This article was first published on ChipFilson.com.
Recently, I asked the former, now retired CEO of CU*Answers, Randy Karnes, to explain his observation that every organization is only one or two CEO transitions from failure. He did not necessarily mean financial failure, although that can happen. Rather, it is the loss of founding purpose coupled with the desire of new CEO’s to make their mark.
Cooperatives and their support organizations are especially vulnerable due to their passive, virtual democratic ownership model.
He compares this loss of identity to how some music lasts for generations, even centuries. These works are performed time and again in different eras, whereas other compositions or songs, while popular, are long gone and forgotten. Risk from leadership turnover is high because each change can lead to a loss of past harmonies that brought everyone together.
Randy’s song
“When the distinctive song that unites the hearts of a cooperative community’s stakeholders is no longer heard, the mission cannot be sustained.”
That image—a shared song—captures something essential about credit unions. At their founding, every cooperative has a set of beliefs, commitments, and lived experiences that bind members, volunteers, and staff in a common purpose. It is not written down in a strategic plan. It is carried in memory, reinforced in stories, and expressed in everyday decisions.
But here is the risk: most credit unions are only one or two CEO transitions away from losing that song entirely.
New leadership often arrives with energy, ambition, and a forward-looking mandate. That is necessary. But too often, the past is treated as irrelevant—something to be modernized, replaced, or quietly set aside. The assumption is that the future is theirs alone to define.
When that happens, the cooperative’s legacy—its relationship competitive advantage—begins to disappear.
Melodies that remind
A useful parallel comes from music. Why do some works endure for generations—classical compositions, religious hymns, even certain popular songs—while others fade almost as quickly as they appear? There is no generational transfer because there is no institutional memory.
The difference is not merely quality or changing musical tastes. It is resonance. The music that lasts carries meaning across time. It is repeated, shared, adapted, and remembered because it speaks to something deeper than the moment in which it was created.
Credit unions are no different. Their founding “songs” endure only if they are remembered, retold, and made relevant for each new generation.
Without that continuity, erosion begins.
Members’ memories and loyalty fade. Their connection to the original purpose weakens as daily life, changing expectations, and competitive alternatives crowd in. The member’s song and the credit union’s song drift out of harmony.
Board volunteers lose the founders’ passion. Pressed by governance demands and operational complexity, they can shift from stewards of a mission to overseers of a business. The language of purpose gives way to the language of performance. The song becomes more professional—and less meaningful.
Management and staff follow the new CEO’s cues. Career ambitions push them toward conformity. Success is redefined in terms of growth, scale, and financial metrics. Gradually, a new song replaces the old—one that sounds increasingly like every other financial institution in the market.
And when that happens, the cooperative has not failed. It has simply become indistinguishable.
The challenge is not nostalgia. It is stewardship.
Living the legacy
If credit unions want to sustain their independence and distinctiveness, they must actively renew their institutional memory. This is more than archiving documents or celebrating anniversaries. It requires intentional processes to capture the stories, values, personalities, and decisions that defined the organization and industry—and to embed them in leadership development, succession planning, and strategic priorities.
Many cooperatives struggle with strategic myopia. Both inside and out of the industry, the world sees credit unions as a tactical model for banking. From the beginning, credit unions were a community’s way to embed the customer-owner’s passion, heart, and needs in a shared solution. The cooperative song’s evolution is at the core of credit union resilience.
The truth is simple: institutions that forget their song eventually stop singing it. And those who stop singing it lose the very reason they were created in the first place.
