Think outside the box. It’s an overused cliché. Instead of thinking outside the box, credit unions and banks need to think outside the moat.
A recent article in the Credit Union Journal featured a session I conducted at CUNA’s Operations, Sales & Services Council’s Conference. The session—Jumping the Shark: Has Your Credit Union Reached Its Defining Moment—focused on signs that your credit is heading toward mediocrity or irrelevancy.
One illustration I used was to think of a castle and moat. What exactly do I mean by the castle and moat theory? The credit union is the castle while the executives are the kings and queens looking out at all the members.
The challenge for credit union leaders is that we must get out of the castle, cross the moat, turn around and look at the castle from the view of the moat. Why? Because that is how members are looking at your credit union.
In other words, we must think outside the moat.
Too many times decisions are made from the credit union’s perspective, not the member’s perspective.
We raise fees incrementally so the credit union can earn extra income. We push product selling so much we lose sight of service. I’m not saying income and sales are not important—they are vital to your financial institution’s
success and we must keep them in mind.
However, we can’t lose sight of consumers.
As Patrick Adams, CEO of St. Louis Community Credit
Union, said in a post earlier this year, “We always ask two key questions at our credit union: is it good for our members and is it good for our staff. The answers to those questions drive our efficiencies.”
So how are you perceiving your credit union or bank? Are you looking at it from the castle or the moat?
Every office setting is a microcosm of humanity. Daily you’ll experience a sampling of people at their high and low points. As human beings, we’re all fallible and subject to the many slings and arrows life randomly zings our way.
What’s the best way to help overcome these down days and get the best out of your co-workers? As it turns out, trust is absolutely key in building a culture of accountability in any office, including yours.
Here are five ways you can help leverage trust as a workplace accountability building block.
Clearly define duties. Most of the job is specified by job descriptions and responsibilities. Much time, however, is spent helping colleagues and clients.Make sure every staff member knows what their job duties and expectations are. Set benchmarks for measuring progress towards them. No one likes working in the
Set aside adequate time for each task. It is not fair to assign a task and give inadequate time to accomplish it. Be realistic about the time and make sure your team members know the deadlines for every project.
Avoid showing favoritism. It’s impossible to build trust if one person is favored over others. Do your team members believe they are treated fairly? Do some feel excluded from decision-making? When there is no accountability, often one or two people will pick up the slack and take on too many responsibilities. This burns them out and lessens your effectiveness as a team.
Encourage your employees to lead. Ask about their concerns. As a leader, do what you can to resolve issues before they become areas of conflict.
Ask your staff to go the extra mile for each other. Ask your staff to define the qualities of teamwork that impresses them. Ask them to think about a co-worker they know that represents a “team player.” What are their attributes? You might hear things like consistency, fairness, cheerfulness, flexibility and adaptability.
There it is; trust as the bedrock of a culture of accountability in any office. Try applying these simple ideas and watch your staff step up, do more and achieve goals, together.
I recently had the opportunity to visit with Adam Schwartz, the president of The Cooperative Way, a consulting firm that works with cooperatives on their principles and values. Schwartz has worked with numerous cooperatives in multiple sectors, including credit unions.Below is our Q&A.
(1) In today’s modern world, how can financial cooperatives stay relevant?
Relevance is determined by action. Those credit unions that align their interests with those of the members will thrive. The others will eventually fade away as consumers discover there are other options and there is
a cooperative difference.
(2) Does the co-op nature of credit unions
matter to consumers and how can credit unions leverage their cooperative
structure in their marketing efforts?
One of my favorite sayings is: “If you’ve seen one co-op,you’ve seen one co-op.” It is our greatest strength that we are nimble enough to respond to the needs of the community we serve. It can also be a great weakness if we fail to collaborate together. If we promote the fact that credit unions are cooperatives, and live up to the seven cooperative principles and values, it will matter to the consumer.
(3) You talk about the “Seven Steps to Reenergize the Cooperative Culture.” What are those seven steps?
1) Understand it—really know what it means to be a cooperative.
2) Believe it—feel that this the best business model on earth.
3) Create it—work to ensure others feel the same way.
4) Measure it—what gets measured gets done.
5) Manage it—the act(s) of demonstrating your cooperative structure.
6) Market it—it starts with you, then employees, board, members & future members.
7) Sustain it—deploying the systems that will make it last.
(4) How can co-ops from other sectors work with
I would also ask how can credit unions work with other co-ops? Credit unions have a product every co-op business needs—money. CUs need to ensure their policies permit loans to other types of co-ops. Other co-ops need to think credit union first before doing business with other financial institutions. It is a two-way effort.
(5) Should credit unions make being a cooperative a central component of their marketing strategy and brand differentiation?
Absolutely! Rates will go up and down, banks will always out advertise us, always have the newest gadget.
Treating your member owners as member owners will create long term value. Treat them well and they will tell
others, treat them like a bank and they will tell more people.
(6) What is the Cooperative Way and how can you
help credit unions?
It is a consulting firm that works exclusively with cooperatives and their support organizations to help them succeed through using the cooperative principles and values. During my career I have worked with cooperatives from every sector from agriculture, housing, food, purchasing, utilities, worker and credit unions. By taking the best practices from the different sectors and seeking to find ways to partner we improve all co-ops and grow the cooperative economy. My website: www.thecooperativeway.coop My Blog is www.coopcommonwealth.com (this is a shared blog with two other cooperators from different sectors and generations).
As we approach the end of 2012, most financial institutions are already focused on 2013 and their goals for making next year successful. Both credit unions and banks have more than likely crafted their strategic plans.
But is your strategic plan really strategic?
My guess is much of your strategic plan is actually tactical in nature. During planning sessions, we spell out our overall goals, our action steps for accomplishing those objectives and our timelines for making it happen. Those are all critical steps to take—but they are tactical.
Because we live an incredibly fast paced world, the financial services industry is changing at a rapid pace. That makes planning beyond a year extremely difficult. However despite the ever changing landscape, credit unions
and banks must examine where they are going in the next three to five years (and not just next year) with their strategic plan.
How can we do that? Here are 10 suggestions:
- Develop a strategic initiative that you know will take longer than a year to accomplish.
- Identify a target market you currently are not reaching but know you should.
- Craft your facilities strategy (if you think facilities are indeed the way to go strategically).
- Determine how to align your brand, your culture and your staff.
- Develop your value proposition and ask if it is relevant for the future.
- Examine the payment systems trends and develop a strategy for its evolution.
- Read Bank 2.0 and Bank 3.0 and discuss its implications.
- Answer the question, “what do we want to look like in five years?”
- Create products and services that will resonate with the under-30 demographic.
- Review your organizational chart and examine if you have devoted resources in the proper areas in order to achieve your desired growth.
Implementing those suggestions alone won’t make your plan more strategic—but it does get you started on the right path. The best way to make your plan more strategic is to change your mindset. Don’t think tactically and
next year—think strategically and long-term.
A part of your strategic plan does indeed need to focus on the tactical items for next year. But as we make those 2013 action steps, let’s also make sure we are moving our financial institution in the right strategic direction for many more years to come.
Payment systems are rapidly changing to meet evolving technology and consumer demand. In a recent white paper (Payment Systems: Their Strategic Role in Credit Unions) now available for download through Synergent Technology Services, we explore the world of payment systems and what it means to credit unions.
Payment systems are not a tactical issue your credit union faces—it is strategic in nature. Ron Shevlin, Senior Analyst with Aite Group, concurs, saying, “As far as a payment systems strategic role, credit unions must now look long-term.”
Payment systems represent a dynamic and fluid world in which the way consumers pay for anything from concert
tickets to their monthly electric bill is relentlessly evolving. Credit unions ignore this assault on their typical business model at their own peril.
For payment systems to work well and be a true member benefit, they must run smoothly and refrain from sapping too much staff time and energy. Executed properly and as part of a strategic role, payment systems represent an area for credit unions to maintain near constant contact with their members. Done poorly, payment systems could represent the downfall of an otherwise sound member service strategy.
A recent comScore estimate indicates over 100 million American consumers own and use a smart phone. As a Credit Union Magazine
article points out, it all boils down to the digitization of financial transactions. “And like other industries transformed by similar digital trends (travel agencies, music publishing, book publishing, etc.), financial firms
should be concerned about payments.”
The white paper covers in detail the following topics:
- What Strategic Role Does a Payment System Play in a Credit Union?
- How Can Credit Unions Incorporate Payment Systems into their Strategic Plans?
- How Might Payment System Trends Alter the Credit Union Business Model?
- Choosing a Payment Systems Vendor
- How Can Credit Unions Stay Ahead of the Payment Systems Technology Curve?
- How Might Consumer Payment Systems Behavior Change in the Near-Term?
Check out the white paper for more details.