ORLANDO, Fla.-After heavy losses in 2009 and 2010, Pioneer West Virginia FCU's $1-million net income in 2011 seemed so incredible that it drew some pointed questions from NCUA examiners-and has prompted many credit union CEOs to ask, "how'd they do that?"
At Credit Union Journal's Grow Show here, May 29-31, Pioneer West Virginia CU EVP Dan McGowan will share the secret behind the CU's newfound success.
Offering a preview of what he'll discuss at the Grow Show, McGowan noted that one of the first steps toward turning the financials around at the credit union was turning around its demoralized staff.
The numbers, alone, were bad enough: three years ago, the $148-million, Charleston, W.Va. CU had combined losses of $300,000 in 2009 and 2010. But on top of that, the CU's employees were so downtrodden by the previous management style that they were embarrassed to wear the CU's logo.
Dan McGowan was part of a new management team that was installed in 2010-with McGowan at EVP and chief financial officer along with CEO Dana Rawlings and Trevor Hyre as chief operating officer. McGowan said there had not been a CFO for three years prior to his arrival, which was just one of many problems. Just two years later, NAFCU named Pioneer West Virginia its Federal Credit Union of the Year for CUs with less than $150 million in assets.
"This is a story about the resilience of the human spirit, if properly nurtured," McGowan said. "The previous CEO left a very demoralized workforce. We heard surreal stories from employees about the things they experienced-objects thrown at them, being told they were worthless being the lowlights. We were the laughingstock of the local credit union community. Employees told us they were ashamed to wear the credit union's logo out in public."
According to McGowan, the board tried to work with the previous CEO and give him the benefit of the doubt, but in early 2010 Rawlings was brought on board. As the new team sought to rebuild the CU, McGowan said nothing they did was "rocket science."
"We started with creating a nurturing environment," he recalled. "Some employees had not had a performance review in three or four years. We set up goals and incentives. I believe in the old saying, 'success begets success.' That means confidence. The people here had been beaten down, and by building up their confidence through small victories got people to slowly but surely buy into the vision."
Because the staff had been beaten down for so long, McGowan said he and the new managers definitely had to prove themselves. ("There were some skeptics, and rightfully so.") One move that worked was switching people to new roles where they have bloomed and become great professionals, he reported.
Three words to live by when managing others, McGowan said, are nurture, cultivate and reward.
But it wasn't just about re-teaching employees to feel good about themselves and the credit union-it was also about improving the CU's position and reputation. "It used to be when auto dealers could not find any other fool to lend money, the loan ended up over here," he said. "We cut off that indirect lending program, improved our mortgage department, and continued to build success over success. Investments improved dramatically, as previously we were invested only in overnight funds."
Session: From Sow's Ear To Silk Purse
Speaker: Dan McGowan
Focus: Learn how the new management team rebuilt a demoralized staff and took the CU from posting losses to profitability.
What: CU Journal Grow Show
Where: Ritz Carlton, Orlando
When: May 29-31