Strategic Planning - is it different for credit unions?

How is strategic planning different at a credit union? First, let's look at the basic definition of strategic planning. Strategic planning is the planned, focused use of resources to optimize an organization's viability - whether that's profitability, survivability or growth-ability. In a credit union, all of these may be important to the membership. Profitability leads to greater financial soundness of the organization. Survivability is almost always desirable for members. And growth can also have important effects on the efficiency of the organization.

We need to remember that credit unions, as member governed organizations, also need to serve the membership in ways other than simple financial performance. The credit union, after all, exists to provide financial services to its members, ideally serving them better in some ways than alternative financial institutions. While this adds a dimension to strategic planning in a credit union that you won't see in, perhaps, a shoe store, it doesn't have as much effect on good strategy as you might think. After all, a shoe store that doesn't serve its customers well is going to have a hard time making money, and (in general) poor service is a poor strategy. The main difference is in the reason for serving members or customers well. A credit union serves its members well because it is - at least in part - created to do so. A store serves customers well because it leads to greater profitability.

How will this affect strategy? There are trade-offs between profit and service that may come up in your strategic planning. In a typical for-profit business, those trade-offs will be weighed differently than in a credit union. Providing better value to members in the form of service can - and should - be much more prevalent in credit unions because such service has a direct, inherent value to the organization that exists only indirectly (through increased customer loyalty and profitability) in other businesses.

(Robert)