Twenty Five Years as CEO and Counting

The Chairman of CU*Answers announced at the CUSO’s 2019 Annual Meeting that the CEO would have his twenty fifth anniversary this month.

Many important accomplishments could be listed from this quarter century of management leadership. But I would highlight two critical processes that have contributed to this success.

The first is his ability to always plan ahead, not just manage the present moment. An example was the announcement that the cooperatively-owned CUSO will be investing over $400 million in technology spending in the next five years. That fact underwrites the CUSO’s ability to “pay it forward” for future generations of users and their members. The first rule of technology management is that it requires constant reinvestment.

A second factor oftentimes overlooked, is Randy’s unceasing efforts to encourage participation by all the owners and users of the CUSO. This is accomplished by more than traditional cooperative practice of boards, committees and annual meetings. He constantly invents new ways to incent feedback by owners through boot camps, leadership conferences, board planning sessions, and a never ending deluge of emails seeking reactions.

As important as money may be to sustainability, it can never substitute for passion. And participation encourages passion and cooperative pride of ownership.

The Source of Credit Unions’ Soundness

“Our movement does not exist because it was created from the top down. Rather it was created from the bottom up. . . we did not tell Congress we wanted to be “safe and sound” institutions. We always knew that if we were lending to our members, there was risk involved. Serving came first; safety and soundness was a means to the end of serving.”

(Ed Callahan May 1999)

Independence Day Names Only Half the Holiday

July 4th is the grandest of America’s patriotic observances. We celebrate the declaration that the colonies are free from the rule of the British crown.

Freedom is frequently described as freedom from something: fear, want, rule by an external force or exigency.

But freedom from also enables the ability to do something that might otherwise be feasible. It is this empowering opportunity that Ed Callahan as Chairman of NCUA singled out in a speech to the Mass CUNA League’s Annual meeting on November 3, 1984.

Deregulation had freed credit unions from the government’s rule making and oversight of operations and given that responsibility to boards and managers. It had provided a context where credit unions were empowered to make decisions not previously open to them. Ed singled out three new freedoms:

  • Freedom to compete: credit unions now make their own business decisions;
  • Freedom to serve: credit unions now decide who the membership will include;
  • Freedom of security: credit unions have their own unique insurance safety net and liquidity fund.

These freedoms were possible because of the unique cooperative design that harnessed members and credit unions in a interdependent system of self-help and self-reliance. Combining independence and interdependence is what makes the cooperative system unique.

The Rouser at the End

Ed as an old football coach often completed his speeches with a motivational exhortation.

In this case he challenged the attendees to go beyond the rhetoric of people helping people, or reciting the movement’s historical milestones. He stated: “You’ve got to go forward from this time to document that people serving people is not just a slogan, but a reality.” Show your congressman what you have done for the elderly, the retiree, the people moving, the high schoolers, the kids and children.

“We’re all flesh and blood. We turn to our credit union to help us out.”

Freedom enables both independence and interdependency. Collaboration and autonomy. United in cooperative design.

Credit unions are as American as apple pie. They enable members’ financial well-being and to be engaged in a community of peers.

“Independence Day” includes a special irony. For it is not just freedom from, but freedom to do.

And credit unions are a unique example of the fruits that this freedom can produce: social impact and personal fulfillment.

Happy 4th

An Example for Today’s Credit Union Pioneers

In 1925 Michigan passed its first credit union act. A November 21, 1925 brief article in the Grand Rapids Press reported on efforts to implement this new authority with the following lead:

Roy F. Bergengren, Boston Secretary of the Credit Union National Extension Bureau conferred with several business men and Association of Commerce officials Saturday regarding organization of credit unions in Grand Rapids.

The article then describes what a credit union is and its purpose: “to help members and give them good credit standing.”

The final paragraph records a powerful example of the cooperative’s appeal Bergengren used in his talk. “15 telephone girls in Boston organized a credit union with $4.50 in total funds. The credit union now has 13,000 members and $280,000 in total funds.”

From Small Seeds

While learning the immediate reactions to his pioneering proselytizing would require more research, today Michigan has 225 credit unions headquartered in the state, serving over 5 million members and managing $67 billion in assets. Credit unions hold 20% of all financial deposits making Michigan one of the most heavily credit-unionized states in the country.

From a small seed mighty results have emerged. How might Bergengren react to the fruits of his labors almost a century later? With satisfaction? Or perhaps with questions such as:

  • Where are today’s credit union pioneers?
  • What seeds are they planting?
  • What partnerships are they building in their communities?
  • How have the members benefited from the growth of credit unions?

My sense is that he would be asking questions knowing that the answers will condition the future of the credit union movement in Michigan. While brief, the article illustrates several timeless factors necessary for today’s cooperative entrepreneurs who seek to further the work of the original Credit Union National Extension Bureau.

Leonardo’s Horse: A Vision Outlasting Its Creator

Sometimes good, well-conceived ideas do not at first succeed. But if they are truly inspiring, sooner or later the vision will be fulfilled.

Leonardo da Vinci was a Renaissance master, a student of almost every area of knowledge being practiced. A painter, architect, designer of war machines, statues and inveterate keeper of notebooks recording every area his curiosity took him.

In 1482 he was commissioned to create a bronze horse statue by the Duke of Milan to be a gift to the Duke’s father, Francessco Sforza. The statue would be the largest ever cast requiring over 70 tons of bronze and standing 26 feet high.

Leonardo prepared by writing a treatise on horses’ movements, their anatomy and how he might balance a figure in motion, with just two of the four legs on the ground. In 1493 he made a full size clay stature of his design. He developed a unique engineering process described in his notes. The statue was to be cast in two halves and then joined together.

Full details of the sculpture.

Unfortunately, his patron gave the bronze collected for the process to the Italian defenders of the city of Milan after it was attacked by an invading French army. The Italians lost, the clay model was used for archery practice by the French, and subsequently destroyed by weathering.

End of Story?

No, 500 years later a United Airlines pilot and art collector Charles C. Dent read about Leonardo’s vision in the September 1977 edition of National Geographic. He founded a non-profit to bring da Vinci’s vision to reality for his hometown of Allentown, PA. He died before the vision could be realized. His nephew took over the foundation and hired an experienced animal sculptor, Nina Akuma, to explore da Vinci’s drawings to create a fully realized instantiation. Two full size casts were made, one placed in Milan, Italy and the second commissioned by Frederik Meijer. (additional details)

It was this second horse I saw two weeks ago on a visit to the Frederik Meijer Gardens and Sculpture Park in Grand Rapids, MI.

Although based on two decades of Leonardo’s artistic work, it is today named the American Horse. The sight is truly majestic with the entire bronze weight supported by only the two opposite hooves. Its monumental standing is emphasized by the grass and tree sheltered green amphitheater which it alone inhabits.

The Promise of a Vision

Today the credit union vision is just over a century old. There have been almost 50,000 state and federal charters issued, of which 5,440 are still active. The challenge as in the artistic effort to recreate Leonardo’s horse, is what is core to the vision today? What is timeless in cooperative design that endures as it evolves in subsequent environments?

And is the design more than a single expression or does it require a “system” (as in Leonardo’s implementation plan) to support individual credit unions?

Leonardo’s commissioned vision inspired long after its creator and sponsor left the scene. However the vision was so well conceived, that new artistic pioneers were motivated to fulfill the work, albeit in a contemporary context.

This example suggests parallels with the vision of cooperative design. It is well conceived by founders, but requires contemporary creators to ensure its relevance and sustainability for ongoing generations.