May 19 2010

Employee Voice and (Missed) Opportunities for Learning in Credit Unions


If a tree falls in a forest and nobody is around to hear it, does it make a sound? The surprisingly simple question provokes daily debate among philosophy professors. But it also burrows to the heart of a serious credit union management challenge: If an employee has a valuable idea but nobody is around to hear it, can it make a difference? More critically, if the right person doesn’t hear it, will it make a difference?

Formal reporting mechanisms aren’t very good at getting ideas to senior leaders. Instead, the researchers show that active solicitation and good follow- up are the best ways to encourage voice. They also show that managers’ actions and behaviors play a much stronger role than employee attitudes or demographics in stimulating voice. Leadership really does matter.

In addition, the researchers describe several interesting (and some troubling) findings:

  • Demographic and psychological variables—including age, gender, tenure, and even education level—do not correspond with idea quality; in other words, good ideas come from everywhere.
  • Sixty-one percent of people indicated that they had more ideas than what they ultimately communicated to their supervisors.
  • Formal upward reporting mechanisms are less efficient at getting ideas to senior leaders; instead, leaders who actively seek ideas, demonstrate openness, and follow up tend to elicit more voice.
  • Employees may need coaching to guarantee that they present ideas effectively, for example, by “selling issues” in economic or stakeholder terms and by choosing effective tone and language.

Whether your credit union’s focus is expense control, membership growth, new business lines, or greater market share, good ideas that are voiced, heard, and implemented are the key to competitive advantage. Without those advantages, credit unions can only offer commodity products and rely on members’ goodwill—not a winning strategy.

Report Number 209