largest credit union and who recommends that culture and strategy instead sit down and have a meal together.
Emma Hayes, chief culture officer at State Employees Credit Union (SECU), shared how the $53.1-billion CU is now attempting to make what is perhaps the biggest shift in its history despite some ingrained cultural practices that haven’t changed in 85 years.
The transition involves a new CEO and a resulting shift in thinking involving everything from the dress code to what SECU’s fundamental service delivery model is all about, according to Hayes.
“You probably heard somewhere along your journey that culture eats strategy for breakfast, lunch, dinner and snack time…” Hayes told the African American Credit Union Coalition’s annual meeting here, with her audience acknowledging they have heard that mantra many times.
That’s when she posed some questions to that same audience.
“If we’re talking about culture and strategy, is there anyone who believes strategy is more important than culture?” she asked the audience, before then encouraging a show of hands of those whose credit unions have strategic plans. Nearly every hand was raised. She then asked, “How many of you have culture plans?” Only a few hands were raised.
“If culture is eating strategy for breakfast, lunch and dinner, but we’re spending all of our time on strategy, we may be missing something,” Hayes said.
Opening Up
To illustrate her point, Hayes shared what has been taking place—and what a big change it has been--at SECU since announcing the hiring of Jim Hayes as its new CEO in August of 2021.
“We hired someone not only from outside the organization—there had never been for 85 years an external hire for CEO—but also someone who came from the wrong coast (the former Wescorp in San Dimas, Calif.) by way of somewhere up north (Andrews FCU in Maryland) to come down to North Carolina to lead the second-largest credit union,” explained Hayes, drawing laughs from the audience. “The strategy for SECU for 85 years had been to grow talent from within. They had done that and done it well. Now they decided to open the organization and take a peek and see if there is someone out there.
‘Never Been Heard of Before’
“SECU runs like a well-oiled machine,” she continued. “But (Hayes) had new ideas for how to do things. One of the first things he did was send an email to all staff. In 85 years, no one who sat in that seat ever sent an all-staff email. In that email he says, ‘Let’s get rid of our ties.’ Imagine the shock and awe! Nobody believed this real, like someone had hacked into his email address. We don’t take off our ties. We sleep in them. We go to the gym in them. It was unheard of! But Jim was like, ‘Let’s do something a little different.’ He then said, ‘I’d love to hear from you. Send me an email.’ People stared emailing him and he responded back. With his own hands he typed out messages! This also had never been heard of before!”
Shaking Things Up
The result, said Hayes, was word began to spread in the state of North Carolina where SECU is a highly visible and well-known brand that the new CEO was “shaking things up.”
“I like to think he was being strategic in his approach,” Hayes continued. “During that time, he also shared what his vision was for the next iteration, the reintroduction, of State Employees. He shared his plan. For 85 years SECU has been known for one thing: providing exceptional service to its members. It is what they do. It is why one-in-four North Carolinians has an account with SECU. It’s why there are 2.6 million members, 270-plus branches, a branch in every county. It is why the people who work for the organization don’t leave; the average tenure is 30 years.”
Emma Hayes, who joined SECU from Local Government Employees FCU in Raleigh, N.C., which has an very strong relationship with SECU, has been a member of State Employees for 30 years herself. She said the changes created a “little rumble” within the organization and community.
At the heart of the transition for SECU was to not turn away from that entrenched branch-based service model, but to supplement it with digital services that would meet members at the place where they have increasingly turned, not just for interactions with their credit union but also with nearly every other provider.
Jim Hayes explained in his vision that SECU would be retaining the things that have worked and driven its growth, according to Emma Hayes.
“The only reason to reinvent yourself is to remain relevant. It is to know all of the things we have done for the past 85 years won’t necessarily be the same things we need to do to remain relevant for the next 85,” Hayes said. “All of those branches and ATMs…are who we are. But we also know there are disruptors out there. All of those new fintechs waiting to snatch up your members. Ours, too. So, we have to think about our new strategy, our new approach, how to reinvent ourselves.”
Getting ‘Squishy’
And to do all of that SECU had to address all of the issues surrounding culture and strategy.
“Strategy is tangible. You can see it. You wrote it down. It’s in that 200-page document you created that no one is going to read,” she said. “But those goals help us to understand the measures we are going to use for success. You can touch and feel it.
“Culture on the other hand is not tangible,” she continued. “Unlike strategy, culture is often not written down. Unlike strategy, culture isn’t logical, it’s not rational. It’s quite the opposite. Culture, to use a technical term, is squishy. It is an accumulation of behaviors. It is a collective mindset. It’s all of the assumptions and unwritten rules we have inside of our organizations.”
Hayes acknowledged that many in the audience would say they do adhere to their strategies and follow polices and procedures to a T.
“You’re probably also the ones in the ties,” she said, drawing more laughs. “That’s not how culture works. Culture is cultivated the very first day a person walks into the organization and meets the person who will be teaching them how we do what we do. When they say, ‘I know what’s written down, but here’s how we really do it,’ that’s culture.”
Culture, added Hayes, can be summed up by saying, “It’s just human. Culture is the difference between what we say we do and what we really do.”
‘It’s Hard’
So, why aren’t more credit unions focused on the culture? The reason is simple, she said, but not easy to resolve.
“Because it’s hard! It’s all about people. How many relationships have you been in where you’ve said, ‘Oh, this is easy.’ You get out what you put in,” Hayes explained. “For the most part, nobody wants to work on it because you have to deal with people. A lot of people want to be in leadership positions, but they don’t want to work with people. People come with experiences, with trauma. Most leaders don’t want to work with culture because they are logical and rational. It’s frustrating.”
SECU has 7,300-plus employees, and that, said Hayes, means 7,300-plus experiences, 7,300-plus personalities.
“It can be overwhelming to deal with,” she admitted. “That’s why culture is often discounted or we dodge it altogether…But if you are having trouble implementing your strategy , it’s because your culture isn’t aligned. So, we have to decide where we are going to spend our time and energy.”
‘Something Totally Different’
In the case of SECU, it’s culture is eight-plus decades old, but to move forward toward the next eight will require “something totally different,” she said.
“So, while culture could eat strategy for dinner, why not have them both sit down together for dinner? You can’t do strategy well without a complementary culture,” Hayes observed, noting SECU’s new CEO is pushing the credit union to be innovative and agile and to introduce technologies in new ways.
“If you’re culture is stagnant and stale and rigid, that strategy is not going to work,” Hayes said. “What do you need to have for your innovative, agile strategy to work? An innovative and agile culture. How do you build it? You build it by allowing people to fail fast and fail forward. That means you take that failure as a learning opportunity. You don’t punish them for bringing their ideas to the table. That’s the quickest way to stifle innovation.
“Next, you have to have a diverse culture, because if you have everyone at the table who thinks, behaves and believes the way you do, you have one single thought,” Hayes continued. “No innovation, no creative is going to come from that. You need diversity of perspective, of thought. You need people who are going to be curious. You need, ‘Hey, what if we tried…?’ That’s how you create a culture so that strategy becomes the right course. That culture has to be inclusive.”
When culture and strategy are aligned, “culture embraces strategy,” it doesn’t eat it, according to Hayes.
“Your execution then becomes scalable, repeatable sustainable. That’s why your culture can be your competitive advantage,” Hayes stated.
How to Start
So, how does SECU or any credit union get to that point?
“You have to put in the work,” said Hayes. “You start with communicating what your strategy is. Where do you want to go? Then, before you start moving, assess the appetite your culture has for moving in that direction. One of two things has to happen: you have to align your culture with your strategy, or change your strategy. That alignment will include the attitudes and behaviors of the people who will be responsible for executing. It is a requirement for culture to really be effective that the people at the top model the behavior they want across the organization.”