Navigating change: A guide for credit union executives

The credit union industry, like many others, is facing a period of significant change. Economic uncertainty and political instability are adding layers of complexity to an already challenging landscape. For executives, these conditions necessitate a clear-eyed view of reality and the courage to engage in difficult conversations.

Embracing the Stockdale Paradox

Named after Admiral James Stockdale, the Stockdale Paradox is a principle that can guide leaders through turbulent times. It emphasizes the need to confront the harshest realities of one’s situation while maintaining unwavering faith in eventual success. Stockdale, a prisoner of war for over seven years, noted that those who fared best were not the optimists who expected quick resolutions but those who balanced realism with resilience.

For credit union executives, this means acknowledging the challenges posed by market volatility, regulatory pressures, and shifting consumer expectations. Wishing for a return to stability or ignoring potential pitfalls will not change the facts. Instead, leaders must assess the situation with brutal honesty and strategize accordingly. This dual approach helps build a culture of transparency and trust, essential for navigating uncertainty.

The importance of courageous conversations

A significant part of facing reality involves having courageous conversations. These are dialogues where difficult truths are addressed openly and constructively. In the context of a credit union, this could mean discussing the financial stability of the organization, potential layoffs, or the need for strategic pivots.

Unfortunately, many leadership teams avoid these discussions. They may fear causing panic or damaging morale. However, avoiding tough topics often leads to more significant problems down the road. By not addressing issues like declining loan portfolios or increasing delinquency rates, leaders risk making uninformed decisions that could harm the credit union’s future.

Best practices for courageous conversations

1. Create a safe environment: Ensure all team members feel secure in expressing their concerns and ideas. An open and respectful atmosphere encourages honest dialogue and collaborative problem-solving.
2. Be transparent and specific: When discussing issues, provide clear data and examples. Vague statements can lead to misunderstandings and mistrust. Specificity helps in identifying concrete actions that can be taken.
3. Listen actively: Effective communication is as much about listening as it is about speaking. Understand the perspectives of others, acknowledge their feelings, and be empathetic.
4. Focus on solutions: While it’s important to acknowledge problems, the goal of these conversations should be to find solutions. Encourage a forward-looking approach that seeks to address challenges constructively.
5. Follow up: After a courageous conversation, follow up with concrete actions and updates. This reinforces the commitment to transparency and accountability.

The role of leadership

A saying that I use often is, “As goes the leadership team, so goes the entire organization.” Remember that everyone in the credit union is watching you. They listen to what you say and observe how you act. Everything sends a message. Now is the time to send a clear message of thoughtful confidence and resilience. Your employees need to believe that you have a solid plan to successfully move through the complex challenges facing your organization. Challenging times call for a higher level of leadership.