How Workers Credit Union Rebuilt Profitability With Culture And Governance

We share how Workers Credit Union rebuilds trust and profitability by running like a startup while tightening governance and bringing employees into the work. We break down how culture, AI policy, and disciplined asset liability management turn bold ideas into real execution for members. 
• adopting a startup operating style to move fast and fix fast 
• building a hybrid leadership culture with deep employee tenure 
• creating structured innovation with cross-functional ownership 
• improving profitability through balance sheet focus and ROE levers 
• setting board-approved AI governance and running intentional pilots 
• using AI to boost productivity and member service rather than cut jobs 
• strengthening HR as a culture and performance partner with employee NPS 
• WorkersPalooza as a full-day all-hands investment in culture 
• replacing ITMs with human service to differentiate the branch experience 
• upgrading tech stack with cloud phones plus mortgage and commercial LOS 
• expanding secondary market strategy through originate-to-sell and flow deals 
• grounding innovation in core ALM concepts like cost of funds and NIM 
Shoot me an email. Please, please reach out to me. 

Transcript

Mike Ensweiler (Intro - 00:10)

Welcome everyone to "In Your Best Interest," an ALM First podcast, a show that explores common depository challenges, giving you an insider's view of the latest market trends and shares stories and insights from industry leaders. I'm your host, Mike Ensweiler.

Credit unions today face the challenge of not just surviving but thriving in a rapidly changing financial landscape. From digital transformation and AI adoption to building cultures of innovation and improving financial performance, successful institutions must balance bold ideas with disciplined execution. For credit unions navigating turnarounds or seeking to reinvent themselves, this requires a fundamental shift in mindset—from maintaining the status quo to embracing a startup mentality.

Today, I'm joined by Chad Lewkowski, Chief Operating Officer, and Bob Leger, Chief Financial Officer, both from Workers Credit Union. They'll share their remarkable turnaround story and discuss how adopting a startup mindset has transformed their institution. We'll explore their innovative approach to governance, their thoughtful implementation of AI to enhance employee productivity, and practical strategies for building a culture where ideas turn into execution. From mobile branches and vibe coding to ditching ITMs and building secondary market capabilities, Chad and Bob will show us what's possible when you combine innovation with strong fundamentals.

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Mike Ensweiler 1:35

Chad and Bob, welcome to the show.

Chad Lewkowski 1:37

Thanks, Mike.

Mike Ensweiler 1:40

Thanks for being here. Before we get started, I'm really excited about the conversation we're about to have, but before we get started, just to kind of give our listeners a little insight about you know you two beyond the bio I read, give us a fun fact about yourselves. 

We'll start with you, Chad.

Chad Lewkowski 1:55

So an interesting fun fact about myself is I was never a credit union person prior to joining workers. Um I joined workers on a 90-day help, the new CEO out, and now I've been there for two and a half years, and I'm currently the COO. So, background not in credit unions, it was in banking for a good 14 years, and then previously spent 10 years building Fentalks. 

Mike Ensweiler 2:22

Temporary assignment has led to uh a little bit of a career here. 

Chad Lewkowski 2:26

Temporary assignment has led to a career. In fact, I think that's how Jay said it. He's like, “Do you want to make this a career?” He said this is kind of fun. That's great. Let's do it.

Mike Ensweiler 2:35

Awesome. How about you, Bob?

Bob Leger 2:37

I live in Maine, work in Massachusetts, and a dog guy with two cats and no dogs.

Mike Ensweiler 2:45

There's a story there that's probably best talked about over a beer. That's awesome. All right, well, let's dig right in. So I know both of you are relatively new to workers, and it’s no secret Workers was in some trouble a few years ago and is a great turnaround story. So, what's the biggest mindset shift that the new leadership has brought to workers?

Bob Leger 3:08

From my perspective- and it goes back to sort of a conversation that I had with Jay before I sort of embarked on the journey to assist- when Jay took the job in July of 2023, we met for coffee. And he's like, “I think we need to run it like a startup.” And I have most recently spent the last decade running startups. I said, “Well, I can help you with that.” He’s like, “Alright, why don't you join me as chief of staff for the next 90 days?” And then it ended up being through the end of ‘23. Then, I'm still there, and now I'm the COO. So it has continued into a career. But really, the basis that we can operate like a startup, which means obviously moving fast, breaking things, fixing things, and doing it in concert with the rest of the team, it has really been, I think, large foundation for us to build from to make this all possible.

Bob Leger 4:02

Yeah, and I would add to that that we had to have a mindset shift that if we kept doing things the same way, we would heal over time, but that would be a really long runway, and it's also not what the desire or the vision of the board was or what our CEO was. So we had to adapt different, not just business practices, but also evolve our culture and change our mindsets to one of innovation and forward-looking rather than just staying in place.

Chad Lewkowski 4:29

Yeah, actually, Bob brings up an interesting point that I think is definitely worth speaking of, and that is, our management team largely hails from Colorado. So Jay lives in Colorado, a few miles away from myself, who lives in Colorado, our Chief People Officer lives in Colorado, our performance excellence officer, which I'll get into a little bit later, also from Colorado, our deputy chief risk officers from Colorado, and a couple different strategy people too. Our VP of strategic initiatives is also from there. So it's unique that we've been able to create sort of this culture and change the culture, a new culture within workers doing it in a hybrid form. A lot of it has been- I've got a lot of air miles since I started.  I do spend a lot of time in the office, and that goes for all of those that are not based in Massachusetts. 

But we've been able to do it, and I think largely because we have shown the employees at Workers- which there is a lot of tenure at workers. Matter of fact, my head underwriter's celebrating her 50th year employed by Workers. While 50 is unique, we have a lot of people that are in the 30s. So it's hard to get them to change. And when I first came there to give you an idea of culture- it's best understood by- Jay introduced me. And I expected everybody, if you think of like the movie Office Space. TPS reports, red stables. What exactly do you hear? That's Jay's guy. Rather, on our Wednesday all-staff call, I ended up getting Teams messages that say, I understand that you fly across the country and you have two children. Thank you for helping save us. And that right there, I still have those messages in my Teams. That defines what our culture is and why it had turned from 90 days, 120 days to a career.  Jay and I'll often say this is, “a franchise worth or a name worth saving.” And workers were the fourth or fifth oldest credit union. It’s definitely a place worth saving. So that's why I'm here.

Bob Leger 6:43

Yeah, Jay sets the tone at the top for us as an innovative institution that while we do things, and I'm sure we'll talk about AI and its role in us advancing, it's also institutional for us to be innovative, and we've built it into a structured process for ideation, test and learn pilots, cross-functional ownership, and so that when we talk about innovation, it's not just something that we're waiting for a vendor to bring to us and to roll out in 90 days, but rather something that we work across the institution, and I think that's one of our biggest strengths is that we bring in people from different areas, different disciplines, and different experience, both into the finance area but into the lending area as well, because we can't have the same minds who have spent their entire career in the finance area coming up with innovative financial ideas. On our ALCO, we have people from IT, from HR, from Business Process Excellence- all different voices, and they're actually here too. So they're here at the conference learning, and I think that's really helpful for us to come up with new ideas.

Mike Ensweiler 7:50

So you hit on something, so you're trying all these new ideas. We talked a little bit about AI, you're in a- I don't want to say a workout situation- but certainly a performance improvement, financial improvement kind of situation. There's clearly an emphasis on improving profitability and in ROE and those kinds of things. So, what are the biggest levers you're pulling to improve that financial performance? And where have you seen maybe some of these early wins?

Bob Leger 8:19

Yeah, so ALM First has definitely been a big part of our success story from the beginning of 2024 forward. We started working with [them] at that time, and [they’ve] helped us to one, make sure that we have all the blocking and tackling in place, that our policies are structured properly, but also to look at those things that we can change and affect, and then those other areas that are just going to take time to heal. But the Federal Home Loan Bank of Boston, they've also been a wonderful partner of ours. But just continually looking at our balance sheet and our financial situation, understanding what we can change, what we can't change, and for those things that we even have a notion that we might be able to improve upon, having that cross-functional discussion about how we can move this.

Chad Lewkowski 9:04

I think everything obviously comes back to getting to profitability, and and you said workout, it's fair to say it's definitely been a workout situation. Workers was in a tough spot. We’ve been able to obviously resuscitate it, and I would say in a quick amount of time, it's been two and a half years, we've gone from you know the near-death experience to really being innovative. We’ve changed, the culture has changed, a culture that is inclusive of everybody. Everybody has a stakeholder, they're stakeholders to almost everything we do. We overly communicate a lot of things, which I think helps bring people along with you. And all that aside though, I don't think it you know we have to mention like the governance structure. 

We've spent a lot of time in that two and a half years building a governance structure that I would I don't know this to be fact, Mike, but I would bet that we're in the top five percent of probably the best governed as far as governance policies and structures. We work with Dr. Amy Hillman from Arizona State as a consultant, she as a board consultant. I've heard her say that like we're one of the best governed credit units, and that comes with a really supportive board who's been really open to doing this.[NA2] Bob had mentioned about how our innovation, AI is everywhere, and people are thinking that certain things are AI and they're really not, or they're they're hesitant to jump into it, or then they or they've completely jumped into it headfirst, forgetting about governance policy. So, like we started at the very beginning and built a governance policy, so actual governance policy that's board approved around AI AI usage within our organization, and how that looks from a board perspective, an executive perspective, a risk perspective.

 And then we took the small steps, right? So it's you know, let's crawl before we walk and then walk before we run. We’ve run very intentional pilots with smaller groups, we've expanded those pilots. And the intention with us is to make you better at your job, not replace you at your job. And I think that that's really important because there's all the news is how we save. And there's been lots of reports out in MIT, Harvard, about- there hasn't been really any cost savings recognized yet. Our intent is not to save on FTE, our intent is to make our FTE more productive at what they do. Spend less time doing the monotonous stuff that AI can help you with so that you can spend more time either serving your direct reports, or if you're member facing, spend more time servicing the members rather than doing the back office tasks.

Bob Leger 11:52

I’d say another thing that's been really important for us to make sure that we build a strong foundation and don't just change things tactically is the work that we've done on the human resources side. We have a fantastic chief people officer in Ellie Floridais and her team, and they're really an important part of the organization. They're just not where you go if you get in trouble, but rather they're those people that can help us all to be better employees and work better together. They've helped us to design an entirely new set of values, and the rollout of that has been really impressive and impactful. And that shows up in our employee NPS course. We do not just member feedback and member satisfaction surveys, but in employee NPS too. And year over year we had improvement in all of the five major categories. So major we know that our employees are really buying into and really you know the most important part of the changes that we're making.

Mike Ensweiler 12:42

That's pretty cool. So, you know, the the AI is obviously a hot topic. I think addressing the AI, especially with employees all over the country and trying to build that culture is is a really big deal. Are there any other you know, kind of innovative ideas that you brought to the credit union and its membership?

Chad Lewkowski 12:59

Yeah, before I hit on those, I just want to like kind of tie up on the HR culture thing, which I think is unique to a credit union. On the first week of April, we will shut down for an entire day. For Workers Palooza. Everybody that's remote is floating. We spend a day. Last year was only a half a day, and it was so well received because it's the first time that they've really done anything like this. Ellie and her team, along with like our learning development and our marketing team- actually, there's a lot of people that participate in this,- have TED talks and include it's not just us talking at them. We bring everybody along. And this year, it was so big last year. The celebration is an entire day, April 8th, I believe. Everybody comes in, everybody will participate, we will shut all the branches down so that everybody, call center, everything shuts down so that they can participate and bring it together. And so you'll have 320 roughly employees all together in one venue for an entire day, which I think speaks, it's just an example of how important culture is to us and how important we believe it is within the business that we're in.

Bob Leger 14:14

And a lot of the things that we do outside of AI that I think are innovative are meant to build larger innovative solutions. So it seems kind of silly, but we have walk-up music for our outdoor meetings, which is fun, instead of having the employee of the month, you get to choose the walk-up music. But we do that in part to set the tone that this is a collaborative discussion, and we're not just there to read out reports that hopefully people understand 25% of them, but rather that to have an engaging discussion. So we've also taken the presentation materials that we have, and they all have a QR code on them so that people can give feedback during the meeting about does this make sense? Do I have questions about this? Is this a helpful report or is it not a helpful report? But we think the more engaged that we can get this group and as an institution, the more likely we are to come up with some really innovative solutions that will help our members.

Chad Lewkowski 15:04

And I think going back to additional things that that's unique in the credit union space. I've not been in the credit union space. I think it's unique. I look around at my peers, I'm sure there's somebody out there that's doing also some really unique stuff. I've just not come across them yet. A good example is you know that the credit union moved to ITMs at one point, 2019 and 2020. And the ITMs are with improvement of technology, are pretty much outdated. Yeah. They were a really cool thing, others are still using them and using them effectively. They weren't effective for us.

And so our team is, you know, it was an expensive endeavor, but we're able to make a hard pivot away from them. And so we are moving away from ITMs. And my I firmly, and I said this in a board meeting, if somebody is parking their car in today's age when you have your phone and your computer, and they're walking in, they're not walking in to talk to a machine. Like they could have talked to their phone or their computer, they're walking in to talk to a human and get serviced by the teller, by the branch manager, not an ITM. So based on that, we've quickly moved away or quickly moving away from ITMs. We believe it's the right thing to do from a member, like how to differentiate ourselves, right? Because just like airlines in banking, it's hard to differentiate yourself. You know, it's it's hard to be super creative in this space.

That being said, we've done some big in that two years, two and a half years, we've some done some big technology with us. We've gone to a whole cloud-based phone system, which is a whole bit, a whole different thing for the team. We’ve been put a commercial lending LOS. We just are finishing or we just finished putting in a new mortgage lending LOS and a pricing product engine to partner with it, which goes into building a secondary market, which goes into working with ALM hedging, derivatives. So it looks more like a traditional mortgage shop than a credit union. You know, we've switched our strategy from originating to put on our portfolio, lend off of our balance sheet to originating to sell. We work on the traditional side of the market where we sell to your traditional secondary market participants, but also setting up flow relationships with credit unions is part of what we're working on as well. Because as we've heard so far this week, there's a lot of people that have a lot of need. There's a there's a big need for loans, right? Assets for them to hold.

That’s been one of the things that's been fun. That you know, the the technology, the openness to put in new technology, right? Jay always often uses people, process, technology. I’ve shared that the people were great. We brought in Lacey Gettings, who is our chief performance excellence, business process management and project management office, working through like the Baldridge framework. So the four seasons is an example of great Baldridge Elevations Credit Union as a Baldridge winner, but it's how well you you know your processes are put together that they're repeatable and scalable. So having her on board to kind of manage all of these changes that we've done in two and a half years is remarkable. But that's the processes, and then we had to buy the technology.

Or in some instances, going back to AI really quick, is vibe coding. I don't know if anybody's ever heard of that term. So vibe coding is literally using AI and inputting something like, “ build me something that is like X.” Okay. If you did prompt it, Claude or whichever AI bought, it would come back and say, well, what features do you want that are different than X, formerly Twitter? And then you start having a conversation with it and it codes for you. And so our CIO has been spending a lot of time playing around with that, we will have way sooner than later, probably what I refer to as a low an operating system for the whole credit, which is like a CRM mixed with a core, mixed with like all these things. Done by a small team vibe coding. And I think that's the more powerful way to use AI that I can fairly certainly say most people are not doing. 

So we've been innovative in even branches. You know, we've looked at which branches perform and don't perform, and we figure out like how do we fix the gap when we leave a community while we build, as an example. You could put up a traditional trailer that you see sometimes, the wood trailers to fill the gap. It's not the right message, it's not the right service model. So we're in the midst- I've shared with some of the people at ALM this week- of creating the business case of having a mobile branch. It's not quite an 18-wheeler. Bob likes to say it's an 18-wheeler, but not everybody can drive an 18-wheeler, but a mobile branch, and that's not unique. P&C has done it and run in the market with it. But I think that's a way we're in a rural area of Massachusetts. We have an older demographic. We go to, we need to be going to where the members are. So if that's a nursing home, an old folks home, a community center where they all play bingo, whatever it is, we need to go to them. We’ve had a lot of snow this year in Boston. It'd be nice to go to them versus them not being able to come to us. 

So we're trying to think of things like a little bit differently. Bring back some of the old, like right, just like fashion, everything cycles back. Yep. I believe like in-person relationships are important. So if you're gonna walk in, we're gonna take care of you. And if you can't walk in, we really want to go to you. 

Mike Ensweiler 21:09

And Bob, you've got to figure out how to pay for all that, right?

Bob Leger 21:12

That's right. With the help of ALM first.

Mike Ensweiler 21:15

That's a great answer. Is there anything you know from the finance seat that you guys are doing that maybe is a little bit different? Because it sounds like a lot of really cool ideas. And I said that happened just, but you have to- coming from a non-profitable situation to be able to put all of these things in place. What are some of the things that you're looking at to be able to afford to serve your membership in this way, going to them and making sure you have people in there and replacing ITMs and all the vibe coding? I mean, it sounds cool.

Bob Leger 21:46

It is. A lot of conversations between Chad and I. From brainstorming these innovative ideas to execution and being able to afford those things.

Mike Ensweiler 21:53

And monetizing them in some way, right?

Bob Leger 21:55

Yeah. Hopefully. But a part of it is just fundamental asset liability management and that we had a real we're very leveraged and we have a really low net interest margin. And so, how do we work as an institution in order to improve our margin? You know, we've got to decrease our cost of funds. We're really low in comparison to peers there. Really high. And so looking at those traditional metrics, but also you know, kind of going back to the faster that we can have all of our employees understand what good asset liability management looks like and why we price the deposits the way that we do and the loans that we do, and how these products can be helpful for our members and also profitable for us, the faster that we'll continue to recover from this.

Chad Lewkowski 22:46

That’s the power of this team, right? Is you can take the ideas that spin around in my head. I'm not the only ideas person, like this team has come along very quickly to being like, and it it's really we talk about like a psychologically safe space, where my team ideates with me. It's not just listening to me come up with ideas, they push back and say that's stupid. And what do you think? Of this, and we're like, “Well, that's stupid.” What do you think of this? And it pings around. 

Bob Leger 23:14

You’ve heard them say that? 

Chad Lewkowski 23:15

Yeah, absolutely. He thought he was the only one. We have those open conversations, and everybody's willing to. I was just on the phone with Via who runs retail, and I sent her a picture of a bus, and I said, “This is your new branch.” And she's like, “Great, I can't wait to drive it.” And I talked to her this afternoon, and she's like, “I already started like business planning, and like, are we really doing this?” I said, “We're gonna do it unless we can't.” My intention is we will do this. We're we're building a new branch in an area that's has been typically underserved, right? And so we're trying to solve moving into that area, like a drip campaign, showing them that we're coming while we build, because you can't just build overnight. Although we will build faster in this community because we will build probably very likely we will build in shipping containers. Which I know Thomas was totally excited about when I brought up shipping containers. If you think I'm crazy, go look at them, type in shipping container banks in foreign countries, they're everywhere. If you go to Spain, they're Mexico City, the Netherlands. That's that's a thing. Yeah, drop them on a city block, literally in a park, and you have a bank. I don't know why we can't do the same thing. They all ideate with me. And that's Jay has enabled that, Bob has supported it. And again, Lacey has made sure that we can keep things on the rails and we can do all these things. Sometimes concurrently.

Bob Leger 24:45

Yeah, we do that, and we're able to- with Lacey's help and her team- be able to bring those innovative ideas to execution, which of course is the most important part. They just got to be able to hit the street and not just be a cool idea that we talked about in the meeting.

Chad Lewkowski 25:00

But I'd say our hit rate is pretty darn good. Like we're not batting a 1.000, like but I I've said over and over- this is coming from the startup- I've spent time not only building startups but investing in an early stage. Ideas are cheap. It's the execution. And we execute. And I think that is a- you looked at our team and you were to pull Jay in here and ask him, and you could even ask the board members, what we say we're going to do, we do. And I think that that goes a long way. It's not only credibility with our peers, like Bob and I, and with our board members and the regulators. I think it's with our employees too.

Bob Leger 25:45

I think an important part of that too is the humility that Jay models for us and that we practice as a team, and that when we make mistakes, we call them out. We call them out quickly so we can move on from it, but also to make sure that everyone in the institution knows that nobody's perfect and we want those ideas and hopefully they work out, but sometimes they don't. But the important thing is that we're all trying to accomplish the same mission, and not just their- we don't just want their hand, we want their hearts and we want their minds too.

Mike Ensweiler 26:15

Well, this has been an awesome discussion. We are kind of butting up against the clock, so to speak. So I'd like to just get some closing thoughts from each of you. So what would you want other you know credit union leaders to steal from your playbook or just kind of anything you'd like to share with the audience to wrap this up?

Chad Lewkowski 26:33

Yeah, I'm an open book. You know, I love talking about this stuff. If you're a credit union leader and you're listening to this, shoot me an email. We can ideate on this, solve for your market. I'm always open to having those discussions. None of this is proprietary. And nobody copies a bad idea, right? Like nobody tries to build something- “I'm gonna do what you did, Mike, and your idea was terrible. I'm gonna do what you did because that was a really good idea.” Yeah, I'm just going do it better. I learned the credit game space. It's friendly. I think we can all learn collaborative, we can learn together. My door is always open. So please reach out to me.

Mike Ensweiler 27:14

Yeah, that's great. How about you, Bob?

Bob Leger 27:17

Be open to the fact that the solutions for different innovations or problems may lie well outside the area that we might think they're from. So the more that we can have all of our employees understand the mission and work towards that, and that those brilliant ideas, those innovations for the finance area may come from someone in IT, they may come from someone in HR, but the more that we can all understand where we're going, and as Lacey always reminds us, not just rowing in this the same direction, but how we row, when those paddles dip into the water and the angle that they go at. And the more that we can do that well together, the faster that will continue to improve.

Mike Ensweiler 27:57

Well, this has been really enjoyable. I want to thank you both so much for spending some time with us today. To people in the audience, reach out if you have any questions, comments, concerns.Thanks, gentlemen. Really appreciate it.

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Mike Ensweiler (Outro - 28:17)

As we conclude our discussion on innovation and transformation, it's clear that successful credit union turnarounds require more than just good ideas—they orchestrate cultural change, disciplined execution, and a willingness to do things differently. The conversation with Chad and Bob from Workers Credit Union highlighted several critical practices that distinguish institutions that transform from those that simply survive.

Three key takeaways from today's conversation:

First, culture is the foundation—Workers Credit Union prioritized building a psychologically safe environment where employees at all levels can ideate, push back on ideas, and collaborate across functions, recognizing that the best innovations often come from unexpected places and that cultural transformation enables operational transformation.

Second, governance before innovation—rather than rushing headfirst into AI and new technologies, Workers built comprehensive governance structures first, then moved intentionally through pilots, ensuring they were making employees more productive at their jobs rather than simply chasing cost savings or following trends.

And lastly, execution beats ideas—as Chad emphasized, "ideas are cheap, it's the execution," and Workers has built credibility by consistently doing what they say they'll do, whether it's with their board, regulators, or employees, proving that innovation without execution is just wishful thinking.

Thank you for joining us on "In Your Best Interest." We hope this discussion provides valuable perspective as you consider how to balance innovation with fundamentals and build a culture where transformation is possible at your own institution.

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[DISCLAIMER - 29:32]

The content in this podcast is provided for information purposes and should not be relied upon as recommendations for financial planning advice. We encourage you to seek personalized advice from qualified professionals regarding all investment decisions. Current and future holdings are subject to risk and past performance has no guarantee of future results. Podcasts should not be copied, distributed, published or reproduced in whole or in part. Information presented herein is for discussion and illustrative purposes only and is not a recommendation or an offer or solicitation to buy or sell any securities.

Any statements made by individuals regarding Workers Credit Union’s operations, governance, or business practices may be considered testimonials or endorsements under applicable regulations. Such statements reflect the views and experiences of the speakers and may not be representative of the experience of others. No assurance is given that similar results or experiences will be achieved. Unless otherwise states, no compensation was provided specifically for these statements. 

Workers Credit Union engages third-party service providers, consultants, and advisors referenced in this discussion and compensates them for their services. As a result, these relationships present potential conflicts of interest, as such parties may have a financial incentive to speak favorably about its operations.