Today, Randy Karnes passes the CU*Answers CEO’s reins to Geoff Johnson after twenty-seven years as the cooperative’s leader. The CUSO has reached new heights by every performance criteria in these three decades. Most importantly it has created a novel network business model combining the unique advantages of cooperative design with the strategic opportunities enabled by technology.
This interview is part of a longer conversation in CUSO Magazine, which I encourage you to read in full. Randy’s insights, beliefs, contrarian style, and enthusiasm are all captured in this dialogue.
The following selections reflect these qualities. I believe his observations are relevant for all credit unions today and as far into the future as we can hope.
What Drew You to CU*Answers?
What really drew me was that CU*Answers was a manufacturer—of software, of copyrights, of solutions, et cetera— and as a manufacturer, we have a different perspective than a retailer. Now I don’t have a problem with retailers. Walmart’s an excellent retailer, but when you go over to Walmart, you’re selling somebody else’s bubblegum. Being a manufacturer and having that creative opportunity was big to me. And that was exciting here. I’m not sure I would have come if it was a co-op and just a retailer. Retail is a very valuable business, but that’s not at the core of who I am.
What have you enjoyed the most about being CEO at CU*Answers?
Well, I would have to say the collaboration and the cooperation to have a customer-owned business and the chance to make that concrete and real. Because the truth of the matter is being a cooperative is such a subjective thing. What is a customer-owned business? How does a customer-owned business work differently than a traditional business? What does it mean to be so transparent that you would tell your client everything? What does it mean to really worry about the client’s agenda as your own?
Co-ops are not just about building a business to sell things to people. They’re also about building a business with people who buy your things. In a co-op the concept is you share everything. You don’t hide any of your pimples, any of your wrinkles, any of those kinds of things—both sides work together just to improve. Most of the time businesses avoid inconvenient truths. Our business model is to share inconvenient truths as much as we share happy truths.
So, the constant evolution in a cooperative environment was such a challenging business problem. To me, it became the most rewarding thing we worked on. There are tactics and there are strategies. Anyone can be good at designing a platform or technical solutions. Anyone can do that or sell that. The missing ingredient is when you say you’re going to build a cooperative with your customer. And not just market it, but make it real—that’s a daunting challenge.
You’ve seen a lot during your tenure–what has surprised you the most about the path our industry has taken?
I’m truly surprised by how easy our industry has given up its differential. Today’s credit unions are wonderful. They’re doing great things and they have a lot of capability. But I feel that they’ve lost sight of their uniqueness and the way we do things. We’ve allowed our vocabulary to merge with banking. We’ve allowed our way of motivating consumers to be too close to how banks motivate consumers. The world is just merging wonderful differences into a gray blob, and I thought that some of the credit unions out there would have fought that with all their might.
So how do you think credit unions should go about fixing that, to keep from becoming one big, homogenous blob?
We have to start focusing and searching on what needs to be truly different, not just truly successful. Let’s say someone says to me, “You’re different, but you’re never going to be a success.” Well, if I’m different, maybe I’m already a success. I’m not just doing it like the next person, I’m not just giving into status quo, I’m not becoming part of the lowest possible denominator. I’ve got a spark. I’ve got something new.
We need a bigger focus on saying we’re different, and not just saying it, but proving it. You can’t just say you really love people. Everybody loves people. You can’t say you give good service. Everybody gives good service. We’re going to have to find a unique differential. Many of the places that I eventually got invited in to, they invited me because I was a weirdo and I spoke differently. Maybe it’s time for credit unions to be weirdos again.
His comments about future plans and more truisms are in the complete interview. You can access it in today’s issue of CUSO Magazine.