Jun 08 2016
Designing Credit Union Culture for High Performance
Core values, boundaries, accountability systems, and employee selection are key components of high performance organizational culture. Credit union leaders will need to carefully combine these four elements to define culture at their organizations.
Organizational culture often goes hand in hand with values—the beliefs that guide employees’ behavior. “Good” and “bad” cultures are usually easy to identify. For instance, collaboration and inclusiveness contribute to good workplace culture. Selfishness and secrecy lead to bad workplace culture. This is a good start, but there’s so much more to culture than that.
Culture contributes to much more than discretionary behavior. Culture is not just the feel of a company. It’s the engine that drives organizational performance—for better or worse. And values in isolation do not capture everything that plays a part in a firm’s culture. It’s possible to design work-place culture, and leaders should do so.
Research has shown that “stronger” cultures (i.e., those that are well defined and marked by positive behaviors) are associated with better organizational performance in terms of tangible measures like ROI, net income, sales growth, and cash flow. Name the metric and culture has influenced it. In the absence of policy, culture is what guides decision making.
Why, then, do many credit unions fail to proactively align culture with strategy and its subsequent execution? As cooperatives, credit unions big and small have a competitive advantage in establishing cultures that prioritize member well- being. This is one of the hallmarks of credit unions and it differentiates them from banks, their for- profit counterparts.
Filene thanks its generous sponsors for making this important research possible.