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VIEWPOINT: Key Elements of a Successful Credit-Union Strategy for 2024

By Jeff Paille


Strategy is a big word. It has different meanings for different people. Most credit unions have a strategy, or at least something they refer to as a strategy. Some think of a strategic plan as a document that is produced in a nice binder and goes on a shelf. Others think of a plan with metrics that are measured every so often to chart progress toward goals. 

It is likely that your credit union has revisited strategy a number of times in recent years. The disruption of COVID led to significant changes in approach, different considerations of risk, and unexpected opportunities in 2020. The last three years have continuously brought challenges that require strategic response, including embracing new ways to interact with members, challenges related to too much liquidity (then later too little liquidity), personnel management in a tight job market, on-going cybersecurity threats and risks, and a host of others. Whether you updated the documents in your strategy binder or not, you no doubt adjusted your credit union’s strategy. 

Emerging from the COVID disruption has included a series of fast-paced changes. The changes themselves are important but even more critical is the pace of change. Has your credit union kept up? How do you compare to other financial institutions? Are you able to assess your strategic positioning and shift strategy as circumstances change?

Often, the biggest question posed by credit-union leaders is regarding what topics a credit union should strategize about. Or what the future will hold in terms of interest rates, inflation, etc. However, before you get into specific strategic topics, and before there is an attempt to execute a strategy, you need to think about how you “do” strategy. 

To get started, there are three factors that are seen more often in high performing credit unions and not as often in credit unions that are not as high performing. Furthermore, these characteristics tend to indicate higher performance regardless of the credit union’s strategic objectives or initiatives. The three factors are:

1. Relentless Execution. High performing credit unions likely have both strategy components of a nicely put together strategy document and quantitative metrics against which progress is measured. But the reason they are high performing is that they consistently embrace the strategy as an integral part of everyday operations. 

Most often, successful strategy is one or two “big” decisions followed by relentless day-to-day execution. It’s almost more of an attitude. Think: “We’re doing this. Everyday. All the time.” 

There is a strong temptation to “do” strategy and put the nice document on a shelf for occasional admiration. Check it off the list and be “done.” Giving in to this temptation dooms your organization to continue doing what it’s been doing, the way it’s been doing it, and renders the strategic thought worthless as it will not convert to strategic action.

High performing credit unions emphasize the need to change behavior. This includes consistent communication about what you’re trying to do and why. It includes pointing out what behavior is expected and calling out when that behavior is not happening. 

This is not easy. This is why high performing credit unions look different than the rest of the bunch. 

2. Agility. High performing credit unions are organized in a manner that allows them to gather information effectively, evaluate that information, consider stakeholder input, make decisions, and execute. 

Think about March 2020. Like just about every organization of any kind, your credit union probably made decisions to change procedures and practices incredibly quickly. You had no choice at that time. You just did it. Now that we’re three-plus years removed from that disruption, do you decide and execute with a sense of urgency and importance, or are you more casual about it?

High performing credit unions have embraced the idea that decision-making, even for big decisions, doesn’t have to be a long, drawn-out process. Some credit unions used to make strategic decisions with multiple board-meeting presentations and discussions over a series of months. Some of those credit unions have moved to a quicker process designed around committee work and fewer board discussions. This hasn’t diminished the role of the board. If anything, board members who participate in the committee work are more engaged than they were before.

The pace of change is simply too fast in the current environment to allow your credit union’s tradition or some pre-set board meeting schedule to force you to wait to make a strategic move.

3. Focus on People. A lot of strategy discussions, and strategy documents, have a lot of content in the form of facts and figures. Even more often, they have numbers and graphs focused on predicting the future. What’s going to happen with interest rates? Is there going to be a recession? etc.

High performing credit unions think about those things too, but they roll out a strategy that focuses on the people. Most often, the people in this context are the credit union’s employees. What impact does this strategy have on employees? To the extent employees must change their behavior, is credit-union leadership preparing all personnel for that change? Are you communicating the “why” effectively? Are you making it matter to the individuals who will actually execute the strategy?

This must go well beyond handing out a sharp-looking strategy document or making an announcement at a staff meeting. And it must be consistently part of every communication with all personnel, not just the leadership team. High performing credit unions celebrate the strategy as something that makes the credit union a great place to be. They include elements specifically related to the strategy in every person’s performance objectives and goals, and evaluate people in all roles against those expectations.

There are a lot of specific strategic topics with which credit unions must deal in the current environment. But regardless of your credit union’s specific strategy elements, how you formulate and roll out the strategy is what ultimately determines that strategy’s success. There is a huge opportunity to move your credit union forward in a high-performing manner.    

Jeff Paille is a partner at The Bonadio Group accounting and consulting firm. He is focused on serving credit unions and tax-exempt organizations.