By Franck Schuurmans, Ph.D., CAE In recent years many clients of Decision Strategies International have made the switch from a multi-SEG credit union to a community charter. Erosion of the SEG relationship, the need to grow a more diverse base and the need for accelerated growth all drove this development. Yet hanging out a different shingle does not necessarily bring success. Simply changing the charter, without truly changing your market view, is a recipe for disappointment and can lead to loss of focus and declining revenue and net income. Here are some suggestions you may want to consider before and during this charter change process: • Does your credit union sufficiently understand the challenges and opportunities in the marketplace it can serve as a community charter? Have you done a strategic segmentation of the new landscape you are about to enter? What is the quality of your data, what assumptions are you making and can these be corroborated? • Have you formulated a niche strategy based on the data you developed in the research? Trying to serve everyone equally in a community may lead to a strategy that serves no one in particular. • What is the value proposition that the credit union has to offer in the community? In other words why would I give up my current banking relationship for a relationship with this credit union? • Alternatively, can you approach the charter change in a tiered fashion, one in which you continue to develop your SEG relationships and at the same time build on your community presence via branches and other outlets? These are a few of the critical questions boards, CEOS and senior managers have to address before they make the change to a new charter. Some learning curve will undoubtedly have to occur when you make a significant change to the organization. Yet the process can be made less painful and more beneficial to the members and the credit union when you first ask and then address the right questions. Franck Schuurmans, Ph.D., Decision Strategies International Inc. schuurmans@thinkdsi.com
