LAS VEGAS–A credit union that has made a significant investment in internal leadership training said it is seeing the ROI.
“We all have leaders who know how to do the transactional stuff; that’s where we spend most of our time,” said Michael Poulos, CEO of the $800-million Michigan First Credit Union. “But we are spending our time on the transformational side. We think that has the most impact.”
To create transformational leaders, Michigan First has created an internal Leadership Academy that includes a partnership with the Lincoln Leadership Institute in Gettysburg, Penn., and with Michigan Business Consultants.
Michigan First CU's offices.
The 'Facts' of the Matter
In remarks to the Directors and CEOs Leadership Conference here, Poulos said leadership is about “influencing others to increase their level of performance and results through effective coaching, training, mentoring and role modeling. And the good news about all that is those can be developed in anyone.”
Credit unions on the fence about their own leadership development should consider these “facts,” according to Poulos:
- Organizations win or lose based upon the quality of their leadership.
- Every credit union needs stronger relationships. “Most leaders receive very little leadership training. The higher you go, the less you receive. What’s interesting is that most of the training they receive has little to do with leadership; 65% has to do with compliance/operations. Thirty-four percent has to do with sales. One percent is leadership or other types of training. It’s unfortunate, as it really ought to be reversed. That 1% is where we lose most of our money.
- Periodic seminar type training is not sustainable. “People are often not held accountable. We ask what they learned, but we don’t check up a month or two later.”
- Most boards focus only at the executive level, as most consider themselves to have only one employee, the CEO. “But the reality is boards have a responsibility for the entire organization.”
- Leadership training is not inexpensive. “But you cannot afford to not do it. It cost our credit union about $250,000 over the first two years, because we had to put our entire leadership through the training. Going forward it will cost us about $100,000 a year.”
The Big Questions
Poulos said the biggest question that gets asked when making such an investment is what happens if money is spent on training and the employee leaves.
“The question we should be asking is, ‘What happens if we don’t train them and they stay?’” he said, pointing to the Richard Branson advice, “Train people well enough so they can leave, treat them well enough so they don’t want to.”
Poulos said a mistake many CUs make when the economy or local market conditions get tough is to cut the marketing and training budgets. “I would suggest to you you should do just the opposite.”
When a prospect joins the credit union and chooses to then leave, Poulos said the reason is usually due to their “leader.”
“Employees join organizations, they leave leaders,” he said. “You should focus your investment dollars on having leaders that people don’t want to leave.”
Poulos said there are four overarching reasons Michigan First has built the Leadership Academy program:
- Enhance leadership capabilities
- Implement leadership best practices
- Support succession planning. “This was critical to us. We’re a growing organization. Not everyone is going to stay in the same chair forever, including the CEO. You want to develop people before the position is available.”
- Implement replacement mindset. “One thing we discovered was that some of our leaders didn’t want anyone else taking their job? So what were they doing in terms of training someone who might replace them? Not necessarily a whole lot. It was one of those things no one ever talked about, but I can guarantee you it exists in your organization.”
The View From HR
Joining Poulos in Las Vegas at the Leadership Convention to talk about the credit union’s leadership program was Patty Jones, Michigan First’s chief human resources officer.
Michael Poulos
Jones told the meeting that “one of the things we realized early on was we did not have the internal capability to build our own program from the ground up.”
To that end, Michigan First went first to Michigan Business Consultants, whom she called an instrumental partner that has led to its three-year program.
“They understood our strategy and culture and visited our branches, they called our call center, before they engaged with us,” said Jones. “We began by working on what we wanted the outcome to be.”
Who attends the program? All leaders and aspiring leaders who have been identified as such at Jones, including the CEO. “That says a lot when the CEO attends,” said Jones. “What we mean by aspiring leaders is certain criteria must be met. You have the willingness, the capability and the potential to be an aspiring leaders.”
Jones said Michigan First focuses on three areas of need: Leadership skills, technical skills, and communications skills. “We have no idea when people come into our organization what they bring. We didn’t want to make any assumptions, so we start at the same base level with consistent training.”
What The Training Includes
When it comes to leadership skills, the training includes, according to Jones:
- Communication and Relationship Building. “These are the most critical elements for your success.”
- Coaching and Handling of Difficult Team Members. “No one in this room has not had a difficult team member. They are challenging. It’s not the most fun thing you’ll ever do. We’re not trying to make it fun, but we are trying to make it easier for our leaders to be able to handle difficult team members. Some may show up for work every day, but can they do the job?”
- Delegation and cross-training. “All of you don’t have time to do your own things in your day, much less time to do for others, so you have to learn to delegate,” said Jones. “Make sure your leaders are cross-training others on the team to do their job. Michael and I are out of town this whole week. Should business stop? Do you think our members care? No.”
- Performance Management. “We talk about this in the lifecycle of a team member. We like to look at people joining us for a career, and not just a job.”
- Managing Change. “If you are not good at managing change, how can your team members be?”
- Credit Union Finance. “How many of your team leaders and members can read a balance sheet, understand ratios, understand how they contribute to the bottom line?”
- Legal and Business Ethics. “Please do not try to do the job of the lawyers. We train our leaders on when they should get involved and when they should not get involved. They may try to do right thing and not get HR involved. I tell them we don’t want to get legal counsel involved.”
- Leadership Code of Conduct. “For the first time in my career, I work at a place that has a written Code of Conduct. We hold people accountable, and you should to,” said Jones. “New employees sit with Michael and we talk about how the leadership team is one unit. People sign a Code of Conduct on how to treat one another.”
At Michigan First teams that are part of its Leadership Academy meet one day a month for 10 months during the year. The program includes textbooks, exercises, videos and homework. There is interactive role playing, hands-on assignments, individual presentations and group projects, said Jones. There are also individual development plans for all participants, including pre- and post-testing.
Technical Skill Training
Word, Excel, PowerPoint and Business Writing skills are expected of all participants. “The texting world has killed us with punctuation and grammar,” observed Jones.
Communication skills training includes a Michigan First Toastmasters Club. Everyone in Leadership Academy is required to attend twice a month, and must participate in all club roles. Employees are expected to achieve Competent Communicator level in three years (three speeches per year, 10 overall). Club leadership is rotated each year.
Poulos said one thing learned after going through the Academy was there was a lot of personal growth evident, but something was missing, and that was a deeper connection.
To that end, Michigan First partnered with the Lincoln Leadership Institute and sends groups of 10 employees at a time to participate in its three-day program in Gettysburg, Penn., including time on the famed battlefield.
“It’s an experiential and reflective leadership opportunity,” said Poulos. “Time is crucial. It’s important to get away and think and reflect. Gettysburg gives us an opportunity to do that in a greater way. It is expensive, but it’s life changing. It’s a capstone experience in our training.”
After two years of the Leadership Academy, 68 have completed first year of Leadership, and 38 have completed the technical skills training.
The more important results, said Poulos, have been lower turnover; fewer team member issues with leaders; increased leadership and cross-functional team comradery; greater organizational appreciation (“team members like it when you invest in them”); a common base of training and organizational language; and continuous learning has been reinforced.