Focus on the Fish Tank, Not Just the Fish – An Interview with VSECU’s Robert Miller

Stewart: Diversification is a key tenant of investments and investing assets. The theory is, “Don’t put all your eggs in one basket.” But diversifying a workforce, that’s a little different challenge. We’re joined by somebody today who is maybe an unlikely guest on the Insurance AUM podcast, but someone who has a track record of achieving some success in the area of diversity with his workforce.

I’d like to welcome Robert Miller, president and chief executive officer for the Vermont State Employees Credit Union, a member owned cooperative and not-for-profit credit union in Vermont. Rob, welcome.

Rob: Thank you, Stewart. Happy to be with you.

Stewart: Just so everybody knows, so VSECU serves 70,000 members, has $1.1 billion in assets, 200 employees, 9 branches statewide in Vermont. You’re a Vermont person. You graduated from the university of Vermont. Started a career in financial services with Citibank in New York and Chicago, our home. He relocated back to Vermont as a state employee and public servant working for the Vermont department of economic development, where you ultimately served as commissioner.

Prior to joining VSECU, you spent over a decade in executive roles in the institutional investment management industry with Dwight Asset Management and Conning. So you are right steeped in the tea with us. You sent over some talking point bullets, and I’m just going to read the first one and let you go. Ready?

Rob: Okay. I’m ready?

Stewart: Be intentional about being more intentional and for what purpose?

Rob: Yeah. Well, let me begin by saying, as you and I’ve talked beforehand, VSECU in this regard is very much of a work in progress. And I like the way that you teed it up with the correlation to asset diversification, right? A core tenant, if you will, of proper asset management theory. The theory being the more holdings you have, the more diverse portfolio you have, the better risk adjusted returns that you can achieve, particularly in many cases. And the same is true as it relates to the culture of an organization. I think historically the way that organizations have been run, they’ve been run fairly top down with centralized decision making, rigid hierarchical structures.

And what we’ve been able to experiment with at VSECU is a much more distributed decision making process that puts the power of decision making in the hands of a broader group of people, but more importantly, more perspectives that get brought to the table, and therefore, we believe make better decisions. Same as having more diverse portfolio holdings allow you to have better risk adjusting returns. So the basic tenant to our theory that we’ve been following for quite some time has been that the more perspectives you have sitting around the table that are involved in making decisions, the better decisions that you’re going to make.

And so that’s sort of our goal, our tenant, if you will, about being intentional. What I’ll say, Stewart, is that over the last couple years though, following the murder of George Floyd, we like to consider ourselves, we have been very intentional about building this inclusive decision making framework within VSECU. And, we also like to think of ourselves as a fairly conscientious brand, if you will. We stand for economic and community and environmental wellbeing. And we structure our products and our services and our business operations around that. But following the death of George Floyd, frankly, we felt a little flat footed and didn’t know how to respond in ways that didn’t feel performative.

And, we began to realize that while we had made tremendous progress in inclusive decision making in our organization, how diverse were we really in the perspectives and the lived experiences of those people sitting around the table that were making those decisions or providing input in those decisions? So, that’s what I mean when I say be intentional about getting more intentional, but also understand your purpose.

We had to sort of reformulate our view on this and say, “Okay, there are a lot of things that we didn’t consider in all of this that we now need to learn and evaluate and be open-minded and openhearted in that process”, and realize that it is a process, just like our process to create an inclusive decision making culture. It doesn’t have a start and end, this process doesn’t have a start and an end. And fortunately for us, they kind of dovetail together because they are quite related.

Stewart: It’s interesting. I kind of… This investment parallel. You’re trying, with investments, you’re trying to maximize the level of return for a given level of risk, which we measure in finance as volatility. And, in workforce diversity terms, it’s really the value that you’re getting for your gross payroll, right? If you have a diverse group, you think you’re getting a better set of decisions and a better set of information, that’s your alpha, if you will, if you want to put it in investment terms, that’s the alpha. Is that fair?

Rob: Yeah, I think that’s fair, but I would add another layer to it, which gets back to sort of the purpose element of what I provided to you. Which is: yes, that’s the alpha in some respects, but the alpha for us gets translated into our impact on our mission, right? And our mission is to improve the quality of life of our members. We define that as economic, environmental, and community wellbeing. And to the extent that we can blend together the culture of the organization in a way that is consistent and moves us closer toward that purpose. That’s really how we think of alpha. So, it’s just a different way of measuring alpha and a different way of thinking about it. But I think the analogy is consistent.

I would also point out that there are a lot more complex elements that get factored into this scenario, versus some of the factors that go into portfolio management theory, that have to do with human behavior, have to do with systems that we’ve set up over hundreds of years, really influence this. It’s just why you have to be adaptable and you have to be willing to be open-minded and open-hearted, and you got to be willing to learn and adapt as you move forward.

Stewart: I mean, that’s your second point, right? Be self aware, open-minded, and willing to learn. So I guess, where I’d head with that is, and you’ve talked about your mission. Would you be able to execute on that mission as well if you were at a bank, a traditional, like one of the major banks? I assume that you being a credit union allows you to be more thoughtful and mindful about those community impact issues? Is that a fair assessment?

Rob: I don’t know that it’s fair necessarily. I think it depends on the organization, and the, more importantly, what are the values and the purpose, why does that organization exist and what are the values by which that organization lives up to? In other words, what do they stand for and how do they do it? And I think there are banks, traditional out there that are not organized as credit unions, that also accomplish really meaningful things in their community and live the same sort of values. So, I don’t think it’s necessarily true. I think it’s frankly probably more common with credit unions because we don’t have the same profit motive, if you will, as traditional banks. And so it’s just a little bit easier to maneuver within that framework.

Stewart: So you say it’s a marathon, not a sprint. Wall Street’s been trying to, at least stating, speaking the words that they wanted to hire a more diverse workforce for my entire career, which spans some 300 years it seems like. It is definitely a marathon. But right this minute, it seems to me that we are, as an industry, more tolerant, open-minded and becoming more diverse in a meaningful way than ever before. Can you talk a little bit about the marathon versus the sprint?

Rob: Yeah. Well, the issue is that it is a cultural issue. It’s not a recruiting issue. The reality is the reason that it’s taken so long is because I think often times organizations focused on, “Well, we need a more diverse workforce, so let’s go out and recruit a more diverse workforce.” Which you can do, but that is short term in its effect if you haven’t addressed the factors within your culture that actually create a welcoming environment for a diverse workforce. And, that’s a lot more challenging in long term because you are speaking to people’s values, you’re speaking to their lived experiences.

And, it’s not just that we as leaders have to be more self-aware and willing to learn, we need to create that same value, that same dynamic within our organizations. And I’ll just take one example. This notion of let’s just call it privilege, any kind of privilege. The reality is, I walk around with a lot of privileges. And those privileges have changed over my lifetime. I didn’t grow up with a lot of money, so I didn’t have that privilege growing up, but my skin was white. I was male. And those have afforded me advantages in life that others that don’t have white skin or are not male don’t necessarily have.

Getting comfortable with that dynamic can be challenging for folks, especially folks who have struggled in life to acknowledge the fact that they have privileges in other areas. It doesn’t imply that you’re right or wrong, it just implies the reality of what the situation is. Those are the kind of conversations and the self awareness that you need to try to encourage people in your organization to adopt. Because, once you do, then you can take substantive steps forward in creating that welcoming and inclusive environment that actually then will facilitate and support the recruitment of a more diverse workforce, which will then lead to better decisions because you have greater perspective.

Stewart: I have a friend who went to a fancy business school and got hired by a fancy Wall Street firm, is of African descent. He said he was one black person of a recruiting class of 49 other white recruits. Now, this is not a black white issue. This is to your point, “It’s the fish tank, not the fish,” right?

Rob: Right.

Stewart: Hard to feel. I don’t know if I was in that situation, I would not immediately have a welcoming feeling as I walked into that room. Can you talk a little bit about “it’s the fish tank, not the fish”?

Rob: Yeah. This was advice that I received a number of years ago that as leaders, we often tend to focus on the people, the individual people. And if we can just get more performance out of this person or that person, or if we get these two people to work better together, then everything will be all right. And while that’s not untrue, and that’s certainly a component of leadership, you can have, let’s just go with the same analogy, you can have an incredibly diverse array of fish in your fish tank, but if you have a toxic environment, a toxic ecosystem, those fish aren’t going to survive. And, the same is true in organizations. The reality is that as organizations, we are ecosystems and we’re complex ecosystems because people bring their selves to work, but they also bring their experiences, their perspectives and everything else.

And just because, as a leader, you want something specific to happen, just because you ask for it to happen, doesn’t mean that it’s going to happen. This is where you really do need to listen and you need to incorporate the perspectives and views of others and utilize your skill, your leadership skill, to influence and to guide, but at the same time, be open to modifications in your strategy. So, the same is true in the area of diversity, equity and inclusion is that you really need to focus on the fish tank, the culture of your organization and the environment that you want to foster and cultivate so that you can create a welcoming and inclusive environment for a number of different perspectives in your organization, which will make your organization stronger over time.

Stewart: I mean, race is a third rail. And I’m just going to go hop right on it. Because a lot of times I think there’s two things I think that happen. And we have a really excellent podcast with a gentleman named Dion Woods who runs something called the DIME program. And the title of that podcast, one of the titles that we bandied about was, “Diversity, It’s Not a Charity Program.” So I think in general, you hear people say diversity, they get this idea that somehow or the other I’m hiring subpar talent. I’m not getting the best. I got to do this diverse thing and I’m going to, okay, that’s what I’m going to do. And your experience has been exactly the opposite of that. Right?

And, I also think that when the term diversity is used, as a white guy, there’s a lot of people who hear, “That excludes me.” But I think that is really a critical component because the diversity includes all of us. The second part of diversity is inclusion. And I think a very, very important part of it is belonging. You can include me, but if no one talks to me or no one, I have no interactions with anyone in that group, I’m going to find another job. Right?

Rob: Right.

Stewart: I am. You talked about the murder of George Floyd and the knock on effects that it had in your organization, you weren’t prepared for. How do you create the right fish tank?

Rob: Yeah. I mean, I think it comes through a series of both formal and informal processes. As well as, again, it gets back to the sort of being intentional about being intentional. And so the reality is, you have to create an environment where differences are celebrated, and we can think of diversity frankly, much more broadly than just race. It’s diversity of opinion, it’s diversity of perspective. And diversity, or difference, if you will, can create something that we refer to in our organization as tension. Now, most of us think of tension as being negative. And that’s because tension is usually processed in most organizations as conflict. That’s mostly our experience. But, if you’re more intentional about processing tension as information, then you can move forward, right?

Because that’s what tension typically is. And, if you can make the implicit more explicit, then you can process tension as information and move forward together. And then there are simply processes and techniques that you can use to ensure that everyone’s voice is heard, but that you’re able to arrive at decisions relatively quickly. You got to kind of give up this notion of always having a sense of urgency, which has been drilled into us from day one at business school or college. Because, that sense of urgency actually prevents you from getting a diverse perspective, right? Because, you’re so focused on moving quickly that you don’t listen to all the different perspectives that go into it.

And we also need to get away from this notion of perfection. And, we need to embrace the idea of experimentation and reflection based on that experimentation and then adaptation going forward. So you try something, you learn from what you tried, and then you adapt and repeat, right? And just constantly do that as opposed to trying to come up with the most perfect solution and then not reflecting on it whatsoever.

So, I’m kind of getting a little bit off track, but it’s all of that and the tools and the training and the support that you provide to your staff and your employees and your leaders to help sort of live those principles. Yeah, and live those values. And, you got to be used to being a much more transparent organization. People don’t have access to information, they can’t offer you their perspective. And transparency is hard for a lot of folks.

Stewart: And decentralizing those decisions and letting go of that control can be a challenge for managers and executives, right?

Rob: It can be. I would tell you that control is a bit of a false promise. We all like to think that we have it. And none of us actually do, because our organizations are complex ecosystems. We may think we have control, but the reality is that we can’t necessarily always anticipate what the results are going to be from decisions that are made in ways that we think that they’re going to happen.

Stewart: That’s a really good point. There’s another well known group, Whole Foods. When I taught, we did a case on Whole Foods. And one of their cultural characteristics is that when you join a team, at least this is the way that it was, I have no data as of today. But when you joined a team, there was a period of kind of an indoctrination period.

Then the team voted on whether you were going to stay on or not, because each team had a P and L and they were concerned about, or they’re focused on, how did the team perform from a P and L perspective. And then if everybody’s doing that right, you roll that up and you end up with good results, right? So, that decentralized decision making has been proven successful. And the continuous improvement process that you’re describing, I remember I have a good friend from business school who worked for a company that made paint for the bumpers, just the plastic parts, for Toyota and Honda. So, the mirrors and the bumpers and stuff like that.

And the level of precision that they went through and the constant examination of their standards and so on and so forth was incredible. But that continuous process, and you’re never going to get it perfect, it’s always going to be a work in progress, isn’t it? I mean, we’re evolving I think more, I mean, at a rapid pace, but it’s always going to be a work in progress, isn’t it?

Rob: I think it is. And, it does require all of us. Not just us as leaders, but all of us in organizations to let go of the ego a little bit and focus on the whole, right? And focus on the eco versus the ego. And to… Yeah, I say this all the time internally at our organization, that it’s more important that we agree on what we will collectively do together and be committed to that than being right individually. Because how do we know we’re right?

We think that we’re right based on our own experiences and our perspectives. And, that’s not the perspectives necessarily of the world around us, and increasingly so. And so, that’s why everyone’s perspective is important and why we need to not be so concerned about being right, and be more concerned about agreeing as to how we’re going to move forward together, which means that we have to be committed to progress as opposed to perfection.

Stewart: Yeah. I think that’s very, very well said. I mean, it starts at the top Rob, as you know, and the title of the podcast, I mentioned, Dion Woods is going to be “Diversity, Revelation or Revolution.” And, organizations need to attract talent, future talent. And, that talent that’s coming out of colleges and universities is very different than I was coming out of university. Their objectives and goals and value system is different than mine’s. It’s a totally different environment. And yet, managers and executives my age, look at this group and go, “They don’t want to work.” And it’s, hang on a minute. Salesforce is getting 10,000 applications a day and the insurance industry can’t attract the data science talent that it wants.

And, our former intern actually said on a podcast that young people, her contemporaries (she’s at Loyola of Chicago) make decisions about the industries that they want to pursue in part based on how they handle diversity, equity, inclusion, and belonging. How do you see the future of the financial services community versus the hot dot, which is tech. Everybody wants to go to tech these days. The financial services community is a wonderful career, banking, asset management, insurance, credit unions, all sorts of opportunities. How do we reach the folks that we want to reach with those opportunities and make them aware of the opportunity and that there’s progress being made?

Rob: Well, you bring up an excellent point, right? The world that we were brought up in, and the management strategies and learning that we grew up with, is less relevant today than it was when we were growing up, which makes it really hard, right?

Because, we have to learn new things as well. But yet, we also have a lot of value that we can provide to younger generations to broaden their horizons and understanding, so we can all benefit together. And I think, it’s a loaded question in the sense of the future of the industry. I think generally speaking, all of us need to really be introspective and reconnect back to what we believe is the core purpose of our organizations. Usually when you ask someone, “What’s the purpose of your organization?” They tell you what they do.

Stewart: Right.

Rob: We manage money for insurance companies. Well, why do you do that? And there’s a technique that says, it’s called the five whys. If you ask why five times, you ultimately get to the core, right? Why do you manage money for insurance companies? Well, we manage money for insurance companies so that they can earn a greater rate of risk adjusted to return. Well, why do they need to earn a greater rate of risk adjusted return? Well, so that they can continue to provide affordable… It ultimately probably ultimately gets down to their ability to help people protect themselves. Well, that’s a lot more compelling than ‘managing money’.

And so, and that allows you to frame your decisions and the environment that you foster and cultivate in your organization a lot differently. And I think, that’s going to be really important that we really need to reconnect back to our original purposes. It doesn’t mean that we lose the profit motive or any of that kind of stuff, it just means that we frame it a little bit differently in a way that more people can buy into and get excited about.

Because, as we all know, if we don’t have highly engaged and motivated people that are part of our organizations, we’re not going to be successful. So how do you provide that motivation? And, for the younger generations, we really need to be more connected to purpose, whatever that purpose may be. And ultimately, people will decide whether they want to be a part of that purpose or not.

Stewart: I think that’s such a great point because a lot of my career, I wondered what the hell good am I doing anybody? Right? I’m running 25 billion bucks. I got 12 clients. Hey, that’s great. They’re wonderful. I make a good living. Okay. Happy days. What the hell good am I doing anybody?

Rob: Right.

Stewart: And I think getting it from… And I think there’s a huge opportunity in insurance companies. I love insurance companies, love the industry, love the asset management space. It’s been very good to me. Have a lot of friends in the business, right? Ultimately, it gets down to ‘you are helping people protect the things that matter most in their lives’, whether that’s home, auto, the death of a loved one, whatever it may be. What I always told my students, I’m, “I think the insurance industry gets such a bad rap.” And I always tell them. I go, “Whenever you watch on television, after a tornado went through some place and there’s just sticks and debris every place, and you’ll see paint on some of the houses.” I go, “That paint is from the adjuster of the insurance companies who are walking down the street, writing checks to helping people rebuild their lives.” That they’ve lost everything or close to it, they need a place to live and they need money to do that, and the insurance industry is there and helping people rebuild their lives. I think that’s the meaning. That’s how you can get some meaning associated with it.

Rob: Yeah. And I agree. I also think that we have to expand our perspective a little bit because the reality is that we’ve made decisions in the past as a society that are now, those checks are coming due. And, if we don’t broaden our perspective to consider a whole multitude of different stakeholders and constituencies and factors in our society—number one, younger generations are going to demand it. Number two, they should demand it because it’s the right thing to do. And so, we need to think about what our impact is on the environment. We need to think about what our impact is on populations that have been left behind by society in the past. Because it benefits all of us, right? If a greater a percentage of our population is experiencing financial and economic and social wellbeing, that’s good for business too.

Stewart: Absolutely.

Rob: We don’t have to think of it that way. We can’t just think of it as the right thing to do. But the reality is, it will be a tide that lifts all boats.

Stewart: It’s good for everybody. Absolutely. I think people listening to you can get the sense that you are a very special leader. As much as you want to deflect the praise, I think that it’s pretty evident to me that you are a big part of the success that VSECU is experiencing, and so I only have one more question for you, and it’s one that we’ve asked before. So, I’m going to take you back to your graduation from your undergraduate institution. Your last name starts with M so they read your name. Kind of, you’ve been waiting a while, but not forever. Right? You walk up the steps. I’ve been to a thousand of these graduations as a professor. Okay.

So, you go up the steps and there’s a person there that’s kind of, you have to wait, and then they read your name. And across you go. Now the crowd’s gone crazy, Rob, crazy. They’re out of control. You walk up, the president shakes your hand, hands you your diploma. You have a quick photo op, right? Down the stairs you go. At the bottom of the stairs, you meet Rob Miller today. In this COVID geopolitical twisted mess, what do you tell your 21 year old self today?

Rob: It’s a great question with all the experiences that you’ve garnered over that time period, what would you go back and urge yourself to do? And I guess, I would encourage myself to be a little bit more patient. I think that at that point in my life I was always looking towards that next thing, right? When it was high school, you were looking forward to college.

When it was college, you were looking forward to getting into the workforce. When you’re in the workforce, you were looking forward to that next job or that next opportunity. And you never really took time to either appreciate or reflect on today. And I actually have come to believe that reflection is probably the most important thing that we can exercise as people.

It’s just simply looking back and reflecting on what you’ve learned. And it doesn’t mean that you have to translate that into action steps, right? We’re all used to, “We got to have an action plan for this, that, and the other thing.” It can just be reflection that seeps into how you think about things going forward. And it doesn’t necessarily always have to be so action oriented.

And, calm down a little bit and let life happen and enjoy the good things. I mean, part of the reason I came back to Vermont and had the opportunity to take this position was to spend more time with my family. In my prior life, I spent a lot of time in airplanes and airports, and it was exciting traveling the world and doing big stuff. But family’s everlasting and that’s what’s really important.

Stewart: Going to those third grade plays have benefits too, right?

Rob: Yeah. I actually was, I was able to be a soccer coach. I had never had the opportunity to coach before, so I-.

Stewart: Look at you.

Rob: That was entertaining.

Stewart: Good for you. Good for you.

Rob: Yeah.

Stewart: Well, I think.

Rob: Yeah.

Stewart: I mean, you’re a very special leader and I admire what you’ve accomplished and I want to just give a shout out to Milena Humplik and her firm, Broad Street, they’re an executive search firm, her partner, Margot DeMore. They’re wonderful. They’re a leader in the financial services executive recruiting, and she’s the one that got us together. And I really, I want to thank her and I want to thank you for being on.

Rob: Oh, thanks. I appreciate the compliments. I’m not sure I’m deserving, but I appreciate it nonetheless.

Stewart: My pleasure. Thanks for listening. If you have ideas for podcasts, please email us at My name is Stewart Foley and this is the Insurance AUM Journal podcast.

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