The Berger Leadership Blog

Disruption can be good

At NAFCU’s 2015 Annual Conference and Solutions Expo in Montreal.

By now, most have you will have heard about NAFCU’s big announcement made earlier this week: we have opened our association to federally insured, state-chartered credit unions, as associate members.

It’s big news in some ways – but business as usual in other ways. For instance, we already had federally insured, state-chartered members because NAFCU has a “once a member, always a member” policy, and federally chartered credit unions sometimes change their charter. But it’s big news because we feel that it is a big, positive step in the right direction for our members and the credit union industry.

Everyone has heard that “change can be good,” but what about disruption? Disruption is a big word in management circles these days – and there’s a good reason for that. Many industries out there seem to have made “Do not disturb” their motto – things went pretty well for them in the past, so they’re trying not to mess things up. But as the credit union industry knows all too well, change will happen whether we like it or not.

Silver Peak Systems CEO David Hughes put it this way: “The current environment favors those who are working to create their own waves, with their own disruptive innovation, as opposed to those who try to anticipate and react to what may happen to them.”

The Harvard Business Review defined disruptive innovations as follows: they “may lack certain features or capabilities of the established goods … they are typically smaller, more convenient, and less expensive, so they appeal to new or less-demanding customers.” The HBR was thinking of companies like Southwest, which became famous for offering inexpensive, “no-frills” flights. But I believe NAFCU can – and will – be disruptive in the same positive way.

If something does not fall into the following three buckets – advocacy, education, and compliance – we’re not going to do it. That’s our strategy, and it will not change – even as we accept new associate members. Our new members need the same things our current members need: excellent advocacy on Capitol Hill and at regulatory agencies, comprehensive education on the latest issues affecting credit unions, and fast and effective help from our regulatory compliance staff. These are the things we do best – and these are the things we’re offering to new members.  So in other words, it's business as usual.

If that means we’re “no-frills,” then I’ll take it. It’s better to disrupt things than to wait to see what happens and keep your head down. I’m excited to see where this latest disruption takes us, and I’m confident that we’ll be ready for whatever the future brings.

Can you admit mistakes?

Saying you’re sorry – it’s not just mandatory for kids in preschool. A leader who can admit when he or she has made a mistake – and who can own that mistake, and apologize – can make the difference between employees who trust their organization and employees who are sending their resumes elsewhere.

Jim Whitehurst, the president and CEO of IT company Red Hat, wrote in Harvard Business Review  that one of his most important moments as a leader was admitting that he should have rewritten an acquired company’s code before putting the product out. As a result of his decision, customers hated the product, and his company was forced to start over – when they could have just solved the problem before putting the product out there.

When Whitehurst owned up, he said many employees expressed their appreciation for his honesty. “When you don’t make the time to explain why you made your decision, people will often assume the worst all on their own: that you’re detached, dumb, or don’t care,” he wrote.

It’s up to the leaders themselves to show their teams who they are – and that includes the fact that they’re not always perfect. And that surely includes me.

Culture matters

We all know what it’s like to hear someone say something that shouldn’t cause offense but is said in an off-putting way. A person’s tone of voice can negatively affect the whole conversation regardless of subject matter. And no matter what your company does or what products you offer, your culture as an organization can affect your success in surprising ways.

I was recently reading about a start-up CEO’s struggle to determine what his company’s culture is. “The culture that you develop sets the tone for every interaction and decision in your company,” Chris Myers of BodeTree explained. Even when he was just beginning the company with his co-founder, he now believes he should have spent more time thinking about their corporate culture.

As his team expanded, Myers remembers, “there have been incidents … where our innocent actions are perceived as being secretive or opaque. Sometimes it’s closed-door meetings or hushed phone calls.” It mattered, he said, because his coworkers weren’t sure what kind of corporate culture they were dealing with. They’re not sure whether to trust their leaders or not.

What cultural message are you sending to your team? Do they feel secure about their positions and your trust in them? As Myers points out, if a culture is neglected, it can lead to worse problems down the road. It may seem abstract, but remembering to cultivate a culture of cooperation, transparency and trust can save you a lot of worry when it comes to concrete issues later on. It’s something I work on every day.

Getting to ‘yes’

As you lead your team, have you found you’re more apt to say “yes” than “no” when someone brings you a really good, innovative idea? Research says most of us lean toward the negative, according to this article from Inc., and that can be a problem.

Inc. cites a University of San Diego experiment in which managers were found to be more likely to say “no” to ideas that customers were enthusiastic about. The experimenters found that “managers perceive the most creative ideas as impossible, even when those ideas are completely practical.”

Think about that person who reflexively disagrees with you no matter what you say (and you know who they are). Doubting the people around you can become a seriously ingrained habit – and a dangerous one. What innovation are you missing because you initially perceive a good idea as being too risky or too difficult?

Inc. had some suggestions for figuring out if an idea is worth taking a chance on – what they called “an adoption litmus test.” Here are the top things you should consider:

• the relative advantage – how does the idea compare to the status quo?
• compatibility – are members likely to adopt a new product if it doesn’t go well with the existing system?
• complexity – how easy will it be for members to understand a new service or product?
• trialability – can you do a test run?
• observability – can members see the results of this service or product?

That last one is important – your members are more likely to give new things a chance if they know they’ll see the difference.