03_Frank Pollack

Wake Sleeping Giants

How do you persuade a big financial-services organization to stand tall and march straight? By rallying the troops around a balanced scorecard that puts customer satisfaction first, employee satisfaction second, and financial performance third.


Frank Pollack
CEO, Pentagon Federal Credit Union
Alexandria, Virginia


Describe one or more of your core leadership principles.
Frank’s core leadership principles center on stretch goals, teamwork, and work/family balance. What separates Frank from the pack is that he practices what he preaches. His actions truly speak louder than his words! In a sleepy credit union industry, Frank set Jack Welch level performance goals. Upon assuming the role of CEO, he established the credit union on a course to reach the highest levels of member satisfaction, a 1% Net Operating Expense Ratio, 20% balanced growth on both loans and shares, with Return on Assets to support it, and a commitment to having a rewarding and fulfilling life outside of work each evening. I will never forget one of my first nights with the firm in which Frank walked by my office at 5:30 p.m. and told me it was time to go home and stated, “this is a marathon, not a sprint.” For over 24 months, employees including executives leave on time and are home for dinner each evening to spend time with their families.

Show us your leadership in action: a decision that you made, a situation in which you led and that put your principles to the test.
Frank created a balanced scorecard that put Member Satisfaction first, Employee Satisfaction second, and Financial Performance third. As a self-described socialist, he created a reward and recognition system where no employee is over-paid relative to any industry benchmark and created a bonus system in which every employee (teller to CEO) receives the same % pay raise and same % bonus each year. He started with a meek 3% bonus for the just under 1000 employees in 2000 and a mere 4% bonus in 2001. Most bankers and those involved in the financial services industry would laugh at such little emphasis on individual pay and bonus. However, Frank has built a team and culture that puts the member first; as Pentagon Federal Credit Union members are Army and Air Force officers and enlisted soldiers who guarantee our freedoms and our way of life and deserve the best financial products at the lowest loan rates, highest savings rates, with no or low fees.

Describe the biggest obstacle you were up against.
Frank’s biggest obstacle to his cost reduction goals were self-imposed. He set a criteria that no employee would be let go even if there job was eliminated. He instituted a safe pay policy in which an employee would indefinitely receive their current pay even if they were put into a position of less responsibility. He takes great pride in the fact that Pentagon Federal Credit Union never has had an employee layoff and wants everyone in the Pentagon Federal Credit Union family feel safe to take risks and innovate. His loyalty and commitment to his employees is unmatched and yielding incredible returns.

Document the results of your leadership style.
During Frank’s first 24 months as CEO his leadership abilities delivered: Member Satisfaction 8.54 (Scale 1-10) Net Operating Expense Ratio reduced 21.9% Loan Loss Rate reduced 11.4% Membership Growth rate increased 103.5% Return on Assets increased 27% Net Income Increased 141.4% Double Digit Loan and Share Growth both years! No employee Layoffs! The Credit Union is positioned for some of the most aggressive loan and share rates in the financial services industry for 2002. A testament that a Socialist approach can yield returns every Capitalist would love.