Category: Cooperative Design

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A Coop Veteran on Opportunity

Randy Karnes led CU*Answers and its affiliates for over 25 years as CEO.   Combining network strategy in the Internet era with cooperative design was critical to the CUSO’s strategy.

He has stepped back from the CEO’s role and is heading to retirement.  He continues to share thoughts on what makes credit unions and CUSO’s successful.

Seeing Opportunities Within and Without

How do leaders rally their teams to moments of opportunity? Drive themselves to see others’ initiatives in a system as part of their own?

There have been times when inventorying the business problems in a marketplace was the right play to call out opportunity.  But when defining problems becomes more debilitating than inspiring as opportunities you have to change gears. 

This is a market of opportunity for employees and professionals – to open their eyes to the chance to be more.

Show everyone around you how to engage for opportunity, that they are the solutions and entrepreneurs with spirit.  Engage…..and corporate tricks like mergers, re-organization, and internal gambits will be far less inviting.  Engage your team one task at a time and watch your confidence in the way forward grow.

In my entire career I have never seen a marketplace so ready to reward people who are simply positive about the opportunity all around them. 

Cooperative Governance and Advisory Boards

Cooperative Business Designs and the drive for customer-owner governance:

Can 7 directors  (CU or CUSO) be seen as credible for 100,000 customers, 12-24 business lines, multiple product/service distinctions, and the intensity for cooperative passion? 

Our niche (cooperatives and credit unions) doubt it every day in pushing back against our competitive model.   But do we push back with actionable and tangible examples that overcome the issues?

There is a reason that Jim Blaine (SECU) had nearly 300 advisory boards – perception matters – the design and the faces of governance matter.  That is fundamental to a network’s success.  Our governance should be a meaningful platform for our competitive advantage and distinction.

This is not to say that there is a size limit for cooperatives. Rather this is to say that scaling governances, delineating the passions applied, and marketing customer-owner leadership closer to the delivery of the value, are the key to everyone’s seeing that cooperatives are different, no matter the size.

 

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An Opportunity for Credit Union Disruption

Multiple stories have reported banks closed 2,927 branches in 2021, a 38% jump.  The troubled  Wells Fargo closed 267, closely followed by US Banks’ 257.

Even with  recent efforts to align with FinTech startups or other virtual entrepreneurs, credit unions have traditionally followed a “second to market” strategy in their growth efforts.

They have done so using a disruptive model, offering products or services that are better, faster or cheaper than existing providers.

When many think about disruptive efforts, their focus is on technology or other innovation. Two classic examples are digital music downloads replacing compact discs.  Recently Zoom has emerged as a huge disruptive innovator during the pandemic, owing to its modern, video-first unified communications with an easy and reliable performance.

The more classic disruption described by the Clayton Christensen, the author of this business concept, is not about new technology but targeting vulnerable market segments held by dominant firms. This  is the classic definition:

Disruptive Innovation describes a process by which a product or service initially takes root in simple applications at the bottom of a market—typically by being less expensive and more accessible—and then relentlessly moves upmarket, eventually displacing established competitors.

Tapping Undesirable or Ignored Markets

For many credit unions a crucial competitive advantage is local presence and reputation.

They serve members ignored by incumbents who typically focus their products and services on their most profitable customer base.

Closing branches and exiting markets which banks no longer see as attractive can open up opportunities for credit unions. From these market footholds,  they can then move upmarket eventually displacing the original established providers.

Most credit unions establish new footholds by stressing superior service and local commitment.   These bank branch closures may open up new opportunities employing  classic cooperative advantages.

FinTech Innovation may be more fun and sexy to talk about.   But credit union growth has typically followed traditional disruption design.  Are these branch closings happening in your market area?

 

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BON MOTS II for Friday

A member comment on the Proposed Merger of WarCO FCU and First Financial:

The merger may appear to be a financially good move as First Financial of Maryland FCU has more assets. However, the documentation indicates the Pocomoke location “will remain open for a period of time.” There are no First Financial of Maryland FCU’s located on the Eastern Shore. Therefore, all work will need to be done electronically and one most likely will no longer be able to walk into an office anymore.  Brian Cook, Member, WarCO FCU

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“You have to pick the places you don’t walk away from.”  Joan Didion

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Jim Blaine: I think one of the ideas which used to ring true was the thought that trying to compare CUs to banks was like trying to compare Ralph Nader to GM because they were both in the car business….any attempt at comparison doesn’t really make sense…entirely different purposes. Credit Unions should never be “comparable” to banks; it seems a useless exercise…CUs should provide the “contrast” to banks. ( January 2022)

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 Jeff Bezos: If you’re competitor focused, you have to wait until there is a competitor doing something. Being customer-focused allows you to be more pioneering.

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Ed Callahan: “The only threat to credit unions is the bureaucratic tendency to treat them, for convenience sake, the same as banks and savings and loans. This is a mistake, for they are made of a different fabric. It is a fabric woven tightly by thousands of volunteers, sponsoring companies, credit union organizations and NCUA-all working together.“  (Chairman, National Credit Union Administration, April 1985)

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Samuel Johnson  observed that “what is written without effort is generally read without pleasure.”

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Weekend reading recommendation: The Fed’s Doomsday Prophet Has a Dire Warning for Where We Are Headed.   The article illuminates the distinction between traditional consumer price inflation and asset inflation (S&P index up 47% the last two years) and the consequences for our political economy.

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Finding Qualified Employees-A Case Study

The $10.6 billion Alaska USA FCU operates branches in four states to serve its 712,000 members (September Call Report).

The distribution of operations includes 27 locations in Alaska, 12 in the greater Phoenix area, six in California and 22 in Washington state.  Total employment (FTE’s) is 1900.

Currently its web site lists 240 openings for credit union jobs.   Twelve pages with 20 positions each.  That is a vacancy rate of 12%.

The number of openings poses questions such as: What is the impact on member service?  How do these vacancies affect its current capabilities?  Are the open positions in one area or throughout its network?  Is this just another example of labor shortages across the broader economy?

A Simple Truth

In the credit union’s web site “About” section, their origin story begins:

In 1948, fifteen civil service personnel gathered in Anchorage’s Alaska Air Depot, pooled their savings and their conviction in one another, and formed a member-owned credit union.

At the heart of that decision was a simple truth—local financial institutions simply could not or would not support the credit needs of the personnel who had been recently transferred to Alaska.

This “truth” raises another possibility:  As Alaska USA’s operations  expand beyond Anchorage  throughout the Western United States, has this lessened their “local” advantage for  attracting employees?  What will be the impact of going Global?

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Situational Awareness, Leadership and Looking Ahead

As leaders celebrate the known wins in the books for 2021, there is also the need to anticipate what lies ahead in the New Year.  Will it be better or worse?  More of the same, or changes planned?

One approach to this forward-looking exercise is situational awareness, sometimes abbreviated SA.

The concept was developed primarily by the military.  It is a skill to improve one’s ability to identify potential threats, be more ‘present’ and aware of your surroundings in combat.

The term has also been used to analyze danger in various worker environments where the potential for accidental injury is great.   Some even apply the concept to personal safety where one might be at risk such as traveling in an unfamiliar neighborhood at night.

Situational Awareness in Sports

A frequent reference to this ability to react in a situation is sports competition.

Success does not always go to the strongest or fastest athlete, but to those that have a superior “feel for the game.”

My son-in-law played offense tackle for Stanford when the team was coached by Bill Walsh, a former NFL coach,  considered a master offensive tactician.

Walsh would always script his team’s first offensive drive with 6-8 set plays so that he could see how the defense reacted.  Based on what he learned would determine how he then approached the overall game plan previously drawn up.

In basketball one of the elite players at every level was Bill Bradley who played at Princeton, for the New York Knicks as well as being the only collegiate player selected for the 1964 US Olympic team in Tokyo.

A description of his extraordinary sense for the ever-changing dynamics of the game is described in A Sense of Where You  Are, the story of his senior year at Princeton and his preternatural feel for the game.

In choosing the title, the author quotes Bradley:

“When you have played basketball for a while, you don’t need to look at the basket when you are in close like this,” he said, throwing it over his shoulder again and right through the hoop. “You develop a sense of where you are.”

At one point the author takes Bradley to a Princeton ophthalmologist to see if his skill is due to an expanded range of peripheral vision versus a normal person’s.  The tests show he has both greater horizontal and vertical  range.   But that does not explain the instinctive way he applied his talent.  That analysis takes the rest of the book!

For many their first experience of situational analysis is when a teacher claims to have “eyes in the back of her head” so you had better be careful what you do.

Situational Analysis Applied in Business

The Wharton Business school offers an online course which applies the theory and practice of situational analysis to business and political leadership.  The initial lecture and course description is here.

The course extends the concept  beyond its military and industrial origins to understand what happens in organizations. How do critical elements in the environment  change over time?

Many  neglect this analysis because they’re so focused on a particular plan or task that they take for granted essential factors in projecting the near future.

It’s a mindset of not paying attention to one’s surroundings.   Or as the British writer George Orwell observed: “People can foresee the future only when it coincides with their own wishes.

Increasing Awareness

Situational awareness identifies the elements in the environment that are important, changing and create greater uncertainty about the near future.  No matter one’s experience in a  role,  understanding the total environment in which the organization functions is critical for effective leadership.

This analysis is front and center in New Year predictions. Or necessary anytime a future course is being planned.

The Wharton program suggests using a four-quadrant model to identify situations that are important and unimportant, and familiar to unfamiliar.

The critical events are those that are important and unfamiliar, the upper right quadrant below.  The goal is to be more aware of these challenges and take care to understand variable risks, uncertainty, what is moving around, and how to respond.

What to Place in the Critical Quadrant?

My list of evolving situations that the credit union system may need to consider differently from their 2021 experiences includes:

  • Increase in inflation and the inevitable rise in market rates.
  • The growing divide between well-to-do members and those living only on each paycheck’s income.
  • The system’s absence of new entrants/entrepreneurs: the ratio of charter cancellations to new charters, is at 50 or 100:1 depending on the year selected.
  • Effective investment of surplus capital-buying banks or mergers versus organic growth to benefit the members.
  • Finding and developing the best employees when 40% of the work force wants to change jobs.
  • Overcoming the  gap between regulatory actions and credit union priorities  to design a mutual  approach to cooperatives’ future.

How any team completes this exercise depends on their role in an organization.  For those at the top, this analysis is most critical.

Bureaucracies by design are bound by organizational processes.  When complacency and habit replace vigilance, that is how an organization gets into trouble.   Situational awareness is critical to counterbalance this self-approving tendency.

Tomorrow I will provide an example of one credit union’s pivot in response to some of the factors above.    I will also share a classic example of robotic performance damaging a critical cooperative institution.

 

 

 

 

 

 

 

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A Finnish Co-operator’s Suggestion for U.S. Credit Unions

The following observation is from Leo Sammallahti, Marketing Manager for the Cooperative Exchange.   He follows cooperative enterprises in Finland, Europe and the United States. His article suggests a specific investment credit unions can make to help another cooperative effort in the US.

“There are many examples of new legislation seeking to help cooperatives.  But  first we in the movement should  try to find ways to utilize the existing legislation better. Before illustrating this existing opportunity, I want to present something extraordinary happening in Iowa City.

Taking on a FinTech

In 2018, the local food delivery app in the city was bought by Grubhub, which already controlled more than half of the market in the US. They doubled the delivery commission from 15% to more than 30%, wreaking havoc among the local restaurants.

John Sewell was one of those restaurant owners, but he had also worked in  organizing purchasing cooperatives and similar arrangements for rural hospitals. He started an initiative that grew into Chomp, a cooperative food delivery app owned by the local restaurants.  Chomp takes a modest commission and distributes any surplus generated back to the member restaurants.

By the end of the year, it had outcompeted Grubhub with twice as many restaurants on its platform. It became a sort of mass movement with the majority of the residents using it. Rather than a global monopolistic rent-seeker, it transformed the model into a local democratic institution creating community wealth.

Typically, each local market has one delivery platform that with a leading market position – most likely Grubhub. Restaurants join the platform with most customers and customers join the platform with most restaurants.

These “network effects” drive platform  businesses models like food-delivery apps towards a “winner takes all” outcome. These kinds of monopolies and monopsonies are exactly one of the market failures cooperatives counter and fix.

Once a for-profit company app gains a dominant market position, its incentive is to extract as much value from the restaurants for the shareholders as possible. However, for a restaurant owned cooperative platform, the incentive is the opposite. If it gains a dominant position, it has no motive to extract monopolistic “rents” from the restaurants.

Rather it can use economies of scale to lower costs. set lower prices or pay higher dividend rebates. By doing this the monetary benefits go back to the restaurants which pay the delivery commission. If the cooperative  kept the money for itself, the restaurants could elect a new board of directors.

The Credit Union-Cooperative Opportunity

This cooperative food delivery option is now being replicated in seven cities (1)– one in Jersey City, New Jersey.  This is one of only eight states where state chartered credit unions can make direct equity investments in other cooperatives.

Only one credit union in the country, Vermont State Employees Credit Union, is actually using this legislation to invest in other cooperatives. This authority is an example of a very useful but underutilized legal tool.

An immediate example where this option could be especially useful is  helping local restaurants in Jersey City who  are creating a platform delivery cooperative to keep money circulating locally and more equitably.

Supporting Local Economies Via the Members

However, there is much any credit union could do besides investments. It’s common for credit unions to provide retail discounts for their members, for example, 30% off  on movie tickets.

Restaurant cooperatives promote themselves with discounts sending a coupon code for a free first delivery. Credit unions could distribute this discount for a free first delivery in the six cities where  a restaurant owned delivery platform cooperative is being formed.

These discounts provide a tangible benefit in the everyday life of a credit union member. It would align credit unions with the wider cooperative ecosystem generating community benefits and social capital. It would help the restaurant delivery coops reach a mass audience  quickly and inexpensively.

It reduces the uncertainty of the startup and avoids the costs of  big tech ad intermediaries like Facebook or Google. Instead, credit unions could directly reach around one-third of adults, on average, who are credit union members.”

(1)The six additional cities are:

KNOXVILLE, Tennessee

OMAHA, Nebraska

RICHMOND, Virginia

LAS VEGAS, Nevada

TAMPA BAY, Florida

LOS ANGELES, California

 

 

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A Reflection on the Anniversary of the January 6th Attack

Today is the one-year anniversary of an attempt to overturn the 2020 presidential election by mounting a physical assault on Congress’ certification of the electoral college vote.

There have been and will continue to be newly researched and passionate reporting about the day’s riot and events before and after.

One well-reasoned analysis is a short essay entitled A Day of Infamy, a year later.

I agree with this viewpoint but want to suggest another lesson. Does a latent January 6th gene potentially exist in anyone in authority? Or are required formal processes and structural checks and balances sufficient to inhibit such leadership temptations?

Everyone Experiences Authority

The crime of Trump and his followers was an attempted coup to overturn  legal and fiduciary  norms of governance and accountable behavior.

Most Americans have or will occupy positions of authority by election, selection or  demonstrated merit.   For example, most households have a dominate wage earner; sports teams-a chosen captain; each church or non-profit–volunteer boards; and coops led by elected directors.

Every public employee, whether by employment or election serves a constituency to which they should be responsible.

Positions of public authority can bring out the best or sometimes, the worst in people.

Bucky Sebastian and Ed Callahan’s decades long relationship showed the vital role of a leader with the right complementary partner.  Ed was an educator, football coach, administrator and powerful motivator–a person skilled in the arts of leadership.

One of Bucky’s important adjunct roles was to be Ed’s “counter-ego,” able to challenge his too emotional reactions to people or situations.  When Ed was tempted to counter someone using direct authority (as a football coach might call out), Bucky would confront him urging he should change his approach versus blaming the other.

Every leader needs a Bucky-like figure when inclined to follow their autocratic instincts in exercising power.

Many adults will achieve authority in an organization through personal ambition and effort, whether that role is paid or volunteer. Once achieved, there is a natural belief in the correctness of one’s judgments whether based on vision, factual analysis or using the rationale-that’s why I was chosen (or elected). 

The Unique Role of Public Servants

This is especially true in governmental employment. Trump’s authoritarian excesses and public delusions are consequential because of the ultimate power and responsibility of the Presidency.  Many believe he subverted the very premise of American democracy with his lies about the 2020 election outcome.

He ignored traditional formal processes.  There were no longer guardrails the public could rely upon.

Whether elected, appointed or selected through competence, public responsibility is always paired with assumed and/or explicit authority.

From parking enforcement, collecting taxes to setting rules and overseeing them, public roles are different in character from private employment.  There is an implied common duty, but often accountability is diffused or lacking.

Regulators of Cooperatives

I believe the Jan. 6th gene is ever-present, latent much of the time, but always ready to be activated in regulatory actions.

The symptoms include unilateral policy diktats, dismissal of inconvenient facts, neglect of administrative oversight, lack of transparency, and most critically, an unwillingness to work mutually with the credit union system.

This authoritarian impulse is most easily seen when those new to the organization first experience the culture.  Mark McWatters joined the NCUA Board in August 2014. He described Chairman Debra Matz’s leadership of NCUA during  in a public speech  several months later:

“NCUA should not treat members of the credit union community as Victorian era children—speak when you’re spoken to and otherwise mind your manners and go off with your nanny—but should, instead, renounce its imperious ‘my-way-or–the-highway’ approach and actively solicit input from the community on NCUA’s budget and the budgetary process. With the strong visceral response within the agency against budget hearings, it seems that some expect masses of credit union community members to charge the NCUA ramparts with pitchforks and flaming torches to free themselves from regulatory serfdom. I, conversely, welcome all comments and criticism from the community. 

Regulatory wisdom is not metaphysically bestowed upon an NCUA board member once the gavel falls on his or her Senate confirmation.

NCUA should not, accordingly, pretend that it’s a modern day Oracle of Delphi where all insight of the credit union community begins once you enter the doors at 1775 Duke Street in Alexandria, Virginia.”  (source: CU Today May 19, 2015)

McWatters is a very conscientious individual, courteous in manner with a rational temperament. He approached decisions using detailed legal and logical analysis.  His reaction to Matz’s autocratic style only corroborated what credit unions had experienced for years, since the Great Recession and unilateral liquidation of corporates.

The irony is that when McWatters became chairman in January 2016, the agency’s “Stockholm syndrome” effect had overcome this initial misgivings. In 2017 he merged the TCCUSF surplus into the NCUSIF to pay for natural person credit union losses, despite explicit congressional wording against this.  When explaining the action, he also admitted circumventing the FCU Act’s limits on premiums.

My immediate concern is that Chairman Harper, who was Matz’s Senior Policy Advisor and protege, also embraces her view of leadership.  He has shown by temperament, in board meeting exchanges, and prior actions as senior advisor, that he is not a person who should be leading the cooperative regulatory agency.

His primary justification for policy is because that is how the FDIC functions. I have described these positions with his own words  in several articles.

At a time when credit unions are transforming their roles with members due to Covid, Harper’s top priority imposed the hoariest and least relevant of all rules, a 28% immediate increase in minimum capital requirements.  Unlike McWatters when confronting the same issue, the current board members blinked and approved this regulatory tax on members and their credit unions.

The Jan 6th Gene and Credit Union Democracy

NCUA’s performance matters because it regulates  one of the unique features of cooperatives—the industry’s democratic, member-owner governance.

The concept that credit unions are democratically governed is misleading.  Few boards are elected today; most continue through reappointment and renominations when terms expire. Members’ involvement is not sought or encouraged. The idea of a contested election with more nominations than open seats is scary for incumbent directors.

Members are routinely requested by CEO’s and managers to give up their charter via merger for a rhetorically better credit union that members do not know and have no part in choosing.  These same “votes” frequently approve significant monetary handouts to departing senior staff who arranged these sales.  In one case over $35 million of self-funding was set up by a former CEO who continues working at the merged institution.

Even the hint of an external director nomination by petition can cause a credit union to change its bylaws to prevent such an occurrence. Pentagon FCU did this immediately after a successful at large nomination.

Credit unions in these actions are following the unilateral leadership style they see at NCUA.

Democratic Practice in National and Local Arenas

Leadership responsibility does entail authority and explicit processes to function.  How that authority is implemented is fundamental to the sustainability of the enterprise. Whether that is the American democratic political experiment, or a cooperative charter founded generations ago.

The fate of America may feel bigger than any one individual can influence.  But democratic norms and duty are not limited to the Congressional and Presidential elections. It is a skill each can hone whenever we participate in an organization’s governance or membership

The first place to ensure democracy remains meaningful is in the arena s of our participations, no matter how great or how small the organization.

As I consider the January 6th assessments, my hope is that anyone who might carry a gene of this kind, will keep it dormant by exercising democratic efforts in those local and national arenas  we care about.

 

 

 

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Counsel for 2022

Several observations on entering the New Year; but  first a poetic note of hope.

 

The New Year 

by Carrie Williams Clifford (1920)

The New Year comes—fling wide, fling wide the door
Of Opportunity! the spirit free
To scale the utmost heights of hopes to be,
To rest on peaks ne’er reached by man before!
The boundless infinite let us explore,
To search out undiscovered mystery,
Undreamed of in our poor philosophy!
The bounty of the gods upon us pour!
Nay, in the New Year we shall be as gods:
No longer apish puppets or dull clods
Of clay; but poised, empowered to command,
Upon the Etna of New Worlds we’ll stand—
This scant earth-raiment to the winds will cast—
Full richly robed as supermen at last!

The Right Attitude  (by John Horvat)

As we enter 2022, we must face a “not-normal” world that shows no signs of returning to order. Having the right “improvise-and-dare” attitude will enable us to survive. It will allow us to exploit any good opportunities to act that come our way. It will mitigate the disasters that strike us.

The Dalai Lama

When asked what surprised him most about humanity, answered “Man. Because he sacrifices his health in order to make money. Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived.”

From a review of the Movie: Don’t Look Up (Netflix)

This December release starred Leonard DiCaprio and Meryl Streep.  The story featured two Michigan State academic astronomers who identified a comet heading directly to earth–and the President and public’s response to this “environmental” crisis.  One reviewer’s reaction:

I am alive. I exist. I don’t need to be told that humans will choose what feels good over what is right every time.

Honestly, I spent the movie rooting for the comet.

Shakespeare on Future Forecasts

Prophecy remains elusive, for who yet can answer Banquo’s “If you look into the seeds of time/And say which grain will grow and which will not/Speak then to me.” (Macbeth, 1.3, 58-60).

The Gift of  Enduring Ideas

As we begin 2022, I am in awe of the remarkable  year just past, and how members and communities across the country benefitted from cooperative efforts.

Credit unions from the earliest days of the pandemic stood tall with their presence, their passion and  dedication to service. When the temporary normal returned, they opened up offices with enthusiasm, and understanding—and an unwavering belief in the transformative power of cooperative purpose.

Credit unions ended the year historically strong. They are ready for a new time of  vital caring using  their  unique capacity to combine educational and transactional financial services.

I am eager to share  what I hope will be “enduring ideas” with you in coming months. One writer described this need as follows:

Amid the present insecurity, endearing objects (read high net worth ratios) are not enough. Our desire for certainties must also be addressed by turning to the things that feed the soul. We must turn to enduring ideas to anchor us in the storms ahead.

 

 

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The Power of Local-Where People Meet Face to Face

The number of Christmas cards I received in the mail this year was overwhelmed by solicitations for yearend donations.   They came from near and far: Chevy Chase Rescue Squad (volunteers), theater and dance groups, churches, hospitals and many national organizations from Doctors without Borders, the Salvation Army and Planned Parenthood.

What each tried to do in their appeals was to stress their local consequences. Here is one request from a supporter of our local live theater:

Dear Charles,

I know you have many options for charitable donations during this year’s holiday season. By now, you’ve been flooded with emails, texts, and phone messages asking for your generosity. 

Instead of getting lost in the shuffle, I’d like to tell you why I’ve been giving to Round House for more than two decades and will continue to do so.

For my wife Lorraine and me, it started out quite simply: we wanted to support a local theatre serving our community both artistically and educationally. Round House stood out because it was right in our backyard, doing quality work, and truly impacting the community. 

Through our giving we have been able to help not only in Round House’s growth but also in enhancing Bethesda and the greater DC area—a place we have loved and been a part of for so long.

I am incredibly proud of how Round House has confronted the many challenges of the pandemic—from being one of the first theatres in the country to pivot to virtual productions and continuing education programs online to safely returning to live performances and in-person classes with robust covid protocols and viewing options in place to protect artists, patrons, and staff.  

Despite all that has happened in the world over the last two years, Round House has remained resilient and continued to be an asset to this community by offering bold, outstanding theatrical and educational experiences both virtually and in-person.

Your contribution helps Round House be a theatre for everyone and continue making an impact in the community. 

The Advantages of Local

Local is about connections, being involved with people where they live, work and play.   The impact is not limited by geography, but is rooted in people’s ability to see their organization at work.

Writer Nick Wolny who promotes online business effectiveness, has written about the lessons from brick and mortar, what he calls the entrepreneurial efforts of the “Original Gangster” (OG) firms.

My first job when I was 16 years old was working at a bakery. I was slingin’ scones and washing dishes until my fingers were pruned.

The owners were a husband and wife. The husband baked all the bread. 

We lovingly called him “Bread God”.

This guy was at the shop at 3:00am to start the breads… seven freaking days a week. 🥖

And he did it with a smile. 

In the years that followed – and eventually when I came to have my own business as well – 

Reminding myself of the brick-and-mortar hustle kept me honest and focused.

It’s easy to cut corners as an online entrepreneur.

In his article Four Insights Creators Should Steal from Offline Business Owners, he describes the advantages of local presence for which there is no on-line counterpart.  He closes the article:

In its current iteration, the creator economy has existed for about ten-ish years. Meanwhile, brick-and-mortar business owners have been grappling with the fundamentals of business for centuries. We could learn something from what they prioritize.

Credit unions have existed for 112 years.  Their virtual strategies for two decades.   How credit unions sustain the advantages of local while expanding online transaction capabilities is the critical investment decision all will continue to confront.

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A Season Uniting Two Cooperative Virtues

Christmas in all its joyous celebrations seems to walk an awkward line between secular, commercial activities at their frenzied peak and the religious meaning of the Advent season.

There is a minor echo of this tension in credit union history.  As the decade of the 1950’s evolved there was increasing friction between two priorities.  One group wanted to promote the business potential of the cooperative system versus the expansion minded pioneers whose primary intent was forming more credit unions.

Today these differing views might be categorized by those who focus on purpose as the driving force,  versus those who belief that growth through acquisitions of their peers and bank purchases are the way to secure the future.

How One Company Combines the Season’s Messages

Occasionally a firm will try to unite the business and religious aspects of this special season.   The UK grocery chain, Sainsbury, has created a unique “commercial” each Christmas for over a decade.   Each new effort commemorates an important value of the season while reference to the company’s business is at best tangential.

In 2014 their “offering” lasted over three minutes.  As described by Stephen Masty:

“it recreated the informal Christmas Truce that spread among soldiers in the trenches near Ypres in 1914, one hundred years earlier. Instigated by a British officer writing to his German counterpart across No Man’s Land, it spread up and down the battle lines as, for a few hours, the guns stopped firing. Yesterday‘s and tomorrow’s combatants sang hymns together and celebrated the birth of the Prince of Peace.

The 2014 ad was the first to mark the Christianity of Christmas. German and British soldiers start to sing “Silent Night” almost spontaneously; while the only visible product is a WW1-era chocolate bar. I find it emotionally powerful.”

“https://www.youtube.com/watch?v=NWF2JBb1bvM”

The story of the ad’s creation is in an accompanying video of just over three minutes.  It demonstrates why and how a very large for-profit firm honors lasting human values while supporting their business.

“https://www.youtube.com/watch?v=2s1YvnfcFVs”

The videos’ message is that in the worst of times there can be humanity.  And this impulse is to be honored in better times.

Peace, for a moment, broke out in the midst of war.   Individuals overcame the ever-present demands of military imperatives and the survival instincts created by trench warfare.

The Blessings of this Season

I am pleased to have shared my observations about credit unions with you this past year.  

Cooperatives are a special way to combine our resources to help with everyday individual needs.  This is a practical necessity that has existed since humankind first gathered in groups.  Whatever the state of the economy.

This season reminds that sharing is an essential human value that is uniquely enabled by cooperative design.  Whatever the difference in operational priorities, our unity arises from the belief that the needs of others will be met with common, not just individual, effort.

 Merry Christmas.   Peace.  Goodwill.