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White paper from CUNA Councils focuses on CU mergers
MADISON, Wis. (4/20/10)--The credit union merger landscape is shifting in ways that are both subtle and dramatic, according to a CUNA Councils white paper. More than one-third of all credit unions operating in 2008, for example, had participated in at least one merger between 1979 and 2008. As a result, a growing number of credit union executives have been through multiple mergers and have developed a merger competency that will likely become part of an essential skill set for CEOs and senior management during the next decade. That’s the finding of a new white paper, “Developing a Merger Competency,” sponsored by the six CUNA Councils. The paper looks at many areas surrounding credit union mergers including the rationale behind many mergers, roles of staff involved and board, effective mergers, mergers to reject, members point of view, and more. Attitudes also are evolving; mergers are no longer considered the last resort for a failing institution--in some cases, they are part of a thoughtful strategy for healthy credit unions. A merger, like most financial decisions, may at first seem to be about operations and numbers, but its success, will hinge on whether the emotions and culture of the two parties involved were respected and treated fairly, the paper noted. Mergers sometimes flounder because they focus on the mechanics--financials, operations, products, services--when merging talent and traditions from both organizations is often the critical element. While integrating two cultures, capable leaders know the importance of symbols and signals in communicating with employees about change. Alan Peppers, CEO of Westerra CU, a $1.2 billion asset, Denver-based credit union, brought four credit unions together through mergers in the last five years. Emphasizing the importance of being proud of one’s past, the organization developed a museum to preserve the history of the four organizations, which includes a “Spirit of Volunteerism” wall honoring past chairmen and historical documents from each credit union. “The most challenging part of any merger is the cultural integration, winning the hearts and minds of employees and members,” Peppers said. Westerra focuses efforts on the integration process by using face-to-face communication in groups of 10 to 15 employees. The credit union follows up by using a third party to facilitate focus groups to ask employees how they did their work, identifying any gaps between the two cultures. By identifying the gaps, it helped redefine the mission, vision and values of the credit union that would become Westerra. This was then followed by ongoing electronic opinion surveys. For more information, use the links.
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