Member Service Keeps Navy Federal Shipshape as Dawson Retires
Union
When Cutler Dawson began as president and CEO at Navy Federal Credit Union upon retiring as a vice admiral in the Navy in 2004, the credit union was the largest in the world at $22.5 billion in assets. Today, it remains the largest by a wide margin at $97 billion in assets. That growth came from one simple focus: member-centric service. Late Navy Federal Chairman Vincent Lascara was known for saying, “Navy Federal doesn’t grow for growth’s sake. It grows because of exceptional member service.”
When joining Navy Federal, Dawson, who retired from the credit union on Jan. 18, knew that he had a lot to learn about the credit union industry. “Skills and practices that I learned in the Navy, like leadership, transfer well anywhere, but I had a lot to learn about lending, savings and service in general,” Dawson explains. He adds, “It was the professional staff that inspired me and kept me here.”
Dawson recalls that one of the first changes he made at Navy Federal was to offer risk-based pricing. At the time, many credit unions still offered one loan rate for all members. Risk-based pricing categorizes members of various credit scores, allowing lenders to price loans according to the estimated risk and safely make loans to more members who may not have access to reasonably priced credit otherwise.
“That’s proven to be a very significant decision,” Dawson says. “Our lending portfolio grew from $10 billion when I joined to $72 billion today.”
The members have to be foremost in a credit union’s thoughts, Dawson says. “I think the biggest challenge has been that we have to continually look at what we do through the lens of our member, because if you’re not careful, you can stray toward what’s convenient or easiest for the credit union to do,” opening the door for large banks to swoop in. “But if we can view it from the eyes of the member, we’re going to beat them every time.
“Navy Federal developed a new tag line: ‘Our members are the mission.’ That helps ground us in a lot of different ways,” Dawson explains. Navy Federal is experiencing above-peer membership growth at 10.25 percent as of September 2018, according to data from the National Credit Union Administration.
The tactics Navy Federal used to add those members and keep them coming back included significantly reducing call center wait times, increasing the number of branches from 100 to 328, expanding to serve all branches of the armed services and veterans, and taking advantage of mobile banking early on.
“We knew a number of years ago mobile and digital offerings were going to be very important,” Dawson says, particularly with Navy Federal’s highly mobile member base. “We went about building apps, and we’ve been impressed with the takeup. It’s our No. 1 channel.”
In regard to employee engagement, Dawson says that for Navy Federal, “taking care of its employees is part of taking care of the members.” The credit union upped its 401(k) match to 7 percent for all employees and introduced the President’s Challenge, during which employees are rewarded for making healthy choices. Navy Federal also rotates employees to various departments so they obtain a wide swath of experiences and identify opportunities for professional development.
“We help leverage and grow careers,” Dawson says. “Our thinking at Navy Federal is, the more exposure we can give people to different parts of the credit union, the better off we’ll be.” The combination of all its efforts for employees has earned Navy Federal a spot on the list of Fortune 100 Best Companies to Work For eight times.
As Navy Federal enters into the next chapter of changes, Dawson considers Navy Federal’s laser focus on member service a hallmark of his career at the credit union. He says he’s certain he’s leaving the credit union in good hands with incoming President and CEO Mary McDuffie.
“Mary is terrific, and she is absolutely the right person to be my replacement,” Dawson says. “She’s got the background and strategic vision that looks forward.” McDuffie has served Navy Federal in various capacities, most recently as chief operating officer since June 2018.
As Dawson’s chapter at Navy Federal closes, he cherishes the lifelong connections he has made during his time as president and CEO. “As I leave, I’m very grateful to Chairman Vice Admiral (Ret.) John Lockard at Navy Federal,” Dawson says. “Here’s a man who’s dedicated his life to the credit union and served for 25 years as its chairman for no compensation. He’s led a credit union that’s very supportive of the members and the employees of Navy Federal. I’m also very proud of employees at Navy Federal and thankful for their kindness and support for the last 14 years. I’m very proud of them and proud to be part of their team.”
This article was published in the May-June 2019 edition of The NAFCU Journal magazine.
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