Every summer, credit unions gear up for annual strategic planning processes that result in new financial targets and budgets by the fall. These planning exercises result in the creation of lofty goals that often go unrealized years later. With an extended low rate environment, weakening economic fundamentals and continued regulatory burden, credit unions will need more than bright-eyed optimism to succeed in 2017.
As the financial services industry becomes more dependent on niched knowledge, digital delivery and leveraging customer information, credit unions must recognize that the disciplines of design and organizational development are equally important to the strategy process. The strategy process must identify the "what" and "how" in regard to the organization's future.
For most credit union professionals who began their careers in finance, lending or branch operations, the discipline of design is a foreign concept. Yet, looking at the success of technology companies such as Apple and Google or retailers like Amazon or Target, it's clear that value is created when companies take an obsessive, user-centered approach to their businesses. Most credit unions have strategic goals to grow lending, improve member loyalty and drive greater operating efficiencies, but high-performing credit unions are better at boiling strategic goals down into the design of new organizational solutions to support these objectives. For instance, a large credit union with the goal of increasing mortgage production undertook an extensive review of its end-to-end digital lending experience that resulted in more than 20 specific process improvements. The credit union employed a formal journey mapping process to ensure that the experience was not driven by compliance or back-o ffice preferences but by what was important to the member. With these improvements in mind, the institution began to experience 50% greater mortgage production.
Credit unions should ensure that this year's planning efforts are supported by the identification of specific design initiatives related to delivery channels, product development, member experience and process improvement that can have a high impact on the credit union.
In addition to design, a key variable in any credit union's strategic success rests in the operating culture that is charged with execution. Put bluntly, many credit unions fail to realize their strategic visions because they aren't developing the technical skills and leadership competencies to execute. In other cases, the board and executive team simply have not drilled down enough ownership for execution among middle managers and staff. One high performing credit union identified its highest strategic priority around developing leaders within its organization. This credit union formally defined leadership success factors and burned this framework into all of its recruiting, development, and performance management and compensation strategies.
Another credit union that placed a high priority on providing consultative advice to its members developed a formal written test in regard to products and services that every employee in the organization completes annually. This credit union proved the correlation between product knowledge and member engagement. These two examples highlight the fact that credit union organizational development must be formal, hard-nosed and intentional to truly support the ambitious visions that come from strategic planning.
Credit unions looking to succeed in a tough financial services environment in 2017 need to bolster their discipline around strategic execution. An energetic focus on stronger member experience and process design coupled with a much more deliberate approach to talent management and organizational development will go a long way in turning summertime strategic visions into 2017 performance achievements.
Steve Williams is principal at Cornerstone Advisors. He can be reached at 480-663-2181 or email@example.com.
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