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Letter from the President
Strategic Planning – Does your CU need
to reinvent its swing?
By Glenn Christensen, President/CEO, Reflection Point, Inc.
Despite
overwhelming success early in his career on the tour, Tiger
Woods willingly took the risk of overhauling his swing in
order to take him to the top of his profession. As credit
unions enter the strategic planning process this year,
credit union leaders also have the opportunity to reinvent
their business strategies in order to take their credit
unions to the next plateau of performance.
Only 7
months into his professional career Tiger Woods dominated
the 1997 Masters. In that short time he had won four of 15
PGA tour tournaments, winning $1.8 million in prize money
and generating $60 million in endorsements. Clearly, Tiger
was on top of his game. So what does he do? He deeply
analyzes his performance and comes to the realization that
he had a bad swing. Could he continue winning with this
swing? Yes. But, he believed he would have to revamp his
swing in order for him to maintain excellence in the long
run. So what does this young man who is being hailed as the
next Jack Nicklaus do? He decides to risk it all by
overhauling his swing because he believed he could become
dramatically better. He believed that he could become the
best ever.
What can
credit unions learn from Tiger? The credit union movement
has experienced tremendous success on many fronts.
Collectively credit unions have enjoyed unprecedented
growth, growing assets 43% the last 4 years. Credit unions
have added products, introduced new business lines, expanded
their branch network and implemented advanced technology
systems. Innovative cooperative ventures, such as shared
branching, surcharge free ATMs and indirect lending has
aided credit union competitiveness. Credit unions have all
the reason in the world to be proud of their
accomplishments.
Yet, one
of the greatest competitive threats facing individual credit
unions may the complacency resulting from this period of
prosperity. But, as Tiger Woods, perhaps now, while credit
unions are at the top of their game, is the time to
thoroughly reexamine the credit union and ask the tough
questions that will propel the credit union to the next
level.
As credit
unions enter into the strategic planning season, credit
union leadership will chart strategies affecting the future
success of the credit union. In establishing its future
strategies it is often helpful to gain an understanding of
the credit union’s formula for success in order to
understand the need for change in the future market
realities.
This
involves a deep understanding of your credit union’s
strategic issues.
Following
are 7 key questions credit union management should be
addressing:
- What
is the credit union’s target market?
-
Geographically
-
Wealth & Income
- Age
-
Behavioral characteristics such as channel usage or
price sensitivity
- What
is the credit union’s level of market awareness?
- What
are the attitudes and perceptions of the credit union?
- How
is the credit union differentiated in the market place?
And, is this the most effective differentiation? Or,
should the credit union move to claim a more
economically favorable market strategy?
- Do the
products support the target market segments?
- Are
there enough product categories?
- Are
there sufficient product choices within categories?
- Or,
has product selection become too complex?
- Does
the delivery channel mix provide long-term cost or service
advantage?
- To
what degree is the existing branching strategy enabling
the credit union to acquire new members and products?
- What
is the credit union’s growth by merger plans?
- How
is the credit union being positioned as an acquisition
candidate?
- What
are the stakeholder protections for possibly mergers?
Do the Executive Team members have personal financial
protection so they can act in the best interest of
members concerning future mergers?
- How
much would the credit union pay to acquire another
credit union to gain entry into a new market?
- Is the
credit union’s capital structure providing a strategic
advantage relative to other credit unions and community
banks?
The
fortunes of many credit unions have been shaped by their
affiliations to strong sponsor companies. An important step
in the destiny of credit unions will be shaped by credit
union boards and management teams in the coming months.
Strong leaders will seize this opportunity to accelerate the
success of the credit union – They will reinvent the credit
union’s swing. |
