How to Create a Culture of Innovation at Your Credit Union

As the rapidly changing world demands our continual evolution, most credit unions see the critical need to boost innovation in every aspect of operations. According to a BCG report, 79% of companies now rank innovation among their top three priorities.

Innovation makes good business sense. A 2021 McKinsey global survey revealed that the top ten percent of high-performance companies earned almost twice as much revenue from products and services that didn’t exist a year before. Credit unions are increasingly looking for ways to innovate in terms of their product and service offerings, internal processes, recruiting, and even learning & development efforts.

There is no shortage of advice on how to innovate. Scores of books, podcasts, apps, and TED Talks are full of quick tips on how to snap your organization into focus to instantaneously become more innovative. But there's one big problem with this "get innovative quick" concept: success depends on the mindset of your employees. And that requires changing your culture.

Most cultures are set up to be innovation-antagonists. Since the industrial revolution, our organizations have been geared to replicate success, mitigate risk, and maintain consistency. We tend to see failure as a negative. Our teams move like well-oiled machines, racing forward in the same direction in a straight line toward success, with no zigging or zagging along the way. This approach is great for delivering more of the same. Admittedly, there's nothing wrong with it ... especially if "the same" is what your members want. The thing is, your members and the world around them are changing faster than ever before, and what they want will continue to change.

Innovation is critical for your credit union's survival. But it's not as easy as flipping a switch. Here's how to create a culture that supports innovation:

1. Embrace failure.

All of the factors that contribute to greater innovation—creativity, risk-taking, embracing failure, collaborating across silos—they can make your "well-oiled machine" feel like it's broken. But that's only if you're expecting things to work the old way.

Changing your expectations means knowing that up to 40% of new products fail, but embracing innovation can still lead to double the revenue growth of competitors. Armed with this knowledge, you can embrace failure as a necessary step to innovation. When employees understand that failure is a learning process to be embraced rather than a pitfall to be avoided, they feel more psychologically safe to be creative and take the types of risks that lead to failure ... and ultimately, successful innovation.

2. Lead by example.

While it's crucial that you communicate your embrace of innovation in the workplace, words are not enough. People respond to what you do, not just what you say.

Be consistent with your stated goals on innovation and back them up with tangible actions such as: providing resources for innovation projects, rewarding creativity over playing it safe, celebrating failure as a learning experience, and setting aside time for seemingly less "productive" activities like brainstorming, meditating, or mind-mapping.

3. Encourage slow-adopters.

You can't force creativity, but you can nurture an environment where people feel safer to express ideas. For some—especially those who have spent a lifetime in cultures that alienate people for being different—this can be a slow transition.

Encourage slow adopters to take small steps at first. They may feel more comfortable thinking about incremental improvements rather than entirely new inventions. These types of innovations are still innovations, and they can be extremely valuable. Celebrate progress, no matter how small. When nurtured by the right culture, slow adopters will eventually open up and become more fearless innovators over time.

4. Be agile. 

Recognize that fostering a culture of innovation requires doing things differently and your typical adherence to deadlines might not be the most conducive to successful innovation efforts. That's because innovation requires your team to be open to new learnings and little surprises along the way. 

For example, you may have thought that a new service would be ready to launch by X date, but what if in the process of getting it ready for launch, your team discovers a better solution? While deadlines are useful for focusing your team's efforts and energy toward a finish line, they should not be seen as unwavering and abrupt ends to the innovation process. 

That's not to say that every innovation needs to be "perfect" before it is launched (see step 1). Sometimes, it may be appropriate to launch a program or service before it is 100% ready in order to test its performance and continue to improve it along the way. Every circumstance is different, and that's why your approach needs to be flexible.

When it comes to innovation, culture matters. Research shows that organizations with strong innovation cultures are ten times faster at developing new products, their offerings are three times more likely to meet customers’ needs, and they are more than four times more likely to see significant growth from R&D investments. 

There are many resources on innovation that can be valuable sources of inspiration and motivation. But before you jump in, make sure your culture is primed and ready.

About the Author

Sandra McDowell, MA, PCC, CPHR

As the founder and voice behind eLeadership Academy™, Sandra McDowell helps leaders and organizations increase performance and well-being by leveraging neuroscience insights to harness the untapped power of the brain.

About eLeadership Academy™

Exclusive to credit unions, eLeadership Academy™ is the only online training solution that provides accessible, actionable training to develop high-performance CU leaders. We are on a mission to help build leadership and coaching bench strength within the system because we know credit unions are a force for good, and their leaders are the catalyst for member and employee experience. For more information, visit www.eleadershipacademy.com or contact [email protected].