By Jason Boles
Earlier this year I had the pleasure of speaking at CUES' 2012 Execu/Summit in Steamboat Springs, Colo. One of the sessions I delivered was on credit union growth strategies. I must admit, I was a little nervous going into the session. A lot of credit unions have become wary of growth, due in large part to National Credit Union Administration assessments and the need to retain a certain level of capital.
It’s hard to wrap your brain around growth being a bad thing, but that’s what it had become. I wasn’t sure how the group would respond to the subject. Thankfully, I had little to worry about. I was very impressed with the openness of the group, the caliber of attendee, and the level of participation. The discussion was strategic, stimulating, and results-oriented. Simply put, this group was ready to roll up their sleeves and work. My kind of people.
Although I appreciate the need to control asset growth, primarily for capital preservation, I fear the day we stop talking growth, or view growth as a negative. Aside from the financial impact, growth in general can be scary and can make some people uncomfortable. It involves change. This means letting go of old behaviors while welcoming new ones.
Working with credit unions all across the country, I continue to notice resistance to change. I find this strange, due to the amount of change and evolution that has taken place within the industry. While we may not win top prize for speed, today’s credit union sure looks different from those of the past. The economy and marketplace conditions have demanded it.
However, it seems we handle change that is thrust on us better than change that is self-imposed. That’s unfortunate, because self-imposed change gives us the power to control our own destiny vs. leaving it in the hands of the economy, the marketplace, or even our own regulator. It is this type of change we need to embrace.
Growth can be defined many different ways. You can focus on growing members, loans, branches, net income, product relationships, or any combination of the above. In addition, there are two primary approaches to growth: steroid and organic.
Steroid growth is generally fast and automatic, the most popular example being a merger. Organic growth is slower and steadier, with growth coming from deepening the relationship with your existing membership.
One is not necessarily better than the other; the goal is to pick one and do it really well. Success in growth is generally realized when you have a plan in place for the type of growth you are looking for. An “all of the above” strategy is doomed from the outset. While you should be prepared for anything, you have to plan for something.
Although I am not against steroid growth, there are many things I like about organic growth. First and foremost is the people-centric nature of it–your staff engaging your membership. While there are many detailed components to this approach (HR, training, product/pricing, marketing, assessment, measurement, etc.), and it can take awhile to build, the journey is well worth it.
With this approach, accountability is critical; nobody can opt out. The commitment starts at the top with the management team and should trickle down all the way to the lowest-level staff person. Specific growth goals should be identified and all staff held accountable. And since commitment starts at the top, that is where ultimate accountability should be as well.
The group at CUES' 2012 Execu/Summit proved growth is still an important and necessary topic for credit union executives. While this topic was temporarily muted, I guess some things will never go out of style.
Jason Boles is CEO of Fans Created. Reach him at 800.433.1541.
Learn about CUES' 2013 Execu/Summit.
Read Boles' ideas on director recruitment.
