By Eric Weikart
Benchmarking your credit union against peers is one of the most productive practices to improve your organization’s profitability. Doing so provides you with a roadmap to greater efficiency and productivity.
It’s becoming clear credit unions need to evolve into high-performing, efficient companies in order to survive, and benchmarking is an important key to making this happen. Efficiency is more important than ever as regulators continue to limit revenue and add to the compliance burden. In addition, Visa’s PIN-authenticated Visa debit (PAVD) has begun to erode PIN interchange. With margin not likely to come back anytime soon, many credit unions are looking for ways to become more efficient.
Having specific goals and objectives for business line benchmarks not only provides a roadmap to efficiency for employees; this practice also forces accountability. The credit unions developing advanced tools to make the most of this accountability, such as automated performance dashboards that provide detailed goals and objectives tied to incentives to reward high performers, will be the most successful.
How do you bring your credit union to this level?
- First, focus on creating appropriate benchmarks by business area
- Second, set goals. Not all credit unions are the same, and understanding how yours is different is crucial to setting appropriate and realistic goals.
- Finally, monitor and report results. Without an automated calculation process, benchmarking initiatives often lose momentum
With the right mix of strategy and tools, you can guide your credit union to the highest levels of efficiency and performance possible.
Eric Weikart is Senior Director of Cornerstone Advisors, Inc., Scottsdale, Ariz.
Learn more from Weikart about defining benchmarks, goal setting, and creating performance dashboards, as well as get a taste of Cornerstone’s signature process improvement methodology, by attending CUES School of Growth and Profitability™, May 1–3, 2013, in Chicago.
