Category: Observations

Each year end brings the retirement of credit union leaders who have served a generation or more expanding the cooperative legacy. One such exit at Eastman Credit Union in Kingsport, TN is especially noteworthy.

Olan Jones is leaving an institution he guided for over 20 years. Today it is $5 billion in assets versus $600 million when he arrived. Its 820 employees serve 230,000 members at 30 employer and branch locations throughout the country.

 A Person of Purpose

The first two decades of Olan’s professional career were with Eastman Kodak and Eastman Chemical in corporate finance and human relations. Then came the switch to cooperatives.

While it would be important to single out the over 20 years of Eastman Credit Union’s sustained financial performance as CEO, what makes Olan’s contribution so special is his leadership qualities.

Even with 20 years in the corporate for-profit world, Olan believed in the unique contribution of the cooperative model. In our conversations he was curious about all things credit union. His final question in a call to me would be, who else might he ask about a topic such as “Are any credit unions actually utilizing big data analytics to improve their core understanding of their firm and make better decisions”?

“To Thine Own Self Be True”

In all my interactions, Olan’s “southern gentleman’s” personality was prominent. He was always courteous, calm and thoughtful. He welcomed all comers and made people feel at ease. No air of authority, but rather someone you want to have lunch with.

Olan calls it a “Southern Appalachian” manner. Born in Kingsport, TN, he is a life-long, all-in participant in numerous community educational institutions, economic development efforts, theatrical groups, and church and professional organizations in the east Tennessee and southwest Virginia regions of his FOM.

He always saw his responsibilities as much more encompassing than leading the credit union. One initiative he undertook was to deploy a community WiFi network in downtown Kingsport in the early era of the Internet revolution. Ultimately this community effort was ended when WiFi became ubiquitous.

He was active in many Tri-Cities community leadership roles and in financing public development projects. In the credit unions system, he served in volunteer roles with Filene, CUNA, NASCUS and the Tennessee League, to name a few. He also served on the Thrift Institution Advisory Council of the Federal Reserve Board.

A Manager’s Manager: A Service Culture

His combination of human resource and financial background propelled a multifaceted approach to organizational change that resulted in an 800% asset growth during his two-decade tenure.

He was an advocate for quality improvement processes (Deming) and project management. He sought 5-10% annual growth in the field of membership (FOM) as the area’s population was declining at 0.5% per year and the economy growing at only 1%. The company sponsor since 1936, was downsizing employment. By adding groups and counties to its field and becoming a one-stop shop, the credit union enjoyed strong annual earnings with double digit balance sheet growth during his stewardship.

He believed that empathy was key to effective customer service, not just great products. Creating a service culture, he realized, takes time and continual measurement. Once implemented, the credit union has achieved a net promoter score of 81-87% for over ten years. Better service creates better financial results was his operating logic.

He believed so strongly that lending was the critical credit union role that he once appeared at a staff meeting in a “Hair on Fire” wig to stress this urgency. Since the 1990s, the credit union was a pioneer in a non-government guaranteed, private student loans. He refocused lending on middle-class blue-collar members, not just higher paid senior executives. He introduced business lending and financing municipal development projects resulting in a $350 million portfolio.

The credit union shared its success with its member-borrowers by paying out $130M rebates over a 20-year period. Some business clients were so surprised with annual interest checks in the tens of thousands of dollars that they sent them back thinking there had been an error.

His Credit Union Spirit

Having lived in the corporate world of quarterly earnings-per-share expectations, Olan believes that serving members, not maximizing profits, is what undergirds credit union success. ECU found that the higher the annual member service rating, the stronger the financial performance. To everyone’s surprise, almost everything else that matters to financial performance got better as well.

He preached that ECU’s strategy of “maximizing service to members” both differentiates and gives the credit union a huge competitive advantage.

The smartest investment he made was in the credit union’s hiring and training program to maximize this service quality focus. He wanted to keep goals clear, simple and understandable. An employee bonus program of up to 20% of salary, is based 50% on loan performance and 50% annual member satisfaction rating.

Service quality excellence was recognized in the staff bonus combined to create the organization’s decades-long superior outcomes.

The yearly bonus dividend paid out more to members than the credit union would have paid should it have been subject to federal and state taxes. Instead these funds were reinvested immediately to enhance member’s lives and their communities.

Not Changing of the Guard, but Drawing from a Pipeline

Credit unions are unique in their ability to capitalize on local relationships. Olan’s leadership accomplishments stem from his deep, caring loyalty for his people, his community and his region.

His successor, Kelly Price, is from the credit union’s executive ranks. Just as Olan himself sprang from the local environment.

On October 14, 2019, Olan’s singular contributions to east Tennessee were recognized by the Speaker of the Tennessee House of Representatives in a formal proclamation reciting his lifetime of service to his home region.

For those who have not had the experience of meeting Olan, this video for his work with Junior Achievement will give you a first-hand picture of his personality.

https://www.youtube.com/watch?v=dZS8kCnarBE

This week ends the tenure of Callahan’s longest serving board member, Bob Minor. He has been part of multiple organizational transitions including three changes of CEO leadership since being asked to serve, as a personal favor to me in the early 1990’s. This was a time when Callahan & Associates transitioned to become a leader in credit union analysis, strategy and collaborative initiatives.

Bob is a long-term Washington hand, having attended almost every Presidential inauguration starting with FDR’s second in 1936, a practice that ended with the current White House occupant.

He graduated with BA and MA degrees from George Washington University followed by career stops with quintessential Washington organizations: the CIA, Clark Construction Company, the National Education Association and the State Department. What tied all of these positions together was his lifelong interest in helping people make good decisions about their employment/career ambitions. These were often at critical transition points in the life of the organization or of the employee.

An Organized Committee Member

I first saw Bob’s skills as a member of the Columbarium Committee of the Chevy Chase Presbyterian Church in Northwest DC. We were tasked with evaluating whether a columbarium addition on the church grounds made sense, and if so, to carry out the proposal.

No member of the five-person group had first-hand knowledge for this project. But as we visited other church’s examples, talked with contractors and evaluated different options, everyone learned together. Bob’s vital contribution was that he kept meticulous records and understood how to succeed in the internal decision making within the church. He then played essential roles in the fundraising, construction and dedication, a time span of almost two years.

Seeing firsthand his ability to work within a committee as part of a larger organization, I asked Bob if he would volunteer on a new Callahan “Advisory” Board of Directors. Advisory, because at the time Callahans was a sole proprietorship, and all decision making and authority was mine.

I believed that if Callahans were to grow beyond the vision of a single person or team, we needed a governance/advisory process that would fill the director’s role required by most organizations.

The Rest is History

Bob and fellow board members, Randy Karnes, Rosemary Hardiman and Mark Elliott guided the company through the inevitable transitions any successful organization must navigate.

The single proprietorship became a 25% ESOP in 2003, followed by a management led purchase in 2014, and a 100% ESOP conversion in 2018. All these changes were new for us and required careful consideration. Bob was vital counsel in ongoing personnel successions including three CEO transitions. While internally focused these transformations took place at a time of unceasing change in the credit union system, Callahans reported on with its data, market share analysis, and editorial commentary.

Essence of a Volunteer: The Elder’s Role

Bob’s volunteer role was always positive. He provided continuity with firsthand knowledge of the company’s history and previous decisions. Staff members sought his counsel about their careers within Callahans or beyond. He was trusted by all to be impartial. His patience for circumstance reflected his deep respect for individual choice. His counsel was based on his wide-ranging experiences of public, government and non-profit employment.

As a member of Northwest FCU since his time as a CIA employee, he understood the potential for credit unions’ contributions and Callahan’s important role in the industry.

Unique, But Not Original

Bob’s service to Callahans is just one aspect of his life. He served as an elder, deacon, choir member and on multiple committees in his over 50 years membership at Chevy Chase Presbyterian Church. Through his decade long association with the career management consulting firm, Drake, Beam, Morin Inc., he advised and coached literally hundreds of persons in their career decisions.

Bob’s vital role at Callahans is that he understands, values and enhances relationships. After the striving and recognition that is so strong a motivation for many, Bob practiced the value that matters most in the end: how we treat our fellow human beings. And that is the reality that ultimately makes all organizations a success—or not.

In credit union land, Bob’s role was not original. The fiduciary and volunteer role of credit union directors can be a critical factor in their success and sustainability. Bob’s spirit can be amplified by thousands of examples in credit unions throughout the country. His departure is a reminder of how cooperatives depend on this dedicated stewardship and oversight. So, don’t wait to recognize this dedication at a retirement event; instead reach out and give your board a hug today!