By Lisa Hochgraf
“What is strategy and why do you need to be great at it?” John Oliver asked the credit union board members in attendance at the inaugural CUES Director Strategy Seminar earlier this month.
Oliver, president of Laurel Management Systems, Palm Springs, Calif., answered the question by saying:
“Strategy is the No. 1 tool that successful organizations use for competitive advantage. There isn’t a financial institution I’m aware of that isn’t looking for competitive advantage, and you’ll never achieve it without a strong strategy at your organization.”
Consumers’ attitudes about how they want to do business should drive a credit union’s efforts to set strategy, Oliver said.
A lot of times credit unions look at how their offerings compare to those of the other financial institutions in town.
“But that’s missing the point,” Oliver said. “The members don’t know what other financial institutions in town are doing. What they do know is what else they can do on line and what that experience is like. A genuine competitive analysis has to look at the experience that members get out there in the general marketplace."
Oliver said there are three ways to compete: by differentiating, creating something unique in the marketplace in the ways that Disney, Apple and Nordstrom do; by having the lowest price and doing a high volume of business (“Many credit unions hate to admit this is their model,” Oliver said); or by having a specific focus, keying in on a particular member group, product line or geographic area.
“You can go for any one of those and do it well,” Oliver said. “If you get it all mixed up and don’t have a defined focus, it’s more difficult to be truly successful.”
He illustrated with the story of a credit union he visited that was trying to differentiate on service. But a teller at the drive-up window was displaying a little figure of a troll with crazy hair and the caption, “Don’t ask me. I’m not a people person.”
“I don’t think we’re truly cracking this nut,” he said. “Reality trumps intent every time.”
Lisa Hochgraf is a CUES editor.
Also read "Be Sure Your Castle has a Moat" from CUES Director Strategy Seminar.
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