What Does it Mean to Bank on a Human Scale?

Credit unions are known for the emphasis they place on building authentic human relationships with their members. But at the same time, digital advances and other trends are transforming the financial industry, pushing credit unions to keep growing beyond the small size that made human relationships so feasible.

George Hofheimer, former EVP and Chief Research and Development Officer at Filene, returns to The Remarkable Credit Union podcast to discuss his new book, Banking on a Human Scale, and to address this month’s BIG Question:

How can credit unions operate on a human scale to thrive in a world that worships growth and technology?

Key takeaways

1. George thinks credit unions do well at empathizing and creating reciprocity with their members, but they have a big opportunity to create small gestures to strengthen their relationships. One local real estate company in Portland sends new homeowners a simple guide to setting up a block party along with a prefilled form to the city for a permit – what can your credit union do in this area?
2. Many credit unions – all organizations, in fact – get stuck in either making decisions from their gut or demanding endless research before they take action. The concept of “appropriate research” is really powerful to address this. When it comes to qualitative research, just asking 20-25 members will get you 90% of the way there if you have something you want to explore.
3. Innovation can be an overused word, and real innovation is about solving old and new problems in new and novel ways – and the best problems are often the old ones. And innovation is really a cooperative effort, not a solitary one.
4. To really differentiate, which George thinks will be critical in the coming years, requires a willingness to create a love-hate focus where some people will love you but others might hate you.
5. It’s an interesting thought experiment – tithing as a credit union movement. What would happen if all credit unions committed to donating 10% of their operating income to charity?
6. Check out Banking on a Human Scale to learn more about George’s thinking

Read the full transcript here:

Cameron:
Hello and welcome to another episode of the Remarkable Credit Union podcast. We created our podcast to help credit union leaders think outside of the box about marketing, technology, and community impact. Each episode we bring on expert guests from inside and outside of the industry for conversations about innovation. Our goal is to challenge your preconceptions about business as usual, and provide you with actionable takeaways that you can use to grow your membership, improve the financial health of your cooperative, and magnify the positive impact you have in your community. I’m Cameron Madill, CEO and one of the co-owners at PixelSpoke.

Kerala:
And I’m Kerala Taylor, the senior manager of marketing at PixelSpoke, and also a co-owner. The big question we’re going to tackle today is how can credit unions operate on a human scale to thrive in a world that worships growth and technology? I’m very excited to welcome to our podcast George Hofheimer. He’s the former EVP and Chief Research and Development Officer at Filene. He’s also a proud father of two who is somehow still playing soccer in his fifties. Having scrimmaged with my kids in basketball over the weekend and definitely suffering the physical consequences of that, I’m very impressed. And not only that, he rode a bicycle across the country a couple years ago to support RIP Medical Debt, and we actually had him on the podcast back in 2021 to talk about why credit unions should care about medical debt.

One more fun fact, he’s a proud owner of more sweaters than Mr. Rogers, and he’s the author of a brand new book called Banking on a Human Scale. George, I believe this is actually your third time on our podcast, which may be a record. Welcome, and thank you so much for joining us.

George:
Great to be here. Thanks for having me.

Kerala:
Let’s just start with this book, the Banking on a Human Scale. I’m just curious, why did you write it? Who’s the intended audience and what do you hope people will take away from it?

George:
Yeah, so I wrote it mostly because during my time at Filene, which was almost 16 years, a big part of my job was taking other people’s writing and turning it into something that was consumable, mostly academics. And I always had ideas in my mind and never had the time to do it. So when I left Filene in late 2020, I had a period of time where I wasn’t really doing anything productive, so just thought that I would take that time to just write the ideas down that I had. I always had them in a running outline and decided to turn it into a book. And it took a while to actually get it into the book, not because I wasn’t done with it, but just because I just never got around to publishing it.

And in terms of who was intended for it, I self-published on Amazon and I put it at the lowest price possible, so I just want people to read it. The idea was just to get some ideas and thoughts out there and see if people were interested or reacted to it. It’s probably mostly meant for people that are in financial services, but my mom read it and she said it was terrific. And then what I hope people to take away from it is just a slightly off center look and approach at how you can make financial services more human.

Kerala:
Well, I’m glad you got the mom endorsement. That’s always important.

George:
I would be in trouble if she said it was awful.

Kerala:
Exactly. I love how you talked in the book about how the best relationships are a combination of empathy, of reciprocity and small gestures. I certainly think that applies in the personal realm as well as the business realm. And I’m just curious, how do you think credit unions do on these three dimensions when it comes to interacting with their members?

George:
Yeah, I came up with this insight on my many walks with my dog who I talk to, but she doesn’t talk back to me. And it just came to me one day of who do I have the best relationships with in the business world, in my personal life, in my hobby world? And it all boiled down to these three things. And then I did try to apply it to credit unions. And I think credit unions do okay on the empathy. Compared to other financial institutions, we’re very empathetic people as an industry gaining an understanding of people’s needs. But the fact that we haven’t necessarily moved the needle as an industry on people that are unbanked or underbanked or financially well leads me to that we may have good empathy but not taking a tremendous amount of action.

Reciprocity is totally built into the whole credit union organizational structure. As a cooperative, you can’t help but be reciprocal in nature. My deposit turns into your loan. Don’t know if we do a great job of explaining that. And then on the small gesture side, I think that this is something that kind of sounds hokey, but think about the last time that you were invited to a place and you left … Someone just gave something to you of just a very small value. It’s a very memorable thing. And I think credit unions, once again, it’s a small gesture, can go a really long way. And one of the examples I bring forth in the book is probably one of the biggest financial relationships that most people have is purchasing a house. And we go through this whole complicated, convoluted process of getting the house we want, getting the mortgage, signing all of the paperwork, and then the next thing we hear from the credit union is, “Hey, your bill’s due. And oh, by the way, your bill’s due for the next 30 years.”

So something as small and silly as maybe just sending someone a pizza the day that they move in, that’s a small gesture, but it kind of sticks in people’s minds and it’s kind of a human way of thinking about the relationship.

Kerala:
I love that. I still remember when our realtor sent us a little spaghetti kit right after we moved in. And the fact that I remember that from 10 years ago shows that a little bit can go a long way.

George:
Yeah.

Cameron:
George, love the book and as a fellow research nerd who’s also deeply interested in how do we take really high quality research and make it actionable for organizations, you use this phrase I really liked called researching appropriately. And referenced all your experience at Filene or Filene, whoever you talk to. And I was just curious, can you break that down what that means for the average credit union? To research appropriately and bring it into their organization?

George:
Yeah. What I’ve observed is that the organizations sit on both ends of the continuum. There are organizations that don’t do any research and just make decisions from the gut. And hey, there’s always a time and a place for that. And then there’s organizations that sit on the other side of the continuum that really value what we used to call poundage. It’s just like bam, you throw the research down on the table, it makes a hefty noise, but you don’t necessarily use that all. I think that there’s a really happy medium in the middle, and it doesn’t have to be from the gut or super sophisticated research. There’s really simple ways that credit unions can think about researching appropriately. And it all starts with something that we all learned in the second grade, which is the scientific method. It’s a process and a method that can be utilized for so many different things, and you don’t need fancy technology to do this for a lot of the problems that I see in the credit union world can be solved with these really simplistic approaches to research.

And if you get the approximately correct answer from that research, then maybe it means you need to research a little bit more, appropriately. I think the point is not to get overwhelmed with being so focused on conducting research and trying to come up with a precisely wrong answer, and then at the other end of the continuum, really not doing any research at all and just saying, “I think that this is right and we’re going to spend lots of money and resources to put this into place,” and then find out a couple years later that it wasn’t researched at all.

Cameron:
And one of the things I really resonated with was … God, like a decade ago I and PixelSpoke worked on this audacious, wonderful strategy that totally failed, but at the heart of it was researching small and mid-size businesses and being the Jim Collins good to great for this audience. We got all these data points and it was kind of fascinating firsthand to see that actually we just got past a certain sample size and there was no new information. And I just thought if 300 entrepreneurs on the survey are good, then 3,000 would be way better and 30,000 would be the gold standard. And that’s like academic level research. You talked about I think the magic number of 25, and I’d love if you could expand on that and how to apply that in an organization.

George:
Yeah. This is more on the qualitative side of things. There’s a term in research called saturation, and it’s at the point where you talk to one more person and whatever the topic is from a qualitative perspective, you basically get from an incremental perspective, no new ideas. And saturation tends to occur in speaking with 20 to 25 people. Not that should be the answer to all research, but for that type of research, if you do talk to that magic number of between 20 and 25 people, generally speaking, you’re going to get 90 to 95% of the insights that you’re looking for, whatever the research is.

Thanks for bringing that up. That’s another really good example of researching appropriately. And it’s just like, well, pretty much any organization can kind of take that approach and think through, “Well, we can talk to 20 people around whatever topic that we are.” And I hope that that approach really demystifies this notion of research. It is+ an intimidating thing. Most of the people that I’ve come into contact with have PhDs. I don’t have PhD, but when you really boil it down, there’s some really interesting ways to research appropriately.

Cameron:
And I think so powerful because you got five people sitting around a table and it’s like, “Well, we each go talk to four people, we’re going to have really meaningful information.” It’s sort of the user experience realm. There’s research that says if you just run three to five user tests on your website, you’ll get 70% of all the issues. And so just getting beyond as you said that, “Hey, I need millions of data points or I’m just going to do it all on gut,” I think is such a powerful thing to bring into all of our organizations.

So shifting gears a bit, I read the book really closely, I’ve got a bunch of notes, and just to show you how closely I read it … The line was you said that innovation is your favorite word, which I thought was great. And I was wondering if you could explain how you think credit I should approach innovation. And I really like the six hats approach, especially.

George:
Yeah, the six hats comes from a guy named Edward de Bono, who’s a pretty famous author and thinker within the world of innovation and pretty much all aspects of business. But thinking about how credit union should approach innovation, once again, I think innovation, like research, is a word that has been fetishized within the business world, and if you were to ask someone a definition of it, they don’t really have a good one. I feel like I’ve developed a good one over the years and it’s solving older, new problems in new and novel ways. That’s it. Just new or old problems in new and novel ways.

And in my mind, the best innovations, especially in financial services, are the really boring ones that people will kind of shrug their shoulders and be like, “Hmm, that sounds like a good idea. Maybe I’ll try that.” Now in terms of how you actually do it, one of the things I do talk about is Edward de Bono’s work around this concept of the six hats as it relates to innovation. We tend to think innovation is a solitary person’s type of insights, and in a great eureka moment, they’ve come up with the next big idea for their organization to transform digitally or to come up with new products and services. And actually, it’s a really collaborative process.

So what de Bono talks about in this, one of his most famous books, The Six Thinking Hats, is some of the most effective ways to come up with new and novel ways of solving older new ideas is having a variety of a diverse group of people around the table. He talks about it more from a behavioral perspective, so I won’t go through all what all of the hats are, but basically you want people there … Calls them the white hats, which are just facts and information. You want people that are what he calls the yellow hats, which are incessantly positive about the ideas. You want people that are red hats that are feeling and emotions. And then of course you want the green hats as well that are all filled with new ideas.

And you can probably think within your organization of who fulfills those roles. You also want someone that is more negative than not to ensure that you’re not just talking about daisies and rainbows all the time, especially in a highly regulated industry like we are. But the point is just get a diversity of behavioral view points around the table in the innovation process.

Cameron:
Great. And I mean I did read your book, you didn’t rise to the bait. You actually kind of like you’re an old man in the park ranting at the pigeons. You said innovation is kind of a word that’s like … Yeah… Can you just say you think it’s just a little vapid or overused? Is that right?

George:
Yeah, I do. It’s business lingo now. I think next time someone says the word innovation, challenge them by asking them, “What’s your definition of innovation?” Because most business lingo, I think it’s just overused and not very effective to driving an organization forward. But if you just kind of boil it down to what it’s trying to do, I think it can be effective within organizations.

Cameron:
Yeah, awesome. One of the things I liked about your book is your inimitable style of humor came through. I was sort of constantly flipping to the end notes and laughing where you really sort of let down your hair. But you had the whole section on contrarian management. I’d never heard of this kind of … Yeah. Good, you’re letting down your hair. They can’t see your video, but George is really letting his hair loose now. That there’s these three kinds of organizational pain. You’ve got these pains in the ass, pains in the head and pains in the neck, which I thought was just such a cool way to think about maybe honestly about some of the challenges of an organization. So yeah, can you just share a little about all those concepts and really simplifying the idea of management for maybe all the complexity and noise that’s out there?

George:
Yeah, well I acknowledge in the book and sitting down and writing a book, you think through all of your experiences as a manager and mine go all the way back to high school when I was like a soccer coach or counselor at a summer camp and probably how poorly I managed the younger high schoolers and all the way up until the present time. Just all the foibles of my experience as a manager and just kind of thinking through … Well, I tried to apply the concepts that the business books tell you to do. And what I’ve found over the years is sometimes there’s some contrarian ways of managing. And I won’t go into the specific details of that because I think they’re kind of boring and more idiosyncratic to my experiences, but I like the idea of just being contrarian around managing things and people.

But as it relates to just the diagnosis of the pain in the, pain in the head and pain in the neck, those are things that organizations face all the time. The pain in the is just like, “Oh my gosh, this is a problem that just came out of either nowhere or has been festering for a long time and this is just holding the organization back. We need to deal with it.” In my mind, those are kind of the hard ones to deal with. The pain in the head are the ones that can really, I think, be solved through innovation, like we talked about earlier, or research. Those are the really deep problems where you’re like, “There’s really no good answer for that.” So being contrarian sometimes can help you solve through those things.

And then the pain in the neck are those really sharp things that just come out of nowhere that surprise you. I would maybe call those the black swan types of events where there’s really no playbook for these types of things. When we were all going through the financial crisis in 2008, as an industry we hadn’t really imagined what that might look like and those are really a pain in the neck. And I don’t think any of the models of management really work in those types of situations which we experience either every day or on a more periodic basis.

Cameron:
Cool. I love you had another framework of brag, worry, wonder, bet, which I grabbed that book. But I like the refocusing on as a manager, how am I getting in the way of the people I’m … real food, shelter, water. What are those simple barriers that I could move before getting to the more elevated, complicated stuff? So last, before I let Kerala ask some more questions, I had one other section I was really taken by, which I think is a big part of your expertise is just the area of strategy or strategory …

George:
Strategory.

Cameron:
… As you called it.

George:
Yes.

Cameron:
And love that you talked about how an effective strategy requires a love-hate mindset. I had heard you use this example a few times before of the Co-Operative Bank in the UK, and so I was wondering if you could lean into a bit more of the case study and then the theory of what’s the marketing and strategy of the Co-Operative Bank and how does it work and how does that relate to credit unions surviving or thriving and kind of their overall strategic approach?

George:
Yeah. Well, credit unions find themselves in a difficult situation. We’re smaller, less resources to market ourselves, to use technology, all of those types of things. So we got to find a differentiating factor. Some credit unions are just blessed by being in a really high growth economic area and as the tide rises, everyone else rises as long as you’re really good. But going forward, I think that there’s going to be a reckoning point. I don’t know when it is but there’s going to be an inflection point in the industry where in order to survive, you’re going to have to true differentiating factor.

And one of the things that I learned from the case study of the Co-Operative Bank is what they did in the late eighties, early nineties. Similar type of competitive situation, not quite a one-to-one, what we’re experiencing here in North America, but they were going to be faced with deregulation, lots of new competitors, much bigger. So they had to figure out how to differentiate themselves. Short story or make a long story short is that they decided to ask their members really researching appropriately of the cooperative, what makes us different? They said, “You’re more ethical than the other financial institutions.” They said, “That’s weird. We never really marketed that or communicated that.”

And they were the first organization in the banking world to create an “ethical policy,” which basically said, “Here are the things that our customers said that we should not lend to.” And they were kind of obvious things today. It’s like companies that pollute the environment, companies that make armaments or supply military or oppressive regimes or test on animals. And they made a big deal about the fact that, “Hey, we turn away billions or millions of pounds of business, sterling pounds of business every year.” And they did it. They communicated that not by thing, “Hey, we have got an ethical policy here.” They communicated that in a really stark way through some very effective marketing that was very much in your face that would create a love/hate type of paradox.

The people that loved it absolutely loved it, and the people that were turned off by it were absolutely turned off by it. So I’m not advocating for organizations to repeat that specific situation, but I think it offers an interesting parable around the concept of differentiation, that using an extreme example like that, that your organization can have a similar type of thing. And don’t be afraid to turn off some people with your strategy because that’s going to weed out the people that are not a good fit for you anyway. But the people that it attracts, they’re really going to love you and they’re going to be even more loyal to you.

I think Co-Operative Banks are really good example. It’s an older example. It didn’t necessarily age well because they went through a variety of cycles where they made some poor decisions and other circumstances. But I think it’s a really stark example of just going the edge reality of how a financial institution differentiate themselves. Then pulling back to saying, “Okay, what does that mean for specific credit unions?”

Cameron:
You actually used the phrase I love from Mark Meyer, the longtime CEO of Filene, of “Run to the other side of the room and then take a breath and step back, but go to the edge and then step back.” Can you just share a couple of those advertisements? Because they really are like, “Whoa, that’s a polarizing … That’s an advertisement that breaks through the noise.”

George:
Yeah, we can. I don’t know if you guys do show notes or anything like that, but we can show notes if you do. It is kind of a close up picture of a landmine. And the landmine, as the British narrator goes on to explain, costs a very minimal amount to produce. And they then mentioned that the fact that some of the big national banks in England at that time were actually financing the companies that would manufacture these landmines. And then they would go on to explain in very graphic detail what landmines do to people. And then they ended the advertisement by saying, “Co-Operative Bank never has and never will finance the production of armaments to a pressured regimes around the world.”

So that turns people on. And for other people they’re like, “Oh, I don’t … That makes me uncomfortable.”
But the point is that there’s no middle ground on that. You can’t help but pay attention. It’s like, “Why is a bank talking about this?” And it gets you thinking. It’s like, “Where’s my money? Do I want my money to go to that? Do I know that my bank or credit union doesn’t do that?” So that’s just the example that I brought forth. And I was really fortunate because prior to Filene, I worked at CUES, the Credit Union Executive Society, and I met the guy who was the head of public affairs at Co-Operative Bank in London. We had a program at London School of Economics. He shared these stories with me one-on-one, and it was pretty memorable.

Kerala:
I just think it’s so important for credit unions to be thinking about these things even if they wouldn’t launch a similar campaign. It’s just an industry that really struggles with differentiation. I was also just been nodding throughout this interview, even though the audience can’t see me. So I think we see eye-to-eye on a lot of these issues when it comes to business. And I wanted to talk about …

George:
I wanted to argue. I wanted to argue with you.

Kerala:
Sorry, I think we’re in agreement on most cases. But I wanted to talk about just the need to operate at a human scale, which you mentioned in your book, and how the worship of growth and the supposed efficiencies that come with it are a bit misleading. This is definitely a topic I feel passionate about. And you mentioned this magic number, $300 million in assets for credit unions. So I would just love for you to explain why is that a magic number and what does it mean for a credit union that’s smaller than this or bigger than this?

George:
It was a study that I found that kind of showed the vast majority of the economies of scale aggregate to organizations that reached the $300 million category. That’s always a moving target. And another study, or actually independent analysis, that I did showed that from an operating expense ratio perspective, we haven’t much changed as an industry even with all of this technology in terms of our ability to become more efficient as an organization. So I think growth is very important for organizations, especially cooperatively owned organizations, because if you don’t grow, that means you’re standing still, which means you’re not meeting the needs of consumer, you’re members, you’re owners.

But I think where we fall down as an industry is just growth for growth’s sake. It sounds like a cliche, but the desire to grow to a specific asset size as a main organizational goal without understanding the context, I think is what I was getting at. I do have credit unions that I work with that have very ambitious goals to grow to a certain asset size, but in service of something else. So if an organization’s like, “Hey, in a few years, five years, we want to be a $10 billion organization not because we want to be a $10 billion organization, but it means that we’re able to serve X thousands of members and we’re able to save them this amount of money.” That I think is a more nuanced view of growth, but growth for growth’s sake and being undifferentiated, I think, is the one thing that’s going to cause more and more organizations to cease to exist.

Kerala:
Yeah. Going to some credit union conferences definitely see a lot of people introducing themselves by their credit union’s asset size. And as you say, growth is important. We shouldn’t overlook that, but it’s important to have an understanding of why the asset size is important and what it will enable an organization to do.

George:
Yeah, it reminds me of one of my favorite quotes from a movie was Caddy Shack, the character played by Chevy Chase. He’s a very good golfer, and he goes into this fancy country club and Ted Knight, who’s like the person at the country club who everyone fears, he asks them what he shot on the golf course, I’m not a golfer. And Chevy Chase and his character says, “Well, I don’t keep score.” And Ted Knight will says, “Well, how do you measure yourself against other golfers?” And Chevy Chase says, “By height.” So I think we should measure ourselves by height in the credit union industry rather than asset size.

Kerala:
I’ll try that at my next conference. I’ll see how it goes over. I wanted to switch gears a little bit and talk about environmental, social and governance or what’s more commonly known as ESG. I have to admit, even as someone in the impact space, I had not really heard of ESG until recently. It seems like in recent months it’s become a much more well known and polarizing issue. And when it comes to ESG, you say credit unions are kind of in the middle of the pack and you actually suggest a credit union tithe as a possible solution. So I was wondering if you could just explain your perspective on this a bit?

George:
Yeah. Before I left Filene, we did a research study just looking at the idea of corporate giving. So how much money does the credit union industry collectively give for charitable purposes, which we viewed as a proxy for ESG. And I know those are two completely different things, but just trying to get an understanding of that. And first thing we found out is it’s not easy to find that information. So we hired some students from the University of Wisconsin to actually pull 990 forms from credit unions that have foundations as another proxy. And what we came up with as an estimate that from a percentage of profit perspective, credit unions were about on par with the corporate world in terms of giving.

And I know that the credit union tax exemption is a really touchy third rail type of issue from a public policy perspective. But the thing that I’ve always thought of is, okay, we have as an industry a tax exemption which we have to somehow illustrate and prove that we’re different. So from a giving perspective, actually we’re a few basis points higher than the average corporation on giving. So, yippee. Hooray.

We also have a nice benefit on pricing, generally speaking, although that’s hard to quantify as well. I think QNA estimates that at several billion dollars a year. But once again, that’s hard to estimate because it’s like, well, there’s a lot of people that don’t have access to credit or they have thin files and maybe we don’t even serve them, so we’re not even counting them. So using an approach of, well, what’s something that might work for the industry and how can we empirically prove that it’s not going to hurt the industry, it’s going to help the industry?

One of my former coworkers at Filene was from the Latter Day Saints Mormon persuasion. He talked about the tithe, which is like a 10% tithe on income. I said, “Well, what would happen to credit unions if they allocated 10% of their budgeted or actual net income to support social environmental/governance issues? Basically, corporate social responsibility issues?” And the answer is really straightforward from a math perspective. It’s like, well, your capital’s going to drop by that amount, and that’s assuming that none of that giving or that strategic philanthropy or social responsibility efforts doesn’t turn into something positive for the credit union.

So it’s very much a think tank-y type of concept or perspective. But I thought it was an easy and interesting way to get people talking about this notion of, well, how are we using the benefits that we have from a public policy perspective in a real way? Also, talk about the legacy and the history of our industry. And I think our founders would probably look upon that and say, “Hmm, that’s not a bad idea. Needs more homework, but kind of interesting idea.”

Cameron:
Sounds like a opportunity for movement building. The thing that just dawned on me when you’re talking about this, George, is when we converted to being a worker co-op in January, 2020, we actually built that into our bylaws that a minimum of 10% must be given away. So I guess we’re kind of doing that already. And like you say, there’s a bit of a leap of faith. We had done that for years before the conversion. That is it going to somehow work out? Is it just squandering resources from a cold-hearted financial standpoint? But I think we’ve always just believed that it’s going to come back to us in some way. And even if it doesn’t, I’d rather be pursuing that strategy than something else.

George:
Yeah, you factor into the equation. I don’t want to put people to sleep by talking about capital ratios, but as an industry, we’re generally speaking over … From a regulatory minimum perspective, which I know you don’t want to have, but we’re over-capitalized as an industry. So would you rather have a small portion of that money go to work in the community, or would you just rather have it sit out on your balance sheet and then if you can’t lend it out, you’re just going to buy US treasuries?

Cameron:
Right.

George:
I know what I would want to do.

Cameron:
Yeah. I love that concept. Well, I think we’d be remiss before we move towards wrapping up, I realize we got to talk a little bit about Hofheimer Strategy Advisors, your, I think, day gig. And then you’re launching a new initiative. It’s Strategy.Co-Op, right? Did I get that correct?

George:
Yeah, it’s called the Strategy Cooperative. Yep.

Cameron:
Yep.

George:
Yep. Yeah. The Hofheimer Strategy Advisors is just my consulting business. I work with about 40 credit union clients or credit union-adjacent meaning like CUSOs or associations on a variety of big sticky, smelly strategic issues or fun strategic issues, as it were, across the United States. So that’s been really fun, and I think since the last time I talked to you guys on this podcast, that’s really taken off and doing well.

And then my former colleague from Filene and I, Brent Dixon, were in the process of starting this thing called The Strategy Co-Op, which is trying to take the same work that I’m doing with my consulting firm and turn it into more of a technology-enabled process that makes it less analog. Like the whole concept of strategy advising less analog than it is today. So if you think about the world that’s consulting, a lot of it is still stuck in a lot of the practices from the 1980s or 1990s, and we think we have some ideas about how to make that more effective, more inclusive to more people by using technology. And we’re actually most likely going to be turning it into a CUSO, Credit Union Service Organization. I think we’re about to get some investment dollars from a handful of credit unions to start this Strategy Cooperative, which we hope to turn into a subscription-based type of service for credit unions of all sizes and shapes to get really good advice around their big challenge, hairy challenging issues.

Cameron:
Super cool. All right. Well, Hofheimer Strategy Advisors, Hofheimer.org and Strategy.Co-op. Brent is another super sharp guy, so really looking forward to see what you guys come up with. All right. Let’s do some rapid fire questions. I know you’ve long been an aficionado of sweaters, though I’m disappointed you’re not wearing one right now.

George:
I’ve got one in my bag over there.

Cameron:
Okay.

George:
Sorry.

Cameron:
So I just wanted to know, V-neck … I’m wearing a round-neck. V-neck or round-neck? What is your …

George:
Round-neck. Round-neck.

Cameron:
Round-neck.

George:
Yeah. Yeah.

Cameron:
No question. Okay. You’ve just seen so much of the credit union space. What do you think, with so many worthy causes, what’s the most underappreciated or undervalued cause?

George:
There are so many stories in credit unions. Sorry, this isn’t rapid fire, so I’m going to go a little bit longer.

Cameron:
You need time. That’s fine.

George:
I’ll do the shortcut. I think a really good example of it is Chartway Promise Foundation, which is affiliated with Chartway Credit Union, Virginia. For their strategy and their geographies that they serve, they’ve decided to help sick kids in need. And it’s not just the psychological side of things. I mean, there’s a deep financial component to that, and the work that they do is pretty impressive. And I think it’s just an example of understanding the needs of your community and being able to focus on one thing and focus on it really, really well. And I would just push them as one of the really good examples of that.

Cameron:
Awesome. That was still rapid fire. All right, last question is … Last rapid fire question. You’ve done this cross-country bike trip thing, which blows my mind. So you don’t get to bring very much, but what’s the number one thing if you’re on your bicycle in the middle of West Texas that you want to have?

George:
Yeah. Well another human being is always helpful.

Cameron:
Sure.

George:
Yeah. When you go on these longer epic trips, whether it’s bicycle or sailing or hiking, they talk about this concept of bringing one comfort item because you have to be very particular about things. And my comfort item on the last trip was a transistor radio.

Kerala:
Wow.

George:
Like old school transistor radio, and just being able to blare out whatever signals that I could get in West Texas or wherever the heck I was and just listen to stuff. But if you’re really talking about the comfort thing, it’s the stuff that you put on all over your body so you don’t get rashes too. That’s kind of the obvious one.

Cameron:
Yeah. All right, I’m going to not dig into that topic. Let’s do our final take. I’d love to just know, is there anything you didn’t get to or anything else you’d really like to reiterate for our audience?

George:
No, I appreciate the opportunity to talk about this. Writing a book was really fun and interesting, and I don’t want to leave people thinking that the thesis of the book is in the world of all this technology and scale, we have to get bigger and we have to use technology for everything. I’m not a Luddite as it relates to that. I just think we need to come up with a nuanced view. And I think that that nuanced view can really be helpful for credit unions going forward, which is my passion and focus in my professional life. So really appreciate the opportunity.

Cameron:
Awesome. Well, it’s a great book. It’s a short book. Go pick it up. And thanks for joining us, George.

George:
Yeah, thank you guys. Appreciate it.

Kerala:
Thanks, George.

Cameron:
All right, folks, thanks for joining us for another really interesting episode. Always love chatting with George and hearing his latest thinking. I’d love to do my key takeaways. The first was just this framework of empathy, reciprocity, and small gestures being the foundation of strong relationships. And that George’s perspective, with so many years in the credit union space, is that credit union are pretty good at empathy and reciprocity, but there’s this real opportunity to focus on the small gestures to strengthen their relationships. One cool example was a local real estate company here in Portland, the largest one in Portland, really innovative entrepreneur. And she talked about a program they have where new homeowners who buy a home through them, they actually send them a simple guide to set up a block party and a prefilled form to the city for the permit. So it just got me thinking, what can your credit union do in that area?

My next takeaway was that George’s comment that many credit unions, I would say all organizations in my experience, can get stuck in either making decisions solely from their guts or demanding endless research before they take action. I think that concept of appropriate research was so powerful, and I love that notion that when it comes to qualitative research just ask 20 to 25 members and you’ll get 90% of the way there if you have something you want to explore.
I was joking a bit, George, talking about how innovation is really an overused word, but I loved his definition that the true innovation is about solving old and new problems in new and novel ways. And the reminder that often the best problems, the best innovation is around the old problems you’re working on. I also thought it was a really interesting framing. I like the six hats model, that innovation is really a cooperative effort, not a solitary one. And that’s kind of a paradigm that we can often get caught in. But really focusing on the cooperative aspect, how powerful that is.

I also really liked the Co-Operative Bank example. It’s a little bit out there, but I loved how as George talked from his perspective, that really differentiating the notion that the root of differentiation is being different and that is a little uncomfortable or a lot, and that’s going to take a willingness to create that love/hate reaction to your positioning.

And then lastly, I just really think this whole idea of a credit union tithing project is really interesting. It’s something we did commit to at PixelSpoke years ago, and it’s just a really compelling thought experiment to me. What would happen if all credit unions committed to donating 10% of their operating income to charity?
And lastly, be sure to check out George’s book Banking on a Human Scale. You can find it on Amazon and there’s lots more of interesting, entertaining, and really insightful perspectives in that book.
All right, thank you for joining us today for another great episode. Until the next time, I wish you all the best of luck in making your credit union remarkable.