Post's First 100 Days full of Politics, Labor Relations and Getting Complete View of CUNA Mutual

MADISON, Wis. – When Jeff Post landed the CEO job at CUNA Mutual he entered an industry he didn't really know and joined a company that has turned out to be much different structurally than the one he left. Put those two factors together and Post has had to become a student both of the credit union industry and CUNA Mutual. Throw in the fact that he arrived during a bitter labor dispute, and Post has had to work on his labor relations IQ as well. “One hundred days into it I'm feeling good about my learning curve, but it's still pretty vertical,” quipped Post. Post says he's working hard to learn all the ins and outs of the industry, especially the various political aspects, which industry veterans know can be treacherous ground if not navigated correctly. All in all Post says he's thrilled with the job and especially the industry. “It's a much different feel, a much better feel,” he said, comparing the credit union industry to the property & casualty world he left. He was CEO of Fireman's Fund Insurance Company in California. “The fact that we are so aligned as a movement compared to the property and casualty industry is so powerful.” He acknowledged that there are a lot of topics credit unions can't agree on, but what's unique is there is so much communication in the industry and sharing of problems, successes, ideas, etc., and the focus is on serving members better. Post, a certified actuary, is an insurance guy through and through, but he understands his role as CEO of a vendor with the greatest presence in the industry and because of that isn't sitting in the ivory tower. He's been getting out and traveling to various league meetings, including Hawaii and Colorado, and sitting down with leading edge CEOs at the CEO Roundtable, for example, in Palm Springs, Calif. a few weeks ago. He is anxious to hear different perspectives from CU leaders. At the time of this interview, Navy FCU CEO Cutler Dawson was scheduled to visit with him at CUNA Mutual's Madison headquarters the following day. “One of the things I wanted to do was to reach out and really understand my organization from the outside in. That to me is half the battle.” He's spent a lot of time with CUNA CEO Dan Mica and understands CUNA's role as the lobbyist of the industry. “That's really Dan Mica's job, though some things are about CUNA Mutual that aren't Dan Mica issues,” said Post, and for that reason CUNA Mutual does keep a lobbying presence in D.C. with Larry Blanchard. Issues like asbestos reform and tort reform are two current issues that would affect CUNA Mutual as an insurer, but not the credit union industry. Tuning Up CUNA Mutual Having spent a lot of time with CEOs, he is getting a feel for what CUNA Mutual needs to do better. “The biggest concern that I think the large credit unions talk about is we tend to have a one size fits all mentality. I think because of that there are some people who have had bad historical relationships with the organization. I'm trying to reach out to those folks,” said Post. Product penetration is another area of concern. He is thrilled that CUNA Mutual has such an extensive field staff with 1,400 sales professionals, but doesn't think enough has been done to penetrate the large CUs, and CUs in general, with more products. On his to do list is to hire a Chief Marketing/Sales Officer type of position to coordinate sales efforts. “We want someone who has the panache to interact with some pretty complex corporate accounts,” said Post. Post identified management structure as an area in need of repair. During the interview process he was surprised to learn that CUNA Mutual really only had two layers (if you can even call it layers) of upper management – an executive team made up mostly of VP and SVP types and then the CEO. “You had a CEO and 15 direct reports. That really causes a lot of things to happen that aren't healthy for an organization. Any time a decision needs to be made from one of these 15 silos, it goes to the CEO. That's inefficient, it doesn't allow for a quick response,” said Post, not to mention it's not good for succession planning. So Post has started to add another layer above the existing layer and below him. For starters Jeff Holley, who was CFO until being named interim CEO during the CEO vacancy, has been promoted to Executive Vice President, CFO. Post said Holley now has more authority and isn't just going to be hawking the balance sheet, but the entire financial operation of the company, including risk management. Post couldn't have been all that bad to work for at Fireman's Fund given that he been able to attract some of his former top lieutenants to fill some of these new positions. This might be easier said than done given that Fireman's Fund is in California and CUNA Mutual in Wisconsin, nothing against Wisconsin but it's quite a climate changes. “Maybe it's because I'm a pushover,” he said. He brought in Dave Lundgren as Executive Vice President, Chief Administrative Officer. “That's the guy who manages your back room, IT, communications, HR,” said Post, who has the highest regard for Lundgren. “He worked directly for Jack Welch at GE, ran businesses in China. He's an incredibly smart guy.” At press time, the company was set to announce the hiring of David Sargent as SVP, Corporate Strategy and Transition. Post described Sargent, also from Fireman's Fund, as the “process czar”, someone who will help align the company to be more efficient. “The team is forming nicely. We're not hiring people to replace people, none of these jobs existed before at CUNA Mutual,” said Post. Post will soon start working on bringing on a Chief Operating Officer. When Post was hired, he expected some turnover at the company – that hasn't really happened yet. “We will push up the bar on performance. I think it's good for an organization to have healthy turnover. Having said that, let's make sure the people we are losing aren't the high performers,” said Post. He compared turnover to good and bad cholesterol, one you can't wait to get rid of, the other you want to hold on to. CUNA Mutual as a whole has very little turnover – only about 4%, which brings up a sore spot for Post – the labor dispute. “If we were underpaying people and doing everything they accuse us of doing, we wouldn't have a 4% turnover rate,” said Post. Post is frustrated by the labor situation, but said he's doing everything he can to resolve it without giving away the store. “Sure we could get this done. We could give them all a 30% raise, but that would hurt my product in the marketplace. What I'm trying to do is walk that fine line between being fair to the employee and fair to my customer,” said Post. He's been discouraged by the rhetoric coming from some union leaders as well as the antics such as sending Valentine's Day cards to his chairman asking her to open her heart to a new deal. He wants the debate to be about the facts, and says if you look at the numbers CUNA Mutual is already paying above market to its union employees. The union has maintained to the press at least that it's not about money (though that seems to be changing), but about CUNA Mutual taking away some of its rights and wanting to be able to add outsourced positions without the union's consent. It hasn't been widely reported, but CUNA Mutual just recently revamped its proposal to the union. The ball is in the union's court and they haven't responded yet. Post is concerned that the union might not put the proposal to a vote to let the employees decide, and he's probably right. OPEIU Local 39 Business Manager John Peterson said the union believes the company is not offering enough retroactive pay from when the new contract should have been done. Post said the stalemate is not for lack of trying on management's part. He brought in Peter Hurtgen as a consultant to represent the company. Hurtgen is a veteran of labor negotiations who was appointed by President Clinton to the board of the National Labor Relations Board and appointed chairman of NLRB by George W. Bush. He also served as Director of Federal Mediation and Conciliation Service under Bush and has helped negotiate some landmark deals. Post himself has met personally with the Office of Professional Employees International Union President Michael Goodwin to try and hammer out a deal. He's flown to Washington D.C. four times to meet with Goodwin, with no major breakthroughs yet. He says the dispute is not rocket science, so what is it? It may be that CUNA Mutual has been too generous over its history to employees and has set a bar of expectation that is too high for the company to meet any more, said Post. Post is still reviewing the company's product line, but it sounds like CUNA Mutual may have its irons in too many fires for him. “At Fireman's Fund we did what we called a strategic lens process, where we asked some pretty basic questions. Is there a big enough market? Do we have the internal experts to deliver? Do we have the right distribution channel? Is it a market that is going to be here today and gone tomorrow?” These are the questions that are starting to get asked at CUNA Mutual and while Post would not say what products might need to be scaled back or eliminated, he said the company must focus on what it does best – credit union protection. But it could also distribute more products to individual members. He threw out the idea of partnering directly with auto manufacturers to broker cars to members below dealer costs. CUNA Mutual also has high-performing mutual funds that more members need to know about, he said. “There are huge opportunities with this organization.” On the home front Post is readjusting to Wisconsin. The move from California to Wisconsin was not as dramatic for Post given that he graduated from the University of Wisconsin so he knows the terrain. Post is still settling into his new home with his wife Peggy and five-year old golden retriever, R.T. One of his passions is working on cars, specifically muscle cars. He has 13 cars in all – his favorite a Dodge Charger. In fact his dog R.T. was named after Road & Track magazine. “There's nothing better than taking something that doesn't run quite right and fixing it, making it hum. For me, this is as true about old cars as it is about a business,” said Post. -pgentile@cutimes.com