By Jim Dean, President, NorthStar Credit Union

Becoming sidetracked is far easier than committing to a successful credit union merger plan and sticking with it, not only up to the date of the transaction but more importantly afterward.

People represent the largest expense in a credit union operating budget by far. The people aspect of our business is something that many leaders may take them for granted, tending to focus on balance sheet growth as the only thing that matters. In a merger two years ago, we identified culture as a primary concern for the combined credit union.

We completed Extended DISC Personality Analysis for all employees and Devine Hiring Plus assessments for the entire management team. DISC helped us understand co-workers’ personality types and how to interact with one another; Devine identified leadership strengths and weaknesses. Ongoing training with a coach further develops strengths and focus on improving weaker performance areas. This requires long-term commitment as most people didn’t just arrive at this point in their career. Repetitive practice is needed to improve management or sales skills, not unlike practice for an athlete.

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Using both DISC and Devine or something similar in the hiring process on an ongoing basis is very helpful. It’s expensive but nowhere near the cost of making a poor hire. It’s funny how management analyzes all angles of decisions in the selection of a data processor, design-build partner, and vendors of all sorts, but we are willing to trust our gut feeling in the recruitment process. There are many useful resources available and they reveal red flags about people that should be vetted further before adding a person to your team.

Combining organizations also requires a review of the organizational structure and almost certainly recognition that some restructuring will be necessary. These changes can be uncomfortable, as the reporting relationship in each credit union probably includes some long-term employees. Following through with the re-structuring plan at the time of a merger will potentially add to the turmoil of change impacting members and employees already. Failing to follow through will result in ongoing dysfunction and work-arounds to compensate for holes in the organizational chart that should have been addressed.

The people aspect of our business is something that many leaders may take for granted, tending to focus on balance sheet growth as the only thing that matters.

Training and staff development varies, and after reading many Glassdoor ratings for credit unions, most come up short of employees’ expectations in offering a comprehensive, effective training program.  After suffering high turnover and a noticeable decline in morale, we implemented major changes in staff training and our employee recognition program. Rather than holding a training night one time per month, we’ve blocked 90 minutes on Wednesday mornings and have a comprehensive training calendar with flexibility built into it. This has improved our consistency and generated a positive response from employees.

Communication from the top down is the No. 1 determinant for the success or struggles post-merger. The management team must be on the same page and supportive of decisions made if you aspire to have a high-performing credit union. We now recap our key decisions coming from management team meetings, distribute a summary to all managers and ask them to hold team meetings to talk with the staff. Distributing lengthy e-mails to explain, inform, or teach, we found, was not the most effective form of communication.

The bottom line on mergers is that they are far more complicated than combining of balance sheets. Without question, focus on the people who serve the members is the key determinant to the degree of success of any credit union merger. Taking short-cuts in your staff development program or failing to invest in human resources for the long haul will lead to ongoing turnover and low morale.

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