LAKE JACKSON, Texas-On Oct. 1, Ed Speed will officially retire as CEO of Texas Dow Employees Credit Union, better known as TDECU. During his 10 years as CEO Speed oversaw asset growth of 300% to $2 billion from $700 million, and lending growth of $400 million, along with a 15-fold increase in branches. Below, Speed shares his insights on the lessons he's learned along the way, and what might be ahead for credit unions.

CU Journal: How did you come to be involved in credit unions?

Speed: In 1985, Government Employees CU of San Antonio (now SACU) was the largest CU failure in NCUSIF history with $300 million in non-performing MBLs. I was a project manager for a real estate developer who had millions of non-performing MBLs with GECU-SA. When the loans started to fail, the NCUA hired me onto the workout team because I knew more about the properties than they ever would. I was hired on the 'It takes a thief . . .' approach. I stayed for 18 years and learned the business from Jeff Farver.

While the FDIC and RTC destroyed the Texas banking and S&L industry by slashing and burning borrowers rather than working with them, the NCUA took a very thoughtful, measured and financially sound approach. If a borrower was working hard to keep a business afloat and not dissipating the collateral, the NCUA took the approach that the borrower had "skin in the game" and tried to work with them. They sometimes even let us advance additional funds. It worked. That is why I have deep respect today for the NCUA, which is showing the same effective approach during these most recent tough times.

CUJ: What advice would you have for a new CU CEO just starting out?

Speed: Do whatever it takes to get to know the "The Three Wise Men" of the credit union movement: David Hilton of D. Hilton Associates, Dennis Dollar of Dollar Associates and Robin Hoag of Doeren-Mayhew, CPAs. If you can't afford to retain them now, call them anyway. They'll talk with you. No one understands better than they how to make a credit union great.

Hilton knows everyone and is the most pragmatic, common-sense credit union industry professional around. You can't make a mistake that he has not seen. Dollar understands credit union strategic planning and working with regulators better than anyone. He will help you with your board in ways you can't imagine. Hoag has exceptional business acumen and understands that a good audit firm delivers more than accounting reports. He has a wealth of best practice observations he readily shares.

There are going to be days you will hate your board, members, staff or regulators-sometimes all at once. These men can keep you sane. Listen to them. Learn from them.

If you have only one book in your library it should be "Up The Organization," written in 1970 by the late Robert Townsend. It's my management bible. Amazon sells it.

CUJ: What have you learned about driving and managing growth?

Speed: Your whole credit union has to be oriented to growth. The biggest barrier to growth is inconsistent messaging from the board and senior executives.

Once a growth mentality is part of the culture, construct the balance sheet risk profile and set the financial "guardrails." The best person to get on your side to help you is Emily Hollis at ALM First. Once that is in place, run the credit union as hard and as fast as possible within those parameters. Be unrelenting.

Don't waste money on surveys asking your members to rate you compared to other banks and credit unions. We ask our members how we stack up against their favorite restaurant, department store, vet, hairdresser, etc. Beat those and you'll have more business than you can handle.

Quit whining about the regulators restricting growth. TDECU achieved incredible growth under the same regulations as every other credit union. In the past nine years our team grew TDECU 400% in loans from $400 million to $1.6 billion, assets from $700 million to $2 billion and members from 68,000 to 175,000, all while remaining well-capitalized at 8%. Regulators did not slow us down a bit.

CUJ: What have you learned about attracting and managing good people?

Speed: If your executive office areas are nicer than your HR department's, your priorities are screwed up.

At TDECU, we live by the maxim: "If you're not directly serving a member, then you had better be 100% at the service of someone who is." Too many CU executives think that their employees work for them. The employees work for the members, they only report to management. A great internal service culture is the absolute prerequisite to a great member service culture. Twice a year our member-facing employees get to rate the rest of us on how well we serve them. These scores are far more important than member service scores.

Get the internal service culture right. You'll attract good people who will attract more good people. And they'll stay a long time.

When I became a CEO I was sure that I had great executive-level "soft skills." It turns out that I didn't and made some serious mistakes. If you find yourself in the same circumstances, get an executive coach. Jim Cardwell of Cardwell Group helped me. He's one of the best in credit union land.

CUJ: In particular, you have overseen broad expansion of your branches, from two to 30. What have you learned about building and managing branches?

Speed: You can spend a small fortune on branching consultants or you can just put branches close to Walmart, which is where the consultants will tell you to locate them. Better yet, put the branches as close as possible to a Wells Fargo branch. They know how to select great locations; they just don't know how to provide great service. Put a big sign in your window that says "If your bank just made you mad, come see us." Not only will you get their customers, you'll get their best employees. Four of our most recent new branch managers came from Wells.

Once you decide on the general area spend twice as much as you wanted to spend on land and get a superior location. There's a reason that the land is cheaper two blocks off the best corner and down a dead-end street.

Don't get fancy with the décor. Spend the money on employees. A poor service experience will still suck while sitting on an art-deco chair sipping a latte.

CUJ: What is your view on the future of credit unions, if there is to be one?

Speed: There will be a bright future-a true renaissance-for credit unions provided we get over our movement's paralyzing inferiority complex. CU trade associations have positioned themselves as guardians to protect us from regulators, legislators, taxes, banks and, worst of all, ourselves. Speakers at vendor-controlled conferences scare the hell out of small credit union managers and directors. Think about the chilling impact this has on growth when less than half of all CUs have under $19 million in assets.

I'm convinced that our future lies with the small credit unions, but only if we can heal the toxic, timid, frightened mentality that is suffocating our movement. Right now, the last remaining bright beacon of light is the Credit Union Executives Society. The only CU conferences and management education I trust are CUES-sponsored.

If I can help, I will. There will be no paid consulting, turn-around or temporary CEO employment in my future. My advanced degrees are in philosophy and theology. I have already been offered university teaching positions. After listening to Greenspan, Bernanke and my friend, Jim Blaine, for two decades, contemplation of the Divine mysteries is a lay down. For free advice of dubious worth, e-mail

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