Tuesday, March 20, 2007

UI Held Hostage Day 423 - March 20 - UICCU

March 20, 7:30 a.m., 9:20 a.m.

Open Letter to UICCU Board

March 20, 2007

Dean Borg, President
Karin Franklin
Jean Harney
Tom Lepic
Charles Mason
Charles McComas
Fred Mims
Kenneth Moore
Laura Reed
Duane Thompson

Dear UICCU Board Members:

Tomorrow night, Wednesday, March 21, is our membership meeting. Because the timing conflicts with my teaching schedule, I will be unable to attend. So I am taking this way of sharing my thoughts with you.

One of the things we all learned the evening of February 28, is that process matters -- in any institution, but especially a membership organization that is even described in federal law as a "democratically operated organization."

As we now look forward, not back, the question is: What more did we learn? What changes can we make to reduce the likelihood of future "February 28ths"? They may not be as expensive. They may not be as divisive. We cannot now predict what the issues will be. But what we can know, with as much certainty as we can know anything, is that -- especially for this credit union -- they will occur. It's not "whether," it's just "when."

Most of the time, in an "us" (UICCU board, CEO and employees) against "them" (groups of members) the "us" will win. I would guess the three of you running for re-election to what has become a self-perpetuating board will probably be re-elected tomorrow evening. (But then, I assumed the February 28 vote would sustain the "Optiva" choice, too.) The issue here is not about limits on your legal rights.

The issue involves Southwest Airlines' motto: "We hire for attitude and train for skills."

It is obvious from UICCU's financial numbers, and its national ranking among credit unions, that together you have the skills.

That's not the issue. The issue before us as an organization is not your skills, it's your attitude.

What is your attitude, and that of the CEO, regarding membership involvement in the governance of what Congress has called this "democratically operated organization"? Are you (a) bringing imagination and innovation to the search for every possible way to ascertain members' opinions and desires regarding the UICCU's policies and future direction and involve them in governance, (b) relatively oblivious to issues of credit union democracy, or (c) affirmatively hostile to members who seek information, participation, ask questions, hold opinions contrary to yours, and otherwise "meddle in, and make more difficult, what is after all your responsibility and 'none of their business'"?

To the extent you, too, would like to look to the future, and figure out ways to avoid continual replays of the February 28th experience, to the extent you would place yourself in category (a), above, here are some suggestions from one member as to how we might go about this evolution.

1. The process you use for addressing the "process question" will determine the richness and acceptability to the membership of the innovations you come up with.

In other words, this is not an issue for the board members to address in a closed "retreat" session.

Trust your membership. Be genuinely open to what members may come up with. This is an issue to be thrown open to the entire membership -- a group far more extensive than those few individuals able and inclined to come to a meeting at a fixed time and place.

For these reasons, I don't represent that my ideas, that follow, are "the answer." They are only one member's first draft, designed to help get the discussion started.

For convenience, I break the suggestions down into three categories: board elections and membership meetings; ongoing membership involvement; and what might be thought of as membership outreach and marketing.

2. Board elections and membership meetings.

(a) We have a relatively closed board election process in contrast, for example, with that followed by the Linn Area Credit Union. Linn encourages members to run for board positions and explains how they can do it, listing the CEO's phone number (something we still do not do). It makes it possible for members to vote throughout the day at any branch office. It sends a postcard to members, designed to get their attention, laying out all of this. Were I a member of Linn I could vote tomorrow. Because I am a member of UICCU I cannot (unless I am willing to "skip work"). Even if not true in fact, our process gives the impression that the board and CEO have deliberately created a process to exclude maximum possible membership participation while retaining their own tight control.

(While it is true that there can be nominations from the floor during the meeting this is obviously a far cry from the advantages held by board members who wish to be re-elected. There is no mechanism by which members can communicate with each other prior to a membership meeting. There is no member access to a membership list -- or even a procedure for sending email to a members' email list (without disclosing members' names or emails to the sender). There is no opportunity to include the names of board candidates in the Board/CEO postcard announcement of the meeting. Indeed, on this occasion there was no postcard announcement of the meeting.)

(b) "New blood" for the board. Every organization, no matter how successful, needs a bit of new blood, new thinking, new ideas from time to time. The same is true of our UICCU board. This is a complex issue. When I served on the national board of Common Cause I pointed out the irony in the organization's position: there was a two-term limit on national board members -- while the organization simultaneously opposed term limits for members of Congress! The UICCU has obviously benefited from the experience of its board members. But the average length of service is something over 10 years each. (Nine of the 10 bios on the Web site indicate length of service as 8, 30, 4, 6, 8, 1, 7, ?, 7, and 13 years. The "?" is for the one member for whom length of service is not indicated, although I have been (unreliably) informed it is 25 years.)

There would be a number of ways of addressing this (if the membership wanted to do so). (1) We could have a two- or three-term (6 or 9-year) limit. (2) When the terms of the three or four members are up, the one who has served the longest could be required to drop out, thereby creating an "open seat."

Either of those proposals, or others that might be thought of, would be preferable in my opinion to what may be in the works for tomorrow evening: a credit union member running against a board member or members. (The former reflects a board that is open to, and encouraging of, members participating as new board members. The latter perpetuates the divisiveness we're trying to get away from.)

3. Ongoing Membership Involvement.

However true it may be that most UICCU members do not care about the operations of their credit union so long as the ATMs work and the interest rates are favorable, that is not a reason for foreclosing the participation of those who do care.

Half of the eligible electorate don't bother to vote for president of the United States either, but that's not been thought a persuasive reason to call off the election.

It's the opportunity for participation, the perception that the Board and CEO wish to encourage (rather than discourage) participation, the sharing of information, the inclusion of interested members in the decision and governing process, the reality as well as the appearance of genuine democratic opportunity that is important.

If you, as a Board member, would like to do more in this direction, here are some suggestions.

(a) Open Board meetings, public records. Your present practice, as I understand it, is to exclude members from your board meetings, and to refuse to publish minutes of your meetings on your Web site. This is, presumably, your legal right; but none of this letter has been about legal rights and wrongs. It is about what is in the best interests of the Board, as well as the membership, of the UICCU in our effort to avoid future February 28ths.

Clearly, one of the major causes of the February 28th problems was what's called "a failure of communication." Suspicion, rumors and hostility grow like mold when stakeholders (of any organization) are kept in the dark. The disinfectant of sunshine works to the Board's advantage as much, or more, than it does for the members.

Regardless of what's done with opening the Board meetings, and publishing the Board meeting minutes, something must be done to communicate forthrightly to the membership the program and policy options being considered by the Board, with a candid and full disclosure of the pros and cons of each, and a meaningful opportunity for the members who care to be heard.

I would suggest you consider the ideas contained in the Iowa open meetings and public records acts (laws applicable to government agencies, but not credit unions) as your starting point in thinking through how you might loosen these restrictions. They start with the assumption that all meetings should be open, and all documents should be available to the media and public. But they go on to provide a long list of exceptions. Meetings can be closed, but the reason, the applicable exception, must be stated. I would assume that much, if not most, of what goes on in your Board meetings could be open to any interested members. Similarly with the minutes of your Board meetings, and with many of the reports and documents you and the CEO use. There would be good reason to keep some confidential; others could be made available to members.

(b) Advisory committee. A supplement, or perhaps even an alternative of sorts, to opening up the board nomination and election process would be the use of advisory committees to the Board, made up of those who would like to be heard on credit union issues. Properly conceived, this could be a real benefit to the Board.

(c) Online discussion groups and polling. There needs to be some way for the members who care to communicate with each other, and with the membership at large. The Press-Citizen (among other papers) includes in its letters to the editor and op ed columns some pretty tough (and sometimes unfair) criticism of the paper -- and thereby strengthens its credibility (and circulation). If it can do it, the credit union should have even less to fear from free speech.

Polling of members can be done online. There are technological ways of insuring that individual members only vote once. Estonia just conducted a nationwide presidential election with online voting. If a nation can do it, presumably a credit union can.

Suppose, for example, that there had been an online poll of UICCU members regarding the Optiva name change -- as I proposed to some of you and our CEO. Suppose only 10% of the membership actually bothered to express a view -- 4500 members. And, of them, suppose that 80% voted in favor of the Optiva name. I may be wrong, but my guess is that virtually all members -- including those opposed to the name -- would have accepted that result.

One of the underlying assumptions in the name change was that "growth is good," and that "we may want to expand into Illinois." That may or may not be right; I'm not expressing a view on that; "show me the data" and I can be persuaded. But it remains another major issue for which we need to have a substantial majority of the membership involved, informed, persuaded and on board or we're going down the conveyor belt into another February 28th buzz saw at some point.

An online discussion -- pro and con -- followed by a polling of the membership could help avoid that preventable disaster.

(d) Ombudsperson. Many organizations, not just government and universities, have a designated ombudsperson. This is, ideally, a truly independent person who is perceived as trustworthy and neither hired nor subject to being fired by management. The ombuds is someone to whom various stakeholders (customers, students, employees) can go to present a grievance (or suggestion) anonymously -- thereby avoiding the intimidation of having to present it to a supervisor who at best may be provoked to recrimination and at worst may actually be the subject of the complaint. It is the job of the ombuds to try to resolve the problem while protecting, insofar as possible, the complainant.

At the present time, anyone who has a problem with a credit union practice or a decision of the credit union's CEO has nowhere to go but to the CEO who made the decision and, like any human, is disinclined to confess error or change policy.

4. Membership Outreach and Marketing

Don't discount the possibility that members might be able to come up with some useful ideas for building membership, marketing the credit union -- and in the process creating greater membership involvement.

Like most brainstorming, probably 90% of the ideas won't prove out. But that's the process. Here are some for starters:

Counseling and classes. The UICCU used to have financial counselors. It was a great selling point. It's a niche that is not (perhaps deliberately not) being fulfilled by the commercial banks that profit from customers' overloaded credit cards, high interest rates, and ATM charges. It's something we could do with free classes for members, one-on-one counseling, and presentations in the local junior highs and high schools.

PATV and DVDs. "Person-in-the-street" interview clips of UICCU members talking about the credit union's features could be incorporated in online and public access cable videos providing financial advice. A DVD incorporating some of this material could be provided as a recruiting item, or provided members. And of course all of this can be streamed online.

Social events. I don't know whether it would work with the UICCU, but other credit unions have picnics and other social events. The Linn Area Credit Union, mentioned above, has a dinner at its annual membership meeting.

Friends inviting friends. One of the advantages of social events is that they can be an opportunity for members to bring non-member friends to the event. But it doesn't have to require a social event. "Friends inviting friends" to UICCU membership could be tied in with some kind of financial or other reward for finding new members.

Tag line. During the February 28 meeting someone mentioned that membership of the UICCU actually grew during the months the possibility of its name change was under consideration because, went the speculation, more people became aware of the fact that UI association was not required for membership. To this, someone else responded, in effect, if that's the case, why not a one-liner in marketing and advertising mentioning this fact? Why not? "UICCU -- It's for everyone." Or, "UICCU -- It's all Iowans' first choice." Maybe ask the membership for better suggestions?

Thank you for your volunteer service over the years. I would welcome your response to my letter. What is your attitude? What do you think of the ideas I've outlined? Are you interested in working further with me and others in making the UICCU not only one of the most financially successful credit unions in the United States, but the lighthouse beacon example of the most "democratically operated organization" in the country as well?


Nicholas Johnson

UICCU and "Optiva"

The UICCU-Optiva story is essentially behind us. There may be occasional additions "for the record," but for the most part the last major entry, with links to the prior material from October 2006 through March 2007, is
"UICCU and 'Optiva'" in Nicholas Johnson, "UI Held Hostage Day 406 - March 3 - Optiva," March 3, 2007.

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[Note: If you're new to this blog, and interested in the whole UI President Search story . . .

These blog entries begin with Nicholas Johnson, "UI President Search I," November 18, 2006.

Wondering where the "UI Held Hostage" came from? Click here. (As of January 25 the count has run from January 21, 2006, rather than last November.)

For any given entry, links to the prior 10 will be found in the left-most column. Going directly to FromDC2Iowa.Blogspot.com will take you to the latest. Each contains links to the full text of virtually all known media stories and commentary, including mine, since the last blog entry. Together they represent what The Chronicle of Higher Education has called "one of the most comprehensive analyses of the controversy." The last time there was an entry containing the summary of prior entries' commentary (with the heading "This Blog's Focus on Regents' Presidential Search") is Nicholas Johnson, "UI President Search XIII -- Last Week," December 11, 2006.

My early proposed solution to the conflict is provided in Nicholas Johnson, "UI President Search VII: The Answer," November 26, 2006.

Searching: the fullest collection of basic documents related to the search is contained in Nicholas Johnson, "UI President Search - Dec. 21-25," December 21, 2006 (and updated thereafter), at the bottom of that blog entry under "References." A Blog Index of entries on all subjects since June 2006 is also available. And note that if you know (or can guess at) a word to search on, the "Blogger" bar near the top of your browser has a blank, followed by "SEARCH THIS BLOG," that enables you to search all entries in this Blog since June 2006.]

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Media Stories and Commentary

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Anonymous said...

You are basically arguing for mob rule of the credit union.

More input on a name change is one thing. The inmates running the asylum is another. If you are unhappy with the Board and CEO by all means pursue change in those areas, but having every little decision argued over by some member committees is not effective at all.

Anonymous said...

No one really cared about how the credit union was run until the name was to change. And then that's all they cared about.

I certainly can't imagine -- even now, after Optiva -- that many people care about "process," and certainly not the "process of process." Oh brother...

Very few people care about anything more than great rates, lower fees and a friendly smile (whether it's from a bank or a credit union). I think most of these people are fine just letting someone else run their financial institution for them.