How Leadership Development Enables Organizational Growth and Change

When Rock Valley Credit Union named Darlyne Keller its new president and CEO in April 2018, she had one mandate: modernize. The organizational growth of RVCU depended on it.

Credit unions across the country were losing ground to fintech startups and getting swallowed by bank consolidation. RVCU needed a digital transformation to stay competitive. Keller had the vision, the business case, and the urgency.

What she didn’t have, at least at first, was a leadership team equipped to carry that vision through the rest of the company.

Barbara Trautlein, a Vistage speaker, principal and founder of Change Catalysts, and author of “Change Intelligence,” began working with Keller and her senior leadership team to enable them to first embrace the new vision themselves, and then to collaborate to translate the high-level strategy into action across RVCU’s branches.

Right away, Trautlein saw that the credit union’s culture ran on personal connection: members who knew their tellers by name, employees who’d built careers on face-to-face interaction. A high-tech strategy, however well-reasoned, wasn’t going to land in a high-touch culture through executive memos alone.

Keller’s early instinct was to explain the strategy again, only louder. More data, more urgency, more business case. It didn’t work. A better pitch from the top wasn’t what RVCU needed. Instead, it needed leaders throughout the organization who could carry the change themselves.

That shift became essential to RVCU’s transformation, and it only happened because Keller and her team were open to growing as leaders.

Organizational Growth Depends on Leadership Capacity, Not Just Business Strategy

By no means was Keller’s initial stumble a strategic failure. Instead, it was a signal that she and her team correctly read as a blind spot in their leadership capacity, which is one of the most common ways an organization stalls.

A strong business plan shows where a company needs to go, but the business won’t go anywhere without a strong leadership team. As organizations grow, the number and complexity of decisions grow with them.

Even for organizations that know they must grow their leaders, it isn’t easy. According to Harvard Business Publishing’s 2024 Global Leadership Development Study, 62% of L&D professionals, HR professionals, and functional leaders said that aligning leadership development strategy with business strategy is challenging or very challenging.

André van Hall, a Vistage speaker known as The Curiosity Instigator, describes this breakdown with a simple metaphor: leaders are supposed to build the road their team travels on. Leaders create the vision, direction, and resources.

But too often, he says, “management feels effective when they’re fixing potholes,” dealing with day-to-day problem-solving rather than building the systems that allow employees to problem-solve on their own.

That’s precisely where Keller and the team found themselves. They had built the road, but they hadn’t yet learned how to get everyone to trust and travel on it.

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Change Initiatives Succeed When Leaders Know How to Guide People Through Uncertainty

Over her career as an organizational psychologist, Trautlein has studied why change efforts fail. The answer, she says, starts in the brain.

Change activates the same threat response as physical pain, pulling oxygen and glucose away from the parts of the brain responsible for clear thinking.

It’s a claim borne out by neuroscience research: a widely cited study found that social threats activate the same brain region as physical pain.

That’s why “saying it louder” rarely works, Trautlein says. Employees often understand the business case, but they also experience a physiological reaction to uncertainty. No amount of additional data on its own will soothe that pain.

Trautlein’s framework breaks effective change leadership into 3 parts:

• The Head: purpose, vision, and strategy

• The Heart: people and culture

• The Hands: process and execution

Most leaders, she’s found, tend to lean heavily on the Head and neglect the others.

Keller is a “high head” leader trying to drive change in a “high heart” culture, Trautlein says. She had the vision but hadn’t yet built the trust or the tools, across the leadership ranks, to bring the rest of the organization along.

Once Keller and her leadership team spoke with Trautlein and learned that there was a different way, they shifted their approach. Instead of rolling out the digital transformation from the top down, Keller’s team launched a participative planning process. They held town halls, focus groups, and got direct input from frontline tellers.

These changes allowed employees to shape how the change would impact their roles, as well as helping leadership find problems it couldn’t have found on its own.

Leadership Development Creates a More Agile and Resilient Organization

In March 2020, RVCU finished implementing its digital transformation. It was the same month the world went remote.

Because Keller and her team had spent nearly two years building change leadership capability from the C-suite to the frontline, RVCU’s digital transformation came right on time. Members who suddenly needed remote banking got it. Employees who might have panicked already had the tools, the trust, and the shared language to adapt quickly to a now-digital world.

According to Trautlein, RVCU emerged stronger, both culturally and financially, and especially during the COVID-19 pandemic. It outperformed local competitors who hadn’t built the same foundation.

The pattern of organizational agility through growing leaders holds outside credit unions, too. When Hitachi Energy trained 750 plant supervisors in core leadership skills — communication, coaching, and conflict management — the company saw massive savings. It cut salaried employee turnover by 80% and hourly turnover by 25% within 18 months, avoiding an estimated $20 million in turnover-related costs. More than two-thirds of participating supervisors reported increased engagement, both for themselves and their teams.

Van Hall sees the same dynamic on a smaller scale. At one hotel he ran, a housekeeper suggested folding two bedsheets at once instead of one. That small idea from a staff member saved roughly 2,000 minutes a day.

“We’re so concerned about the process instead of the outcome,” he says. When employees at every level are trusted to solve problems, he says that organizations become both smarter and faster.

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Developing Leaders Allows CEOs to Focus on Leading the Business Rather Than Managing It

Before he ran hotels, van Hall says he learned an important leadership lesson the hard way.

As an executive assistant manager, he once spent an entire evening chasing down a shipment of shrimp for room service. He was tracking down security, unlocking a freezer, and filling requisition forms. Meanwhile, his pager buzzed with an upset guest and a frustrated front desk. While the shrimp was delivered, his real job went unfinished.

“If you’re spending too much time on today, then you’re not doing your tomorrow,” he says. Leaders fall into this trap when they haven’t built the capacity to delegate.

Trautlein describes it with a different image: leaders as “monkeys in a tree.” The higher up you climb, she says, the harder it becomes to get honest, real-time feedback from the people below. The top monkey looks down and sees smiling faces; the monkeys lower on the tree look up and see the leader’s posterior.

At RVCU, Keller avoided that isolation by partnering closely with key members of her leadership team to design and spearhead the change effort together. Rather than owning the transformation alone, Keller built a team capable of carrying it. Doing this freed her to focus on the broader vision rather than every detail of execution, and it also allowed employees to own the change.

By developing leaders throughout an organization, a CEO doesn’t have to choose between staying close to the ground and staying focused on where the business needs to go.

Leadership Development Should Begin Before Growth Demands It

RVCU’s story of a growing leader and leadership team kept compounding after its successful digital transformation.

A couple of years after the transformation, the credit union needed to close branch locations to cut costs and reinvest in new technology. Luckily, the same change leadership capability that carried it through 2020 was already in place.

That mattered, because branch closures threatened everything RVCU’s culture was built on: face-to-face relationships and its mission of people helping people. Handled poorly, the closures could have gutted morale and driven away both employees and members.

Instead, leaders who’d already learned to engage the Heart, enlighten the Head, and equip the Hands used those same skills again. Employees who might have left instead found new roles within the organization, saving RVCU an estimated $120,000 in avoided turnover costs.

Clear, thoughtful communication to members held account losses to under 1% (versus an estimated 2% otherwise), allowing RVCU to retain more than $1.27 million in value. The initiative delivered nearly $1.4 million in combined savings and retained revenue.

Trautlein encourages leaders who want to grow to start with a few honest questions:

• Are you and your team helping people see how a change affects their specific role, not just the business case?

• Are leaders asking questions instead of just broadcasting decisions?

• Have leaders built a culture where employees feel safe flagging problems before they become crises?

Leadership development is building an infrastructure, not a one-time training. Like any infrastructure, it pays off most after it has been properly built, but it also requires upkeep.

Organizations Rise or Fall with Their Leadership, Not Just Their Opportunities

While Keller’s early instinct to push harder wasn’t unusual, her willingness to change and build their leadership capacity set up RVCU for success.

Change is inevitable. What determines whether an organization thrives is whether its leaders are ready to carry it out. Do they have the insight to recognize that what got them here won’t get them (or their organization) there, and the courage to start with themselves first, build their own capability, and adapt their leadership approach?

This also means employees like housekeepers, van Hall says. They must be given enough leeway to carry out tasks that need to be done, rather than constantly looking toward leadership for approval.

Van Hall points to a practice the Ritz-Carlton has employed since 1982: empowering every employee to solve a guest’s problem without a manager’s sign-off. It began with $250 in discretionary spending and has grown to $2,000 today.

There’s no approval chain needed, as employees are trusted by leadership to solve problems. That’s what a culture of expected initiative looks like in practice, he says, and it’s what separates organizations that scale their leadership from those that don’t.

CEOs who invest in developing leaders today are building the capacity their organization will need for whatever comes next.

Build a Team That Can Lead Through Change

Growth requires leaders who can turn that vision into action. As organizations expand, investing in leadership development helps ensure that executive teams, middle managers, frontline supervisors, and emerging leaders have the skills to lead with confidence, navigate change, and drive results.

Vistage Leadership Development Programs provide practical, cohort-based learning experiences designed specifically for growing organizations. By developing leadership capability across every level of the business, CEOs can build stronger teams, accelerate growth, and create a more resilient organization that’s prepared for whatever comes next.

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