Jim Collins, management guru and author of Good to Great and Built to Last, had agreed to speak at an international gathering of credit unions. But neither Jim nor his research team knew much about credit unions. I agreed to send some briefing materials, conduct a couple of phone interviews with Jim, and have a dinner meeting.
Toward the end of the second interview a lightbulb went on for Jim and he interrupted me, “If I understand what you’ve told me about how credit unions are governed and owned, making a credit union great would be harder and require more discipline than running a great bank.” Three years earlier I had heard this same conclusion during a meeting with Michael Treacy, another management guru and author of Double Digit Growth and The Discipline of Market Leaders.
The basis for these conclusions was simple: Board members of credit unions don’t stand to be that much better or worse off if a credit union performs poorly instead of phenomenally, and the capital structures of most credit unions limit outside investors; so external forces don’t push the boundaries of growth in a credit union as they do in a bank.