Last week I traveled to Lake Jackson, Texas, just south of Houston, to attend the retirement celebration for Ed Speed, CEO of Texas Dow Employee Credit Union(TDECU). Ed took over as CEO ten years ago, when the credit union had assets of about $700 million and just 70,000 members. Today it’s nearly triple that size, with $2 billion in assets and 170,000 members.
TDECU’s business success is due largely to the upgrade in the company’s corporate culture that Ed began to engineer from his first day on the job. In his speech to the banquet crowd Ed denied he was responsible for the culture change, and he was half right in making that denial. No corporate culture can ever be built, installed, planned, or managed successfully from the top down. Engineering a successful culture change is a case study in bottom-up thinking, because a company’s culture bubbles up from its employees, although company policies and processes certainly do affect it (usually providing more obstacles than advantages when it comes to customer-oriented cultures).
Now TDECU is not a Peppers & Rogers Group client, but our consulting practice frequently does help companies that are saddled with cultures they would like to improve. At most companies, in fact, we’ve found that the corporate culture (i.e., the “unwritten rules” that govern employee expectations and behavior) is one of the main roadblocks to better financial performance. As a result, we have a lot of experience in expediting corporate transformations and I know that Ed’s approach was spot on.
But what exactly was this approach? If the CEO can’t actually direct a change in culture, then how exactly did the credit union’s change? In a nutshell, it happened because Speed was able to encourage some interested rank-and-file employees to take on the responsibility themselves. This group of employees latched on to the idea that in order to genuinely serve members and return to a more family-like atmosphere, the credit union should adopt what they called “REAL” standards (for Reliable, Efficient, Accommodating, and Loyal). The employees themselves wanted to improve the credit union’s service, and my impression from talking with a number of them was that the culture-change effort quickly took root and became a kind of rallying cry for everyone, providing a sense of camaraderie and an esprit de corps that infused the whole effort.
In addition to meeting with Ed, I had lunch with incoming CEO Steph Sherrodd(pronounced “Sher-ROD”), and at Ed’s retirement banquet that evening I sat at a table with Steph and her husband Kevin, along with a couple of Steph’s mentors from her pre-TDECU days. Ed recruited Steph in 2004 from her position as Chief Operating Officer at a Wyoming credit union, and began grooming her to be his replacement almost immediately (talk about succession planning!). In 2011 the Credit Union Times named Steph a Woman to Watch and a lot of people have indeed been watching her.
For now, I just wanted to share this story with you, because I know that virtually every manager signed in to LinkedIn will have wrestled with the issue of corporate culture at one point or another. In upcoming posts I plan to talk a lot more about the subject, but meanwhile all comments are welcome!