Disrupting the Strategy Status Quo

It’s easy to understand why some credit unions are resistant to change. Our history was built on an unassailable business model that made it difficult for anyone to take business away from us. And, if what you’ve done in the past has worked well, why not keep doing it? The answer is obvious: it’s impossible to maintain a status quo when everything around you is changing. The right questions to ask instead are, “How can my credit union remain relevant in the face of new pressures and demands, and, what is required?” The answers lie in a truly big-picture business strategy that factors in marketplace dynamics and consumer expectations.

• Holistic Approach. One roadblock I see frequently in my work with credit unions is the inability to think cross-functionally. As an industry, we do a good job of training people to think functionally. Lenders are taught to make loans, marketers are taught to promote and so on. As professionals advance to an executive level, they need to alter their thinking to prioritize the enterprise as a whole first.

• Marketplace Dynamics. The financial services marketplace is filled with disruptive innovators. They are not competing as full-service institutions, but are carefully selecting profitable slices of business—and are executing impeccably. With such huge market shifts, to compete effectively, successful organizations resist complacency. Strategy needs to be more defined than just “grow” or “survive” to include how you intend to compete. On price? On convenience? Or on some other basis? There are many perfectly good business models; understanding what drives business to you and how to leverage it is crucial.

• Consumer Expectations. The age of the membership of most U.S. credit unions is increasing. If this trend continues, we will have built in obsolescence. At the same time, we hear that younger consumers embrace social responsibility and cooperatives. It’s interesting, though, that they don’t understand the term “credit union” and connect the words to their values. Successful organizations will figure out how to account for the needs, behaviors and preferences of tomorrow’s members and meet them where they are.

When learning anything new, you first have to make a commitment to try—and then practice, practice, practice. Leaders who attend CUES School of Applied Strategic Management are taking the first step toward a new approach to strategy. At the school, we practice with a realistic credit union simulation. Participants apply a broad approach to strategy that encompasses delivery channels, day-to-day operations, budgets, salaries and multiple functional areas. The objective is to develop new thinking and provide a helpful framework to take back to their credit unions. The status quo of the future will be fluid and dynamic. By preparing leaders to think broadly and be responsive to marketplace needs and opportunity, you’ll continue to be relevant for years to come.

John Oliver is president of Laurel Management Systems Inc.