EXECUTIVE EDUCATION. Lou Centini Darden Graduate School of Business University of Virginia. A CUES Executive Report

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1 EXECUTIVE EDUCATION Lou Centini Darden Graduate School of Business University of Virginia A CUES Executive Report

2 Credit Union CEO Leadership Profile Lou Centini Darden Graduate School of Business University of Virginia A CUES Executive Report - 1 -

3 Credit Union CEO Leadership Profile A CUES Executive Report Lou Centini Darden Graduate School of Business University of Virginia Copyright All rights reserved. Credit Union Executives Society (CUES) 5510 Research Park Drive Madison, WI cues@cues.org cues.org CUES grants permission for credit unions that to reproduce the contents of the executive report for use at their individual credit union. Any other use or reproduction in whole or part without written permission of CUES is prohibited. The views presented in this executive are those of the author. They do not necessarily represent CUES views. ISBN:

4 CREDIT UNION LEADERSHIP PROFILE CREDIT UNION EXECUTIVES SOCIETY Biography Luciano Centini Darden Graduate School of Business Administration University of Virginia Mr. Centini is Senior Director Executive Education and Lecturer of Business Administration at the Darden Graduate School of Business Administration, University of Virginia. In his current role, Mr. Centini manages the executive education business at the Darden School which includes over 120 program offerings (both open enrollment and custom) attended by more than 4,500 senior executives from around the globe. His responsibilities include business development (marketing, sales, needs assessment); program design and delivery; and administration. In his role of Lecturer of Business Administration, Mr. Centini teaches extensively in executive education courses at the Darden School. He is the founder and faculty leader of the Darden Executive Education Program Human Resource Forum: Key Strategic Issues in Human Resource Management. He also teaches in Developing Managerial Excellence, and several custom programs. He has also taught courses at the University of Virginia, Cornell and the University of Connecticut. Mr. Centini s current areas of interest include strategic management, leadership, change management, human resources, organizational learning and management development. In addition, he is a consultant to many organizations in the areas of business strategy, human resources, teambuilding, leadership development and change management. A representative list of his consulting clients include: Weyerhaeuser, ABB, Sherwin- Williams, BF Goodrich, Washington Gas, State Farm Insurance, Litton, Bacardi, Brunswick, USAA, Alpha Laval, Standard & Poor s, Social Security Administration, ConAgra, Amtrak, Mars Inc., Allied Signal, PriceWaterhouse Coopers, Equipment Leasing Association and numerous other organizations. Previous experience for Mr. Centini includes almost 20 years of professional management experience in industry, most recently as Director of Human Resources for a subsidiary of the Weyerhaeuser Company. He also has held a variety of human resource and executive development positions with the Berol Corporation and the Miller Brewing Company. B.S., Industrial and Labor Relations, Cornell University; M.S.A., Human Resource Development, Western Connecticut State University

5 CREDIT UNION LEADERSHIP PROFILE CREDIT UNION EXECUTIVES SOCIETY Executive Summary I believe that leadership matters. It sets the successful firms apart from the others in any industry, because without good leadership, nothing really works in organizations. Both research and practical experience have demonstrated the value of assessing leadership effectiveness and providing feedback for improving individual and organizational performance. What this says is that leadership is not a mystical quality that only a select few are born with. Instead, leadership is a measurable, learnable and teachable set of behaviors that can be improved if the desire, awareness and competence are present. We know now that leadership effectiveness is contingent on relationships at every level direct reports, peers and boss. That s why 360-degree feedback has proved one of the most effective catalysts for management development. It provides the tool hard data, in fact for building leaders awareness of their leadership effectiveness and impact on others. They learn what their strengths and weaknesses as leaders are, and are better equipped to develop action plans for improvement. How can credit union executives become better leaders? I recently analyzed the results of a 360-degree feedback tool called Leadership Practices Inventory (LPI) which was administered to 188 participants in CUES CEO Institute III over five years. Interpolating those results to all credit union executives, we can evaluate both strengths and weaknesses in the movement s leadership. The premise of the LPI is giving individual executives and their observers (peers, direct reports and bosses) the opportunity to rate the executive in five leadership areas. The self scores are then compared to the observers. The chart below shows the average results for the LPI s five leadership categories over the five years of CEO Institute III scores analyzed. LPI Scores, CUES CEO Institute Five-Year Average Self Observer Average Score Percentile Average Score Percentile Challenging the Process Inspiring a Shared Vision Enabling Others to Act Modeling the Way Encouraging the Heart

6 CREDIT UNION LEADERSHIP PROFILE CREDIT UNION EXECUTIVES SOCIETY CEO Institute participants rated Challenging the Process (62%) their strongest leadership practice, while their lowest rated practice was Encouraging the Heart (41%). Observers, on the other hand, rated CEO Institute participants highest on Inspiring a Shared Vision (60%) and lowest on Enabling Others to Act (37%). As is generally the case, the CEO Institute participants self-scores were higher than those of the observers. The greatest statistical difference in the scores for any of the five practices is for Enabling Others to Act. It also represents a significant opportunity for improvement being rated lowest by observers. In the case of Encouraging the Heart, on the other hand, there was close alignment between leaders and observers, with both groups rating the practice low....the need for strategic thinking and industry foresight will be critical for navigating through uncertain waters. While Challenging the Process and Inspiring a Shared Vision were the highest rated leadership practices for credit union leaders, they will become even more important to future success. As the pace of change accelerates at an exponential rate and as uncertainty becomes the norm, leaders will need to innovate, experiment and continually take risks. They must challenge the status quo and always question why. At the same time, the need for strategic thinking and industry foresight will be critical for navigating through uncertain waters. There is positive news here. Credit union constituents feel their leaders have done a good job of envisioning an uplifting future. I believe this an opportunity for leaders to leverage the ennobling mission of the credit union movement of serving members to be even further differentiated from other financial service providers. With the increased emphasis on ethics and integrity, the practice of Modeling the Way will take on an even greater role for credit union leaders. It is up to the leaders to establish a set of core values, take a stand for what they believe in and have the courage of their convictions. However, it is not sufficient to simply proclaim a set of values; rather leaders must set an example by behaving in ways that are consistent with the values. As with Challenging the Process and Inspiring a Shared Vision, credit union leaders already have an edge in Modeling the Way. Given all the ethical and accounting scandals in recent years at other financial service providers, credit unions are perceived to be squeaky clean, with a strong moral and ethical foundation. The second action agenda for leaders in advancing the practice of Modeling the Way is to take charge in getting things done. Credit union leaders need to instill a sense of urgency in the organization and create a culture of execution excellence. First they need to set clear expectations, and then they must focus on achieving small wins that promote consistent progress and build commitment

7 CREDIT UNION LEADERSHIP PROFILE CREDIT UNION EXECUTIVES SOCIETY Based on LPI scores, the two leadership factors CU executives generally need to work hardest on are Enabling Others to Act and Encouraging the Heart. Enabling Others to Act an area CU leaders felt they were much stronger in than did their Observers means fostering collaboration, building spirited teams and understanding that mutual respect is what sustains extraordinary efforts. Leaders strong in this area create an environment of trust and empowerment. They enable others to act not by hoarding power but by giving it away. They strengthen others, making each person feel capable and powerful. Encouraging the Heart a recognized weakness of CEO Institute participants and their Observers means recognizing the hard work and contributions individuals make and also celebrating the accomplishments of the team. This keeps hope and determination alive, spurring people to the hard work that accomplishing extraordinary things in organizations requires. Strong leaders show people they can win and link rewards with performance. The importance of improving these two practices is especially critical to the future viability of credit unions. The core essence of credit unions are their personal relationships those with their members and those with their employees. Credit unions are also heart-enabling organizations. These attributes make credit unions distinctive from other financial institutions. There is no question that credit union leaders need to do better at enabling others and encouraging the heart. The continued low scores in these two practices are moving in the opposite direction of where credit unions need to go to maintain their unique position among financial institutions. Is there need for concern? I am optimistic. We know from history that challenge is what provides the opportunity for greatness. It is time for credit union leaders to answer the call for ever-greater leadership. We must emphasize that leadership is a choice. Leaders must have a burning desire to lead and be passionate about making a difference. The good news is that credit union leaders have already established a strong foundation upon which to build a brighter future. Read on for a more complete understanding of the results of this analysis; how the credit union leader profile compares to executives from other industries; what actions make up each of the LPI s five leadership factors; how several CEO Institute participants have used their feedback to improve; and, most important, how you can learn to be a better leader

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