Credit unions are celebrating Leadership Month, so Doug was thrilled to welcome National Association of Federally-Insured Credit Unions (NAFCU) CEO Dan Berger, a significant leader in the credit union movement, to the show. NAFCU provides advocacy, education, and compliance support within the credit union industry. Berger is also an author, economist, and top lobbyist in Washington with over 30 years of executive management and government affairs experience. He has been a senior executive with NAFCU for over 17 years, 10 of which as CEO. However, he shares how credit unions have impacted him his entire life, since he was only nine years old and joined a local credit union in Gainesville, Florida.
Throughout his career, Berger has proactively sought ways to improve his professional skills to build better relationships, communicate clearly and consistently, and remain hyper-focused on strategic alignment. In this “C.U. on the Show” episode, he shares valuable insights, lessons learned, and his tips for other leaders so they can stay on track with their mission and core goals. For Berger, it starts with the team.
Develop a People-Focused Culture
Berger is an active student of leadership, reading multiple professional development books every month, and engaging executive coach John Spence to strengthen his skills. From everything he’s learned, he says it all comes down to people and culture. Under his leadership, NAFCU has created a transparent, informative environment that consistently gains employees’ buy-in and encourages innovation. According to Berger, when you take care of your people, they’ll take care of your members, and everything else tends to fall into place. NAFCU has done this by focusing on three critical areas:
- Defined Hiring Requirements: The organization hires aggressively for culture, attitude, and aptitude. Leaders look for people with an entrepreneurial mindset and team experience who understand how individual performance can affect overall production.
- Organizational Citizenship: Part of employees’ bonuses, from the C-suite to the staff in the mailroom, is tied to organizational citizenship, which measures how well an employee works with and helps others in the association.
- Clear and Frequent Communication: According to Berger, there’s no such thing as communicating too much. In fact, it’s the skill he wishes he had developed earlier in his career to avoid misunderstandings. Whether sharing financials or progress toward goals, NAFCU remains an open book with its employees, early and often, to keep them engaged and on purpose.
Stick to Your Strategic Goals
In addition to hiring right and creating a people-focused culture, Berger says strategic alignment is essential. When he became CEO, he helped NAFCU refocus its core goals by identifying key areas with the assistance of its board and members. The process allowed the organization to eliminate non-essential and less profitable objectives and concentrate its efforts on three main areas: advocacy, education and training, and compliance support.
The three buckets guide NAFCU in its decision-making and budgeting while helping it stay true to its mission and what’s most important to members. It also helps avoid what Berger calls “chasing the shiny squirrel.” With more technology and fintech opportunities arising, he cautions credit unions against diving into every innovation. His rules of thumb for pursuing new initiatives include answering the following questions:
- Does it fall into our core goals?
- Is this something the membership wants and needs?
- Is it in the best interest of the organization overall?
Stream the full episode to learn more from Berger, including:
- Priorities on the NAFCU agenda, including regulatory relief, cybersecurity, and parity across fintech and technology partnerships
- More resources for credit union executives, such as the Berger Leadership Blog
- How NAFCU continually measures progress using the 80/20 rule
Hear the conversation today.
Dan Berger and NAFCU are not affiliated with or endorsed by ACT Advisors, LLC.
Audio Transcription (pulled from the podcast)
Doug English (00:30)
I am thrilled to have a special guest, Dan Berger, CEO of NAFCU, joining us today. With over a decade of leadership experience at NAFCU, Dan is here to share his valuable insights and lessons learned with our audience. In this episode, we delve into the topic of strategic alignment and the importance of clear and consistent communication. Stay tuned for some valuable lessons from one of the credit union movement’s top leaders.
Dan, we’re delighted to have you with us on the show today. And as always, I’d like to hear about how people got started. And where is the emotional connection to the credit union movement?
Dan Berger (01:13)
Well, it starts in Gainesville, Florida. I joined a credit union when I was nine years old. My father was a professor at the University of Florida. And at the time, it was the University of Florida Credit Union; it’s now Campus Credit Union in Gainesville, Florida. Still a member to this day, that was always where we did our banking. We did all our banking at the credit union. And that still occurs today. I’m a member probably of four different credit unions today. My primary financial institution is a credit union, but it’s just how they took care of my parents and continue to take care of my mom; we always just utilize a credit union. They always had better rates, and I got my first car loan for $600 from the credit union. It’s been helpful. I was 16 years old and bought a 1968 Pontiac Catalina, pea green. It was a good-looking vehicle. The credit union has helped me my entire life.
Doug English (02:10)
It’s interesting the stories of that credit union connection you so often hear that affected a lot of us in our young years. I can remember going to the IBM Endicott Employees Credit Union Fair they would put on for the members up in upstate New York. That’s a memory that’s very clear and meaningful for me from my initial connection to the movement.
So now, you’ve been running NAFCU for a decade. And, you know I love your leadership blog. I want to talk about that in a few minutes. But what we want to talk about today is kind of some of your lessons of leadership. Where did those lessons come from? Can you track them back to where your foundational vision of how a leader should behave and look where it’s at? What’s its origin?
Dan Berger (02:59)
Like you, Doug, I do a lot of reading; I probably read two or three books a month, primarily on leadership, change management, things along those lines. You learn but you’ve got to do it. It’s one of those things you can get hints, things to look out for. But it’s from doing and just being in management roles throughout my career. I mean, early in my career, in high school, in college, I ran political campaigns. To manage volunteers, you don’t have a compensation package over them. So you have to motivate them with the candidate, with philosophy and things they want to believe in. So managing volunteers is probably the most difficult type of management you can possibly do. And so that’s kind of where I’ve cut my teeth in it, then I just continue to just read about it and try to execute. When I was appointed CEO almost 10 years ago, I got an executive coach in John Spence, someone else I would recommend to have on your podcast. He has helped me and NAFCU tremendously when we’re trying to change the culture. John was a tremendous help to our association and tremendous help to me personally.
Doug English (04:07)
So let’s get into what has happened at NAFCU, and kind of how the organization sort of was as you initially found it. And I’ve read some of the material. So I know a bit of where we’re going. And I know you refocused the organization into those three key areas. How do you see that? A, could you tell us that story? And then, B, how do you see that as a parallel for the leaders of credit unions? And what ideas might you have for them in running their organizations?
Dan Berger (04:37)
Yeah, we took an overview of the entire organization, looking at all the products and services we offered. And at the time, there’s something like 167 products and services and conferences and stuff we did at NAFCU. And trade associations in Washington, DC, have a tendency to try to be all things to all people. And I said, you’ve got to pare this back. I mean, we’re not focused on it. And 99.9% of people join trade associations for the advocacy— someone to represent them on Capitol Hill, with Prudential regulators, White House Treasury, whatever it is. So we have all this other stuff, that’s kind of noise, and it’s hard to be good at something if you have all these distractions going on. So the first six months of my tenure, I flew around and met with members and non-members, probably 100,000 miles around the country. What do you want your trade association to look like? And every man, woman, and child I talked to said advocacy. The education and training is good, compliance assistance would be helpful, but focus on advocacy. So we created these three buckets. And if anything at NAFCU we do doesn’t fall into one of those three buckets we just don’t do it anymore. We just got rid of all this noise and stuff like that so we could just be hyper-focused on our core values and our core mission. And it’s worked out well; our membership growth has been extraordinary because my colleagues are doing a great job. And my board of directors is phenomenal. I’ve been at NAFCU now for 17 years, and 10 years as CEO, but it’s my colleagues who make this happen, my board of directors gives us the strategic direction and vision. It’s worked out extremely well. From a leadership standpoint, what I would tell others in the credit union movement about leadership is take care of your staff. Really, really focus on staff; create a robust, effective culture at your institution because in turn your staff takes care of the members. So if you take care of your staff really well, they’re going to take care of members very well. And if that doesn’t occur, and you see it and institutions, you see companies all across the country where that doesn’t occur, you get poor customer service or in our case, poor member service. So really focus on that element. But then the second part of that is to focus on the hiring on the front end; refocus aggressively on the front end and get the right people on our bus. And you’ve heard that phrase before: we want the right people on the bus. You want the right people in the right seat on the bus. And the fact is, our bus at NAFCU runs fast. And it’s not for everybody. And we’re extraordinarily aggressive in what we’re trying to accomplish from an advocacy standpoint so we run fast, and it’s not for everybody. But focus on staff, focus on culture. And everything else kind of takes care of itself at that time. But we hire for attitude and aptitude; if you have those two things, we can teach you everything else.
Doug English (07:32)
If you’re a CEO of a credit union, the focus should be on the employees first. Hear that. How do you evaluate where you are today?
Dan Berger (07:42)
We have a robust review process at NAFCU made up of three components. We have our organizational, our company goals, which are set by the board. We try to make all our goals binary, by the way, so it takes a lot of the subjectivity out of it. And so we have organizational goals, usually five or six of them every year. And they’re usually around membership growth, non-dues income, things along those lines, member engagement, things you can measure and have those metrics that can follow it up, that hold me accountable and hold my colleagues accountable. And you always know where you are. I have a dashboard I can look at any point of the day and I monitor incessantly. And I look at it quite often. And that gives you a really good, strong starting point. The second part of our evaluation is your personal review. Your annual review we do. And then the third component is we have organizational citizenship. How do you play in the sandbox? How are you treating your colleagues in building them up within your division or department. So those three components make it up. Our bonuses are tied to that. My bonus is done the same way as my colleagues. The young man in the mailroom, his bonus is figured out the exact same way as mine. And so it’s fair across the board and everybody knows what the goals are. They are very transparent. We give our financials at the monthly all-staff meeting. We give our financials at the monthly management team meeting and where we are on each of those goals set by the board. And so from that standpoint, our disclosure and our transparency gives them the buy-in from a culture standpoint.
Doug English (09:20)
Yeah, so it sounds like when the CEO focuses on their people, it’s in light of their strategic goals. And having those goals pass through each of the systems of the way you are measuring performance, the way you are delivering that message, and the transparency in the measurement of organizational and individual performance.
Dan Berger (09:42)
Doug, you’re exactly right. And you want that alignment throughout the organization. We have our values, we have our mission. And so you want everything from a strategic standpoint to line up and in each of those categories. And each of those parts within your company or within our association. And if they’re not in a line, that’s when you see the wheels come off. And we have hiccups. It’s the 80/20 rule—80% is just humming and doing well; 20% can always be improved. I don’t care if you’re Walmart, I don’t care if you’re Tesla or NAFCU. I mean, the 80/20 rule kind of holds true throughout every organization. And the goal for me as CEO is to try to reduce that 20%. I nibble at it and get a little bit better every day and try to reduce it. So we’re more effective and efficient and focus on the things we want to be focused on.
Doug English (10:30)
And have a CEO who reads two to three leadership books a month.
Dan Berger (10:35)
Yeah, that’s mostly because I don’t sleep well at night. But I do that and truth be told, Doug, I’ll throw a fiction book in there, a mystery of political intrigue or something like that. I’ll read a Jack Reacher book or something. I’ll mix it up a little bit. It’s not all management, change management or leadership books but it’s probably 80% leadership.
Doug English (10:56)
So if you’re listening to this and you’re thinking to yourself, do I have that situation in my credit union? Do I have a situation where I’m not in alignment? And I haven’t focused on my people first? How might that manifest? Would you care to suggest how a CEO might identify when that’s an issue?
Dan Berger (11:16)
Yeah, it starts again, and we talked about this a little bit earlier, it starts with the hiring. It starts at the very beginning and getting the right people in. For me, we kind of have a hiring matrix here. And meaning you have to have your skill set, and sometimes the education background and training that’s required for some of the technical positions we have. But we also want people who were in the marching band, I want people who were in theater, I want people who were in high school or college athletics because you understand where your individual performance affects the overall team. And if you didn’t do any of that, maybe you worked as a team at McDonald’s or Burger King or something. But you had to be a team member where your individual performance affected the overall team, overall company, and the things we’re trying to do. That’s worked. Every time I deviate from that matrix, I get bit in the rear. And so I have found that works really well. And then saying that whether it’s marching band, theater, everything, your individual performance matters to the overall production. That’s the component we look at. And of course, it’s the attitude. You want people with a can-do attitude, who have entrepreneurial thoughts. We pilot stuff all the time. People go, hey, we’re thinking about doing this, test it, see if it works. There’s nothing you can do to burn down NAFCU, nothing. Try it. If it doesn’t work, just don’t do it again. I’ll explain it to the board. Yeah, we invested this in here, it didn’t work, we’re not going to do it again. But we may do it this way next time. And so, we talk about it, we test things a lot. We stopped things a lot. We quit doing a ton of things a little over about 10 years ago. It’s an ongoing process. And it’s an ongoing evaluation. And we’re always looking at utilization. I’m an economist by education. So I’m a metrics guy. I’m a numbers guy. And so I want that. Is this working? I mean, I’ll give you an example, Doug. We used to have marketing awards here. And so we’d have a volunteer committee that would look at all these websites and listen to ads and watch TV commercials and all the collateral material and brochures and stuff. And holy cow, from a cost accounting standpoint, we’re probably spending a quarter million dollars running this program. And ROI was like a few people coming into conferences to go collect their awards. When I went around and said, hey, would you have a problem, Mr. or Mrs. CEO, in me eliminating the marketing award program at NAFCU? One hundred percent of the people said, no, get rid of it. We don’t need it. We don’t want it. And so that’s kind of how we look at it. It’s a numbers game. So now if there were a bunch of people, and two-thirds of the membership said, yes, got to keep the marketing awards, then we’d have to evaluate it. But it doesn’t fall in those core buckets. It’s not advocacy, it’s not education and training, and it sure as heck isn’t compliance assistance. And so having those core strategic goals kept us on the right flight path.
Doug English (14:10)
You’re extremely active and visible in the movement. And so you see a lot of credit unions that are executing these ideas in different ways. One of our previous guests, Maurice Smith, talked about studying failure, and the lessons you can learn from failure are there to teach you how to not repeat those lessons. When you’re engaged with different credit unions, do you think to yourself, gosh, I just wish they would do this? Or I wish they wouldn’t focus on that. Do you see things that are a pattern in the industry that we as a movement need to figure out how to address and push forward?
Dan Berger (14:50)
I think there’s a tendency because change is happening so rapidly now. That’s one of the biggest things I’ve seen over the past 10 years, is that change is so rapid, and it’s getting faster in technology. And you got folks who are in garages in Palo Alto or San Jose who are creating apps to compete with credit unions and banks. And kind of weasel their way into our marketplace without being part of the regulatory schematic financial institutions have to deal with. And I’ve seen it in some institutions, they chase that shiny object, change, we call the shiny squirrel. Don’t chase the shiny squirrel, and stay with your core goals, your mission, take care of your members. And I just don’t want them chasing the next shiny squirrel that’s out there. That’s a concern I have with some of the institutions I’ve seen. The vast majority are doing a fantastic job taking care of their members. They are looking at the technology, making sure they have a platform and mobile technology that is frictionless. People have access to their money. They can transact on their mobile device or on their laptops. That it needs to continue. But with that frictionless, there’s the balance with cybersecurity. The more frictionless you become, cybersecurity sometimes becomes a little bit more of an issue as well. And so that’s my concern—Wells Fargo comes up with some new shiny squirrel and then they want to dive into that realm. Luckily for us, the credit union movement has a tendency to be very conservative, and slow with their approaches and stuff. But some are pretty aggressive and I just want them to be careful in chasing those shiny squirrels. Just make sure it’s what the membership wants, the membership needs, and it’s in the best interest of the overall institution.
Doug English (16:35)
As we look forward, and thinking about the priorities you have set forth at NAFCU and goals for 2023 and beyond, what would you share with us as far as the focus of NAFCU and the things you’re trying to do to help the movement?
Dan Berger (16:52)
The board sets the overall goals in the fall and winter of the year prior; they set the goals for the coming year. And issues that were focused on this year are growth in terms of growth in helping to create a legislative and regulatory environment so credit unions can continue to grow and thrive. And they want to focus on that growth component, while there’s changing field of membership regs or rules, things along those lines, so they can continue to grow. So they continue to partner with fintechs and stuff like that. Which reminds me, the second goal the board gave us to work on is technology and innovation. Make sure there’s parity across the board. So you can partner with those fintechs. And it’s just not the big banks that have access to all that, because the big banks have 200 technologists. You know, BFA has 200 technologists in Charlotte. Credit unions typically can’t do that, they don’t have that ability. So you have to partner with those fintechs out there, you just want to make sure there’s the legislative and regulatory landscape that permits credit unions to get the technology they need to continue to serve their members. And then the third thing—they want us to focus on regulatory relief, and that’s the CFPB, that’s the NCUA, that’s Treasury, and if you’re involving the CDFI grants and some of the delays they’re experiencing with the CDFI program. All that kind of stuff matters so we want to make sure the regulations are appropriate. And the focus is on safety and soundness. But also being able to provide some relief where some of those rules that have been on the books for years are antiquated. So reg relief is a big issue we’re talking about. The next one is fair market; this goes back to fintechs because we want to make sure there’s a fair market out there so credit unions can continue to compete in the financial services marketplace. And that means making sure those fintechs are having mission creep into our marketplace, having to have the same regulatory schematic the credit unions and other financial institutions have to do the hoops they have to jump through. Because some of these fintechs are venue shopping. They’re trying to find the states with the least amount of regulation. They don’t have any federal oversight. Those are the problems and that’s not good for the American consumer. And so we just want to make sure we have a level playing field when it comes to that kind of fair market and fintechs being in our marketplace. And then last is a no brainer, data protection and cybersecurity. And when I speak to CEOs around the country, that’s the one thing that keeps them up at night. It’s making sure that members’ information and their members’ money is protected, and trying to find a way to hold the retailers and merchants accountable for all the hacks that go on at their businesses. Because in most instances, it’s not the credit union that gets hacked. It’s these retailers and merchants. If you think back to Home Depot and Target and etcetera, it’s not the financial institution.The financial institution gets blamed for having to reissue the cards and all the hoops you have to go through as a consumer to deal with that, but it’s retailers and merchants, so data security and cybersecurity is probably the last component the board wants us to focus on.
Doug English (19:55)
That’s a great agenda. Now, if you can take yourself back to the beginning of your involvement in the movement, or maybe the beginning of your involvement as a senior leader in the credit union movement, what advice would you have wanted to give yourself back then? We’re sharing that advice for folks maybe earlier on in their executive career in the credit union movement.
Dan Berger (20:22)
I would encourage if folks have the financial wherewithal to get an executive coach if you’re looking to move into senior management, if you’re looking to get into the CEO chair. Very helpful. I wish I would have learned, even before I had an executive coach earlier in my career, the importance of communication. To be able to communicate, and communicate properly. And I’m not talking about talking in podcasts or public speaking in front of 2,000 attendees at a conference; I’m talking about communicating with your colleagues, with your staff. Because you have to do it nine to 12 times for a message to stick. And I wish I would have learned that because you say it once or twice, and you think they’ve heard it, they might have heard it. But the men and women in this world are extremely busy, they have stuff going on in their personal lives, family, you got kids to take to athletic events and recitals. There’s a lot going on in people’s lives. So they may not have heard it completely the first or second time or even the third time. So the ability to communicate and communicate often. And that was probably one of my biggest failures early on and probably throughout my career, quite frankly. Things get miscommunicated. It’s important to have the ability to learn how to communicate early and often. And the bottom line I’m told all the time by my executive coach is you cannot communicate too much.
Doug English (21:45)
Communicate early, communicate often. And even when they say, we heard you, keep going.
Dan Berger (21:53)
Do it again. And what is the old advertising mantra, consumers have to hear it at least a dozen times for it to stick or something, for a brand to stick? And so you may have heard it but they need to hear it over and over again. It would have been very helpful if I would have learned that a little bit earlier in my career.
Doug English (22:15)
So for action items for someone who might have been listening to the podcast, an executive coach you’ve been using is John Spence, is that right?
Dan Berger (22:23)
Yep.
Doug English (22:24)
How would a listener find John Spence?
Dan Berger (22:26)
He’s on the web, you can google his name. I think his website is Johnspence.com. He has a book I bring out often; it’s awesomely simple. And he goes through a lot of these leadership concepts. He does training for credit union CEOs but he also does training for Apple and IBM, and he does all these Fortune 100 companies as well. He is just a wealth of knowledge. He has seen it all. I mean, as a business consultant, he’s seen it all. The good, bad, and the ugly. He’s very direct; he tells you what you’ve done really well, and he tells you what you still suck at. And that’s kind of the way I like to be dealt with. You don’t have to be gentle with me. If I need to improve on something, then be very direct. And I liked that approach. But he’s terrific. I strongly recommend reaching out to him and at least reading his book because it’s one of the more life-changing books I’ve read from a leadership standpoint.
Doug English (23:24)
But the other recommendation I would have is they read your leadership blog, which I find to be outstanding. And the way to find that is to go to the NAFCU website and search under the leadership blog?
Dan Berger (23:38)
Yep, it’s the Berger Leadership Blog. It’s at the NAFCU.org website.
Doug English (23:43)
Very good, Dan. Well, as we wrap up for today, any final thoughts for our listeners, any other messages from you or from NAFCU to propel the movement forward?
Dan Berger (23:53)
Yeah, it’s a great time to be a credit union, Doug. It really is. There’s some headwinds that are out there. We all know about inflation and possible recession coming. But credit unions were built for this and you have the ability to improve people’s lives and your members’ lives, and in turn, improve your communities. You’re built for this and go at it and they’re going to need your help here in the coming year or to be there for them. And make sure you take care of your staff so they take care of your members.
Doug English (24:20)
Awesome. Thanks very much, Dan.
Dan Berger (24:22)
Thank you, Doug.
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