When I speak to groups of executives about digital transformation, they often assume I will focus exclusively on technology—innovations like artificial intelligence, cloud platforms, blockchain, or big data analytics. They expect me to tell them how adopting these cutting-edge tools is the key to navigating digital disruption.
But the truth is, my research and experience have consistently shown something different: digital transformation is fundamentally about people, culture, and organizational design, not just the technologies we deploy. For credit union executives, this insight is compelling and encouraging. Your organizations already excel at relationships, trust, and member service. If you approach transformation correctly, these strengths uniquely position you to succeed in the digital age.
The Technology Fallacy: Why Tools Alone Aren’t Enough
My colleagues and I spent years researching how legacy organizations adapt to digital environments. The core finding? Successful transformation isn't primarily about adopting new technology but about reshaping the organization itself—its structure, culture, and processes—to thrive in a digital environment. We call overreliance on tools the "technology fallacy." Just because technology creates new challenges doesn't mean the solution is purely technological.
Successful transformation isn't primarily about adopting new technology but about reshaping the organization itself—its structure, culture, and processes—to thrive in a digital environment.
Consider Cigna, the health insurer. Realizing the need for upgraded digital skillsets, they didn't just deploy new software. Instead, they strategically identified future talent needs and incentivized employees to gain those skills through enhanced tuition reimbursement. By investing in people they built adaptability and addressed the core challenge, aligning human capabilities with technological potential—something technology alone can’t solve. This people-centric approach requires increasing your organization's absorptive capacity, its fundamental ability to learn and adapt to new knowledge and ways of working.
Navigating Digital Disruption: The Wizard of Oz Analogy
I often use an analogy from The Wizard of Oz to describe my perspective on digital transformation. Digital disruption is like the cyclone that sweeps Dorothy into Oz. Without it, the story doesn’t start. Yet we aren’t captivated by the cyclone itself—we are interested in Dorothy’s journey and her experiences along the Yellow Brick Road. Similarly, technology may spark digital transformation, but the real narrative—the meaningful part—is how organizations like yours adapt to thrive.
Digital disruption won’t go away. But just like Dorothy, the goal isn’t merely surviving the storm—it’s about learning, growing, and becoming stronger as an organization in the process.
The Knowing-Doing Gap
87% of executives believe digital technologies will disrupt their industries, yet only 44% think their organizations are adequately prepared for these disruptions.
Our research indicates that 87% of executives believe digital technologies will disrupt their industries, yet only 44% think their organizations are adequately prepared for these disruptions. Why this huge knowing–doing gap? While we don’t yet have the hard numbers for credit unions, we know anecdotally, from conversations with over a dozen CU leaders, that this is true in the CU industry as well. Not only do CU leaders know that digital technology will disrupt the industry, they know that it already has, and yet they are still struggling to get out from behind it.
Internal barriers—think complacency, inflexible structures, no will to rethink long-standing practices—often prevent meaningful change. For credit unions, a particularly high risk aversion across the industry can be a significant barrier further inhibiting proactive adaptation. As leaders, your role is to dismantle these barriers proactively. Creating an adaptive, digital-ready organization involves far more than IT—it demands rethinking how your teams operate, collaborate, and innovate.
Four Superpowers for Digital Adaptation
During my research for The Transformation Myth, we identified four critical organizational capabilities—"superpowers"—enabled by technology that successful organizations cultivate, particularly when facing disruption. Credit unions can cultivate these by blending technology with human-centered processes:
- Nimbleness: The ability to pivot rapidly. Consider Hitachi Vantara: During COVID, they reprogrammed existing smart factory sensors—originally for efficiency—to monitor social distancing and employee temperatures, rapidly adapting their digital infrastructure for a new, urgent need. Their established technological infrastructure and innovative culture allowed them to repurpose existing assets for a novel problem far more quickly than if they had started from scratch.
- Scalability: Handling dramatic changes on demand. Hilton, facing a 90% demand drop during the pandemic, ingeniously repurposed its recruiting platform to help laid-off employees find jobs with partners like Amazon and UPS, preserving goodwill and enabling a faster ramp-up when demand returned. A robust existing platform and a people-centric value system enabled Hilton to adapt its resources creatively for employee and partner benefit. As a result, Hilton was named the third best company to work for in 2021, despite having laid off 50,000 employees.
- Stability: Ensuring consistent performance amid disruption. Cloud infrastructure, Google Cloud or AWS for example, provides inherent stability and resilience, keeping services operational even during crises. The very nature of their sophisticated and resilient cloud-based architecture is what provides this crucial stability, more so than any organization’s proprietary technology could achieve on its own.
- Optionality: Quickly integrating new capabilities. Portillo’s, a restaurant chain, rapidly stood up its own digital delivery service using its cloud platform, controlling the brand experience and protecting employee jobs, rather than solely relying on third-party apps. Leveraging their existing cloud platform and a strategic desire to control their brand and protect their workforce enabled Portillo's to develop this new capability swiftly.
Credit unions can cultivate these superpowers by strategically designing organizations that blend technology with human-centered processes, empowering members and employees.
Cross-Functional Teams: The Secret Weapon of Digital Leaders
In digitally maturing organizations, traditional hierarchies often yield to agile, cross-functional teams. These teams blend expertise from compliance, marketing, member experience, and technology, enabling quicker, smarter decisions.
A powerful example comes from Marriott. Facing challenges in delivering a seamless digital guest experience, their digital lead began working closely with operations. By integrating digital and operational perspectives and sharing performance metrics, they ensured that app-based services translated into exceptional real-world stays, showcasing how cross-functional collaboration bridges digital promises and physical delivery. This organizational design, not just the technology, was key. Credit unions should learn from this; digital success demands structural flexibility and empowered teams.
Culture Eats Strategy for (Digital) Breakfast
In digitally mature organizations, culture is intentional, not accidental. Cultures emphasizing risk-taking, experimentation, continuous learning, and collaboration consistently outperform others. These cultural characteristics aren’t inherent—they must be intentionally cultivated.
As credit union executives, your culture can be your most significant digital advantage. By fostering an environment that prizes adaptability and innovation, you position your credit union to endure disruption and thrive through it.
The Long Game of Digital Maturity
Finally, successful digital transformation is a long game. Adobe recognized that the competitive landscape was shifting long-term, and they adopted a forward-looking strategy focused on evolving their business model towards recurring revenue and expanding their software and services portfolio, proactively preparing for future customer expectations rather than just reacting to immediate pressures. Despite experiencing a significant revenue drop due to this switch, their stock price was largely unaffected because they clearly articulated and communicated the strategy to relevant stakeholders.
Think beyond short-term tech adoption and focus instead on strategically realigning organizational structures, cultures, and talent practices for the digital long haul.
Credit unions, likewise, should think beyond short-term tech adoption and focus instead on strategically realigning organizational structures, cultures, and talent practices for the digital long haul.
Your Unique Position as Credit Unions
Here’s the good news: credit unions, founded on personal relationships, community trust, and member-centric values, are uniquely positioned to thrive in the digital world—if you resist the technology fallacy and instead embrace digital transformation as an organizational, people-centered evolution.
My encouragement is simple: keep technology in perspective. Focus intensely on designing organizations that adapt, learn, and harness human capabilities empowered, rather than replaced, by technology.
That’s how you’ll lead your credit union confidently through disruption into a vibrant digital future.
