SYDNEY, Australia – What does a league do when the relationship between them and their members is borderline warfare? That’s what Steve Laue had to face when he signed on as CEO of the Credit Union Services Corporation Australia (CUSCAL). When Laue walked through the door in June 2000 to take up his new responsibilities, Australian credit unions were in decline. In 1970 there were 700. By June 2000, there were only 180 CUs, albeit with 3.6 million members and assets of AUS 20 billion (US$10.3 billion). Credit unions had lost the taxation battle, and the banks were on the attack. Margins were minimal. A CUSCAL sponsored credit card program had lost AUS$23 million. Doom and gloom was the mood. Laue had come into CUSCAL with lots of experience in the financial services industry having worked as head of marketing for Commonwealth Bank as CEO of Thorn EMI and Credit Link. He had opened several projects for American Express in Hong Kong and Thailand. He was to draw on this experience through the first difficult months. The organization with 550 employees was bloated, Laue said, and had lost contact with what a league should be doing – serving its members. In some cases CUSCAL staff were positively contemptuous of the members. “CUSCAL lectured and expected them to listen,” Laue said. He quoted from The Culture of Contentment by John Kenneth Galbraith which said that when an organization becomes too content, they not only lose their edge, guns are turned inward. The members were turning the guns on CUSCAL and rightly so, he felt. Laue’s goal was to make CUSCAL a “best of breed” league. In doing so he had to push for radical change. This involved letting some people of the old school go. Immediately that has saved the organization over AUS$12 million during his first year at CUSCAL. He hopes to have the staff down to 300 something next year, those who share the vision of the new culture he wants to create. The next step was the creation of nine centers of excellence: financial services, treasury and operation, human resources, IT, public affairs, moving strategy, e-commerce and corporate governance and a CFO. This broke down the three divisions that had run CUSCAL before he took over. Internal changes were not enough. More important he needed the buy-in of the credit unions and he needed them to perceive CUSCAL was different and would be able to provide the value- added services they needed and wanted rather than what CUSCAL dictated to them. First Laue called a meeting of all credit unions. The room, he said, was set up as a United Nations meeting room. A professional facilitator, Susan Harbon was called in. Laue, who is tall and has a presence, moves quietly, smiles easily and speaks softly, kept a low profile. Unlike previous meetings, CUSCAL as an organization was not visible. “We didn’t talk, we listened,” Laue said, which was revolutionary compared to previous meetings. One of the first things Harbon said, was explain that the credit unions had to let CUSCAL, “out of the failure box”. In doing that, she removed many of the emotional issues from the past that wasted everyone’s time and energy. Then she focused on the future. A 14-person task force was set up. Many of the people on the task force had been highly critical of what CUSCAL had done in the past, but now they were the ones driving the program. The meeting was charged, but productive. Instead of blaming, even rightly so, Australian credit unions were thinking of solutions. At the end of May 2001 the task force came back with a game plan, much of which included aggregation of services such as IT and e-commerce. With such low margins being a problem, the task force felt that each credit union could not afford to develop and/or upgrade the systems they needed to stay competitive. Other economies were looked at. The decision was made by CUSCAL and the task force to hold a vote for all credit unions at a second meeting held in late May. The question would be asked, “Who is in?” All credit unions that voted for the new plan would be invited to lunch to continue the discussing and planning for the future. Anyone who didn’t vote would be asked to leave. There was a lot of nail biting before the meeting. Some board members had their doubts up to the last minute, but the decision was made to go ahead. Ron Dixon, who Laue describes as “the best chairman on the planet,” supported the plan. The question was asked of the assembled credit unions – are you in or out? Everyone held their breath. And slowly the vote came in, yes, yes, yes until they had 100% agreement to go to the next step of the project. “100!” Laue said, a gleam still in his eye. He admits some may fall by the wayside before everything is completed, but he knows that CUSCAL is now on the road to serving the membership. – [email protected]

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