4 minutes
Which apply at your credit union?
Over the past 30 years I’ve asked business leaders across an array of industries how well their current strategy is working, and heard a wide range of answers. Some changed the subject (aka, dodged the question, while essentially answering it with their lack of response). Others provided examples of how they are moving in the direction of achieving their long-term strategic goals. A few suggested (often a bit defensively) that a long-term strategy is irrelevant because things change too quickly and there is too much uncertainty. Many (including a few credit union CEOs) admitted that they’ve never even defined a long-term strategy because they’ve been too busy running the business. When I ask the same leaders how effectively they are executing their strategic plans, the answer is almost always “not as effectively as we would like.” Here are the seven reasons given by these CEOs for why this strategy-execution gap occurs.
- “We don’t really have a long-term strategy.”
Often this reflects a belief that planning for the future isn’t possible when change comes quickly and there is much uncertainty. But it also reflects operationally focused planning processes that ignore (or avoid) the key strategic questions of why the business exists and what it will become when it succeeds. The result is an annual business plan based on spreadsheet projections that keep the business on the same path and trust that what worked in the past will continue to work in the future.
- “Our strategy has been poorly communicated.”
Leaders are surprisingly candid in expressing this problem, noting that their strategy is not well communicated to the people who do the day-to-day work. As a result those people have no idea where the business is heading, and even less of an idea of how the work they do impacts whatever outcome the business is pursuing. This disconnect reduces engagement and compromises strategic results.
- “Our strategy is wrong.”
Only a few have the confidence to speak up about this. In these cases, the strategy is not aligned with the current state of the business, does not leverage the business's past impacts, or no longer fits the market in which the business operates. The most common response is to focus the team on operations and doing the day-to-day work until something or someone forces a redefinition of strategy.
- “Our strategy is too broad.”
It’s not difficult to read between the lines to see that many businesses suffer from an "if everything is important, nothing is important problem.” This leads to a strategy that simply adds more projects each year to already bloated lists of strategic priorities. It reflects an unwillingness to jettison the old to make room for the new, and provides no clear criteria for making strategic decisions.
- “Our strategic outcomes are not measurable.”
Everyone knows the adage, “If you can’t measure it, you can’t manage it.” But that doesn’t stop many strategies from including outcomes that are vague and immeasurable (even though they may have a high feel-good factor). Outcomes that are measurable are often evaluated based on measures that are overly complex, can be easily manipulated (intentionally or unintentionally), and are not connected to the actual work people do.
- “Our strategy is being ignored.”
Only the strongest of leaders can acknowledge the reality that sometimes the defined strategy is simply being ignored. This happens when organizational inertia protects the status quo, there’s a lack of buy-in/ownership of the strategy, or it is seen as the “flavor of the planning session” and something that will change again next year.
- “Our strategy is the same as every other credit union.”
Defining a clear difference is a challenge in any industry, and it is even more difficult in a commodity business like financial services. The result is that many credit unions essentially follow the same basic strategy—one that is inherently based on the founding principle of serving their members, but devolves into an operationally focused (and, I would argue, unsustainable) plan of doing more of what has worked in the past, despite the changes that are occurring in the marketplace. Which of these reasons for failing to execute your strategy apply at your credit union? What else derails your team? What can you do to address these gaps and improve your team’s strategic execution? I’ll be diving deeper into this during my session at CUES’ Execu/Summit this March in Jackson Hole, Wyo. Michael Hudson, Ph.D., is founder and principal of Big Idea Guru LLC, Rehoboth Beach, Del. The 2016 Execu/Summit agenda also includes presentations about new opportunities and risks in the evolving business cycle, proactive strategic merger plans, and aligning your board and executive team for effective strategic execution. Register for the event today! It will be held March 6-11 in Jackson Hole, Wyo.
