July 20, 2017. Periodically NACUSO (National Association of CUSOs) been highlighting the stories of our members in an informal interview setting. This month we are excited to tell the story of their newest members, rkGoBig.
rkGoBig is a CUSO started by six credit unions in the eastern US, covering Pennsylvania, Maryland and Washington D.C. Based on the work of Mid-Atlantic Corporate FCU’s (now Vizo Financial) Rekindle Initiative, the foundation of the business is to help save the small credit unions and, eventually, add our work to the organizations already working on networked cooperatives. The CUSO is, in large part, an effort to regain the hope that many of our small credit unions have struggled to keep. rkGOBIG is committed to saving credit union charters, some of which were created in the depths of the Depression and have weathered decades of change.
The following is an interview in July 2017 by NACUSO of Peter Barnard, current CEO of rkGoBig.
PART ONE: Life Story and Experiences
What’s your current position and can you give me a brief overview of what it is you do in your work?
One important caveat – this is not about me – this is telling the story of how a group of us worked together to form rkGoBig, but thanks for the opportunity to tell this story.
I’m the CEO of rkGoBig. I oversee rkGoBig, and my day to day work involves operations of the CUSO. We have 11 people on staff and they are divided into 3 ½ departments. That’s directly inside the CUSO work.
However, big chunks of my day are spent in other bodies of the organization – we call them Councils. We have our CEO Council – think BOD but not a lot of governance questions. This is where we do our vision and long-term planning, as well as mid-range tactical management and some execution work. The CEO Council meets every other week and a full day and half day a month.
The second Council is our Operations Council. This is typically composed of, but not always, the “number two” in the credit union. They know how everything works, the “ground truth” of the organization. This is a pretty serious group that make the hundreds of decisions connecting the CUSO to the CUs. We get together every week via video conference. Part of my role again is herding ideas and staying on point. This is my best imitation of a consultant role and I participate in the decision-making process less and less as we all mature. The Operations Council is the glue that holds it all together. They do the day to day work that brings the credit unions together in ways that are effective.
Third is the youngest – the Data Strike Force. This body is made up of five of us that get together every two weeks. One of our CEO Council, Jim McCaw, and I keep that group moving. They are helping the network build the knowledgebase, skill set and know how so we can extract value from all that data we have.
We have six credit unions that are part of this CUSO. We did a tremendous amount of work building trust. We believe that “Trust is truth over time.” We found ways to make sure we were pushing ourselves together and talking a great deal about headlamps. We coined this phrase to represent our shared vision and to use those headlamps to metaphorically “light the way” in our journey. In the beginning, we clearly defined the guiding principles of how we are going to work together. We have functionally communicating teams. If we hit a disagreement, we are all committed to staying there until we work it out. We’ve learned that we have to listen actively to our compatriots. I have found that it is easy to allow people who naturally emerge as the oxygen takers in the room – and I’m one of them – to derail the process of DNA-level trust. We set these headlamps early on to guide us and it’s how we built the communication mechanisms.
We also have 12 statements that begin with “We believe …” that we use as filters to guide us through our decision-making process.
What would you say most motivates you to do what you do? What are you most excited or passionate about?
Right now? My passion is ensuring that small and local stays viable. That’s partly because of where I live. I see a $185 million fine paid by Wells Fargo and they can survive it, yet the credit union industry still only has a 6% market share, in many areas capital pools at smaller CUs are either static or growing only slowly - and that is not sufficient for what we hope. I am passionate about making sure this group of CEOs can stay viable. Many mergers make sense. I think that if there is one thing that we are working, it is to first give these six CUs an option to not merge, and second to perhaps help other CUs know their options too. We all get the phone calls from our larger brethren. All it takes is a dark day for one of we smaller shops to get started thinking that the merge-option sounds pretty good. The other CU can give their members more services, more branches, greater economies of scale for the members. Chip Filson has been doing some fine work in this area too. The short is that we believe that working together we will be relevant for years to come without merging. In a nutshell, that is us.
I want to hear the story of how you came to work with credit unions. What attracted you to work for rkGoBig?
I have had a couple of careers. My father was a founding lawyer at a law firm. He introduced me to his friend David Becker owner of a data processing company re:Member Data Services. David had recently started a home banking firm, VIFI. I was employee number three. I learned a lot from David and was with the company until it sold in 2002. I went from there to a large publicly traded company, BISYS Banking Services. Then to corporate credit unions. I started working with Empire Corporate FCU, out of New York, and then Mid Atlantic Corporate in Harrisburg. Always finding thoughtful people who wanted to work on things that I wanted to work on. We thought a lot about scale back then. How to bring scale to the CU eco-systems. Funny to me how these things cycle through our lives.
In 2003 Rekindle was formed by a core group of leading credit unions in Pennsylvania, interested in working together to solve problems. Following a founding meeting convened by Belco Community Credit Union in Harrisburg, PA. Mid-Atlantic Corporate Federal Credit Union assumed a leadership role in order to develop a scalable collaboration framework for the Middle-Atlantic states. Jay Murray, CEO of Mid-Atlantic, really helped us to get this going. I continue to believe that the corporate credit union model is a really interesting point of aggregation. The Rekindle Initiative is a great example of that.
Now if we can go even further back, where did you grow up and what was it like living there? Where did you go to school?
I grew up in Indianapolis Indiana and am a proud Hoosier. I left for a while to live out of the country – I lived in Paris and worked as a dishwasher in a restaurant. Then came back to the states and worked in Boston. Eventually we headed back to Indy to raise our kids. Ten years ago we came out here to Tamworth, NH, a small town near the border of Maine. If you’ve never been, you should check it out.
Who were your mentors along the way? People who deeply influenced who you are, what you believe in and what you’re committed to in your work and life? Tell me about them.
Several pop to mind. A friend recently reminded me that many of his mentors never even knew they were ‘mentoring’ him. I have learned a great deal from working with Jay Murray, CEO of Vizo Financial. I’d walk through hot coals for him. I haven’t known him for long, but Randy Karnes of CU*ANSWERS has both helped push my brain forward and my execution skills. Charlie White, former CTO of Empire Corporate and Chief Innovation Officer at Members United. Charlie took innovation seriously and a sense of humor and humility I carry parts of today. Another guy was Mike Winter who runs a CUSO for Digital CU. With Mike, I was a hotshot sales guy and he was a mentor for me early on – taught me how to understand the middle of the financials instead of the topline only. Another person that comes to mind that is not in the credit union space anymore was David Becker who owned re:Member Data. He put me in jobs I was not even remotely qualified for but had the confidence in me to get them done. He was a very important person to me. He really challenged me and gave me some of the confidence I have today.
Finally, can you share something interesting about you that would surprise our readers? It can be anything, a hobby, an adventure, sports, the most embarrassing thing that’s ever happened to you?
This is one that my publicist would say don’t answer – if I had one. Some folks think it’s interesting that I really enjoy working with a local chicken farmer. Together we are trying to improve the local economy. Karl Behr processes about 1500 chickens a year. My daughter’s a vegan because of the soft-belly eyes of a cow and the in-humanity of how meat is made here in the States. To my mind, I needed to get closer to the way my plate gets filled. Also, it is the most literate, thoughtful chicken eviscerating crew I have known!
PART TWO: The Business Story
Tell me the story of how your CUSO/Company was created - the early days. Tell me about some of the memorable characters in the history, some that brought your story color, drama, comedy, conflict?
Two things got this band rolling. First, Jay Murray in a hallway in Mid-Atlantic Corporate. We were trying to build a shared compliance function. We did everything we thought we knew to do - got everyone together to co-create and it flopped. We are standing in the hallway – and looked at each other. Jay said, “Well let’s go big or go home.” We were silly enough to take the cliché seriously. I wrote out a statement of work.
Among other folks, we just start taking it seriously and wondered what kind of people would move forward and be risk takers. We went to 9 or 10 credit unions that we thought would really respond to it. And there were only 3 that said no. Hand-to-hand and face-to-face. That is how we recruited. We have a thing called the BBQ test – it became more and more important to us as we went along. For us, it’s not just about intention or the IQ of the person or the resources. Do you enjoy their company? That’s how it got started. Six credit unions ponied up $25K each – and took a lot of risk. But they were committed to maximizing credit union resources and reducing operating expenditures through collaboration. These six leaders jumped at the opportunity to create scale while maintaining their independence.
Mike Atkins of OTS was really important to our operation in ways that I am sure he is not even aware. First of all he was very generous with his time and sharing the wisdom of their experiences. He gave us the belief that it was possible. Another important person to our story –Joan Moran, who is one of our owners. She sent off an email to Jay and me. All it said was “I want one of these! Only for smaller credit unions. OTS announcement attached.” She’s the CEO of the then 58 million dollar credit union in the Department of Labor. I go back to Mike about once or twice a year to ask things like “How did you handle governance?”
PART THREE: Reflections and Lessons
If you could start your CUSO/Company all over again, would you do anything differently? Why and what would you do?
Hmmmm….anything I would do differently? Nothing is really striking me right now. But you have to bear in mind that some of the things I consider to be mistakes, well we learned how to learn from them, so they were good mistakes to make. For example, the first thing we set out to do was the mapping out facilities, staff and systems. We mapped out thousands of data points, costs, headcount. Spent two months doing that. Today we consider it totally useless and we never went back to that data. BUT it was a great exercise and helped us to form our team. So it certainly wasn’t a waste of time. It was quite possibly the single most important thing we have done. It allowed us to work together. It gave us an excuse to become interdependent. To develop a shared vocabulary.
Our whole industry is collaboratively built. I have been caught saying that collaboration just doesn’t work today. But I think that is not right. Corporates have formed. Mortgage CUSOs have formed. Cloud CUSOs have formed. CU*ANSWERS is about to turn 50. The list is long. You add the cooperative spirit and business discipline and put that all together. The actual work to do it is just new and different to some. We “rekindled” that cooperative spirit for our group.
Finally, when you think of the future for credit unions, what gives you hope and what makes you concerned?
What makes me most concerned is the future for small credit unions. They are going to “age out” and merge. Chip Filson has been speaking much more eloquently on the topic. For example, there was this $150 million credit union in Carlisle, PA. Totally profitable. Old CEO retires, a new one is hired and within 3 months they merged with a larger credit union. There was no reason for that credit union to go away. Not really mine to have an opinion. But the “old CEO” was one of the first voices in Rekindle. Once the membership was more fully informed what was happening, there was an upheaval. I do support NCUA’s statements on more transparency for members during a merger process. They need to be informed what is actually happening and reminded they do have a vote.
My biggest hope for credit unions is this: that at the end of the next ten years, we would look back and see that cooperative banking is one of the biggest stories in all of financial services.
The Rekindle Initiative:
The Rekindle website was designed to enhance the collaboration framework. Created and owned by Vizo Financial, it represents the founding ideas of rkGoBig. Hosted by Ongoing Operations, a Maryland CUSO that offers cloud-computing, and data backup and recovery solutions, the site is used to build community, house the Rekindle video library, and keep credit unions that are still in the information-gathering stage updated on the progress of Rekindle developments. For more information about Rekindle, visit www.rekindlecu.org