By: Lynn Heckler, Chief Talent Officer, PSCU
Due to rapid changes in our business environment combined with digital transformation, the rules of business are being rewritten. The credit union industry needs to quickly evolve and continuously reinvent itself, or it runs the risk of watching as it gets disrupted.
Many factors are driving business transformation, including industry consolidation, increased member and employee expectations and, yes, the war for talent. However, arguably nothing will impact the future of the industry more profoundly than the availability of new technology and our ability to leverage it to meet the evolving needs of credit union members. If we are not already looking at how to hire, engage and lead digital talent, we are already behind the curve. Embracing new technology is only the first step to becoming a digital organization. It also requires new processes, skill sets, mindsets and talent.
First, we must agree on what defines digital transformation and digital talent. For discussion purposes, let’s define digital transformation as leveraging technology – such as data analytics, machine learning, robotic process automation, AI and new digital products and services – to solve problems and create the future of business to ensure credit unions can compete. Digital talent encompasses individuals who are skilled at using today’s digital technology and adaptable enough to quickly learn and leverage emerging technology to keep credit unions relevant.
However, the crux is that it takes a very different leadership profile to be a successful leader in this new age of digital talent than historic leadership models.
MIT Sloan Review and Deloitte conducted a five-year study to identify the top characteristics digital leaders need to be successful. The study found we should not abandon foundational leadership principles as leaders still need to be financially savvy and have strong project management, communication and execution skills. But we must add some new skills to our leadership toolkit in order to effectively lead in the new digital environment. We can identify and develop the new competencies that will be required going forward, while paying homage to traditional leadership skills.
Digitally savvy leaders understand how digital technologies like social, mobile, analytics and the Internet of Things (IoT) can impact a company’s success. We need individuals who are skilled in these technologies today and also have the ability to quickly navigate and figure out what the emerging technologies of tomorrow will be for credit unions. But it is not only understanding basics of the new and emerging technologies, but also possessing a more agile, innovative mindset of continuous learning. The term “growth mindset” is sometimes used to describe the combination of competencies required to successfully lead in the new digital business world.
Credit unions should consider rethinking leadership competency models and creating immersion programs for leaders to develop skills in this area. This can be a combination of self-directed learning, instructor-led training and some immersion programs, but creating a culture that fosters digital leaders must start at the top. Digitally savvy leaders need an environment that supports and fosters a growth mindset; otherwise, they will likely not be at that particular credit union for very long.
PSCU is developing a multi-faceted approach to support both the development of technical knowledge and a growth mindset for leaders and individual contributors. We recently held a lunch and learn on deep machine learning with a professor from a local university. The team members who signed up to attend this voluntary session were a diverse group of GenX and GenY participants with a genuine thirst for learning – exactly the people in which we need to invest!
Hiring and retaining talent will be an intertwining of buying and building digital leaders. Credit unions will have to be vigorous in assessing and training existing talent, while also hiring new digital leaders to use as role models.
In this highly competitive labor market, skilled digital talent comes with a high price tag and expectations of a flexible work environment. Geography plays a role as well. For example, in order to attract and engage the digital talent and leadership required to build and deploy PSCU’s new digital banking platform, we opened an office in San Ramon, Calif., where digital talent is more readily available than our other locations. Smaller organizations may need to be even more flexible and creative in order to find the required talent. Remote work, shared resources and partnering with universities are just a few avenues to consider.
Accessing and identifying existing leaders who are capable of leading digital transformation are challenges. Digital savviness in the senior executive ranks in financial institutions is not excessively abundant today. Each credit union has to figure out where it is today, determine where the gaps are and put initiatives in place to fill them. For example, CEOs who are not digitally savvy would do well to hire a COO or CIO who understands emerging tech and is willing to mentor other leaders.
Digital transformation is an evolution that will require strong, skilled leadership for many years to come. Focusing on and preparing digital leaders for the future now will ensure credit unions can effectively leverage all the amazing technology coming our way.