Special for our readers!

Russell and I would very much like to get a couple more credit union strategic plans done in the next couple of months...if you have a CU that would like to do strategic planning AND are willing to meet in Orlando before June 30, you can have a PROFESSIONALLY facilitated strategic planning meeting with a real strategist - not just some facilitator who does strategic planning.

As a special incentive for readers of this blog (only!), I'll do your meeting for $3,000 if you confirm on of my special dates with me by April 1st. Call my office at 734-665-2971 to get this special deal - it will NOT be extended!

SWOT analysis - a practical approach

People make a lot of the SWOT analysis in strategic planning. As a rudimentary approach to thinking about strategy, the SWOT works pretty well. Decades of experience has shown us that great strategy requires much more focus on strengths and opportunities.

How do you figure out your strengths? There are many approaches to researching this – from member and employee focus groups to analysis by outside consultants. Our preference, for the credit union strategic plan, is to start with the opinions of your management team. After all, they are the people who have to live with your strengths – and weaknesses – day in and day out. In addition, the team itself will ultimately learn to exercise its wisdom in this reflective process.

Be sure you cover strengths (and weaknesses, if you feel they are important) in the most strategically critical areas: leadership, corporate culture, human resources and structure. While these are all pretty “fuzzy” areas to analyze, they have a great impact on your success or failure in strategy, and so you should take this chance to assess them and understand how they contribute to your success.

Knowing where your strengths are can give you a big advantage when setting strategy – you will know where you have the greatest chance of beating your competition, and can set your course accordingly.

In the meeting, when you list your strengths and weaknesses, ask each team member to identify at least one of each – and no more than two or three of each. You should allocate about an hour to the process of identifying and then rating the capabilities of your organization. A 9-point scale (see inset) should be used for rating each capability on importance and your own performance. Obviously, in any situation where you consider a capability to be critical and your own performance is either excellent or poor, further consideration and discussion may be desirable.

Strategic Planning for Credit Unions - Keeping up Momentum

Last week I spoke with a member of a credit union management team that I’d worked with doing strategic planning a few years back. We got along well, and I thought the team came up with a great strategy for growing their credit union. She mentioned that there was a new CEO, and that the CEO I had worked with left the credit union about two years ago.

When I asked how the strategic plan was working for the credit union, I was a bit disappointed to find that nothing had been done with strategic planning since the old CEO left. Once again, the credit union’s strategic planning had fallen back into the old model – a brief weekend retreat with the board where strategy is discussed vaguely but with little input (or support) from the management team. Naturally, the credit union had done well with its intitial thrust with our strategies – but I sensed that they have also reached a new plateau and were wondering where to go next.

Dropping the ball with strategic planning – or going back to the less-effective “board retreat” model – may look like a good idea at the time. After all, you will save time and money, and the impact on the organization may take years to become noticeable. Rest assured, however, that – from the outside – it is usually very apparent to me when a credit union is moving forward and when it is just treading water, waiting to be steamrollered by the next unforeseen event in the credit union market. Which kind of credit union do you want to be?

Who Should NOT Be On My Team?

There are some people you may be tempted to put on your strategic planning team who should not be there. This is not because they wouldn’t add some valuable input, but rather, it is because their role (or roles) call for a different relationship with the strategic planning process.

One of the trickiest people to include - or exclude - from you strategic planning is board members. There are some good reasons to have a SHORT strategic planning session with the board. After all, the overall governance of the organization is the board’s responsibility. That being said, most board members have little (if any) relationship to the day-to-day operation of the credit union. What this means, in practical terms, is that board members will not likely have as much information about member behavior as the active management team – and their commitment, while crucial, will not actually cause the real nuts-and-bolts implementation of the plan. I discuss some of the reasoning behind who should and should not be on the team in my earlier strategic planning book, "Simplified Strategic Planning".

What we recommend for board involvement in strategic planning is pretty simple. In between meeting one and meeting two of the process, you should plan to have a board retreat (typically one or two days) where you review the existing data (the worksheets from sections 1-4 will mostly be done by this point – and they are perfect for this) and discuss a set number of issues that will require board discussion. A good idea for this short meeting is for the CEO to canvas the board well before the meeting and create the list of issues himself, possibly in conjunction with the strategic planning team leader. This approach will give the board ample opportunity to provide input to the second strategic planning meeting, where the strategies, goals and objectives will be further refined in order to drive implementation.

Bite Off Only What You Can Chew

In recent strategic planning sessions I've witnessed overly exuberant staffs and boards review a list of goals and objectives they had on prior strategic planning documents. Be careful not to try to overload your organization with too many goals and objectives, because too many of them will be given a less than desirable effort simply in order to check it off the list.

Depending on the size of the credit union, what has recently transpired, or will be forthcoming should be taken into account on strategic planning focus. One client had a terrible situation of executive theft which lead to extensive firings and court cases not to mention, the loss of revenue and write offs for "friend" loans. Another client is pondering a merger and being acquired. These are significant strategic items that need complete focus and a check of where are we now and where will we be in 12 months.

I fully endorse a multi-year strategic plan and focus unless so much is dramatically going to change within the next few months it's hard to imagine have a healthy plan with many goals and objectives until the big issue becomes resolved.

If your credit union is comfortable in your locations, have solid reviews and feel properly position to attack member, asset and loan growth, then this is the time for multi-year focus and aggressive goals and objectives. However, still keep in mind too many projects will not get done properly in a timely manner because the available resources of time and talent of your executives can only be spread so far.

If you are a credit union that isn’t as comfortable as the aforementioned one, you still have a great need for a focused plan to build on the strengths you have in the marketplace. The focus on only a few items to dramatically improve will serve your members better and your team will be able to generate greater success.

-- Russell

Giving the Credit Union Direction

Strategic planning is a key tool for putting direction into the management of your credit union. While it is possible for a credit union to survive by focusing on operational excellence in areas like customer service and marketing, you will seldom see a credit union truly thrive without a clearly defined strategy. Strategic planning is a process that requires you to define the future direction of your organization. Without such a direction, you are likely to find your credit union drifting – staying afloat, possibly, but not really going anywhere. In strategic planning, we ask the question “Where do we want to go?”

We answer this big question by addressing the truly strategic issues in your business. Ultimately, these issues revolve around three more specific questions:

-What will we sell?

-To whom will we sell it?

-How do we beat (or better, avoid) competition?

At first blush, these questions may seem easy to answer. In reailty, many of the strategic issues you face as a credit union can be boiled down to one of these three, basic questions. For example, the easy answer to "what will we sell?" is "personal financial services". But how well does your credit union provide all of these services? Many credit unions will struggle to provide "one stop shopping" to their members - and then face escalating costs as they are required to add infrastructure which is only fractionally used. Perhaps there are some services we should provide - and others we should simply make available to our members through a strategic alliance with another organization? Which services should be self-performed - and which should be outsourced - is a truly strategic question for many credit unions.

From the Branch: It's Quiz Time

How well does your staff know your products and services? A client has been reviewing a series of products with his staff so they can better cross sell them. I put them to the test. I put the employees in small groups and asked them to list the five products they had reviewed and what the main features and benefits of each were.

The groups struggled a bit and they decided to go get the manual. I stopped them right there. If you are going to serve your members at your strategic best, the information needs to be well known and not recited from a manual.

It takes too much time, seems too insincere, and it becomes selling for the sake of the sale and not for the sake of helping out the member with a financial need.

When all employees understand the most important products that fit the strategic focus of the credit union, and fully understand the benefits and features of those products, then the credit union has a defined message, member approach, and can really focus on what the strategic competency is.

Test your staff. Take your best selling five products and ask them to list the benefits (what the members get out of using the product) and features (what the product does for the member) from memory. No notes needed. This will give you some insight to your sales process, your strategic focus on the front lines, and how well you are serving your member's financial needs daily.

-- Russell

Strategic Planning - The Role of Culture

Quite a few executives I’ve met would prefer to treat strategic planning as an inorganic black box that, given certain inputs, flawlessly produces expected outputs. Many people who think this way about strategic planning are otherwise brilliant people with strong quantitative backgrounds – which probably explains the tendency to want to treat management as an engineering problem. Now, to be sure, we can often benefit from the objective treatment of our strategic issues as dynamic systems to be tinkered with, but we must never forget that our strategies, in the end, rely upon the behavior of people.

People are wonderful – at their best, bright, creative, and thoughtful. People are also unpredictable, and in groups, their behavior is rarely as manageable as we would like. Within any organization, employee culture can be either and asset or a hindrance to strategy – so it’s very useful to look at steps we can take to create a culture that works with our strategy, rather than against it.

-Robert

5 Choices for Market Segment

Market segments fall into categories such as cash cow, dog, star, etc. Once you’ve identified where your market falls in these categories, you have five different options in taking action. Not every market you are currently involved in should have a strategy to grow and expand, in fact, some markets after close analysis might be best to completely leave. Select one market segment you currently serve and decide which of the following approaches you want to take.

1. Expand

Analysis of the selected market segments indicates this market has great net income growth potential, or could be an under served area with minimal competition. When you decide to expand you want to take an aggressive approach to market share growth and penetration. Expansion in a market means you want to grow your share of the market more so than the growth of the market itself. For example, your market share for this exercise is college students for the university you serve. You have determined that there is great opportunity to grow in good income generating products in this market even though the student enrollment at the university is expected to be stable. The market itself is not growing significantly, but your presence and number of members served can expand significantly.

2. Maintain
   

Maintaining market share does not mean ignore it and hope everything stays the same. In fact, market share maintenance might take a vigorous defense strategy if a new competitor has entered the market, if the market segment is shrinking, or if due to lack of effort in previous years your name in the market place isn’t top in the minds of the members. The goal for this approach is to expect to hold steady the current position in the market and at least grow at the same pace as the market is growing.

3. Contract
   

Credit unions at times offer products and services with minimal benefits to the credit union or the membership as a whole. To contract would be to shrink product offerings yet maintaining more profitable products and services while increasing new income from the market. Selectively eliminating those products and serves is a scaling back yet still growing in net income.

4. Milk
   

To milk a market segment is to say you have reached your maximum growth potential, have a solid return on your investment in serving the market and you simply want to have minimal investment of resources while continuing to maximize your returns. Some markets that have been served for a long time and are going through the maturing process are best served by milking.

5. Withdraw
   

Withdrawing from a market is exactly what you think; pulling away completely over a period of time. If you are involved in a market that no longer fits your credit union profile, has no growth potential, or is shrinking fast then the best strategy is to look in a different area and begin the process of getting out. Credit unions are not required to go down with the ship, so to speak, and it is the wise leader who knows when its time to make a choice to withdraw before any significant damage is done to the credit union.

-- Russell

Strategic Planning - Process Leadership Checklist

These are the things I think you need to have in place before you start your first strategic planning meeting. Keep in mind that the Simplified Strategic Planning process is structured to require a minimum of preparation, so you may need much more preparation if you are attempting another approach to strategic planning.

First, you must have commitment. There are 3 areas where this is crucial: number one, the CEO or president must be committed to support the process and the implementation of the resulting plan. Secondly, the management team also needs to commit to support the process and implementation, and third, both groups - especially the CEO - need to commit to participation in the meetings following a pre-set schedule.

After commitment, you need to prepare your team. Number one, you need to make sure you have the right people selected for your team. Number two, you must assure that the team is adequately trained to participate in strategic planning (although this may be less important if you are using an outside facilitator who is also able to train the team). Thirdly, you need to select a team leader. This person will have different roles, depending upon whether you use an outside facilitator to run your planning meetings.

Once your team is prepared, you need to arrange for your meetings. This includes setting dates and assuring that everyone on the team can attend on the dates you have chosen. Also, you will want to arrange for meeting space, which should be away from your offices and branches, to help separate the team's thinking from day-to-day tactical issues. Finally, you need to assure that the appropriate materials will be at the meeting site - flipcharts, projectors, books, worksheets, and anything else you feel you might need to conduct a good strategic planning meeting.

So here is the basic checklist, in outline form:

Get Commitment
-CEO commitment
-Team commitment
-Participation commitments
Prepare Team
-Select strategic planning team
-Train strategic planning team
-Select strategic planning team leader
Arrange meetings
-Set dates
-Arrange location
-Arrange for materials

-Robert

Beware of Bright Shiny Objects

On a recent board retreat we found it difficult to stay on task as it was easy for certain board members to get distracted. We would be discussing a topic of importance and in the middle of a comment a board member looking outside would suddenly say “Look a fish just jumped out of the water!” And, this was the person who actually had the floor before he was distracted.

We joked that he is easily distracted by bright shiny objects. So are credit unions executives and boards.

Credit unions executives and volunteers some times forget about the credit union’s strategic competencies and see a service or ad campaign or unique approach a competitor is using in the marketplace and they want to do it as well.

Bright shiny objects (BSO) are those things that distract you from your strategic focus, that take your drive in a different direction from the vision, that consume time that could be better used elsewhere.

The BSO effect happens even more so that we are all becoming somewhat afflicted with Attention Deficit Disorder (ADD). A common practice in credit unions with BSO syndrome is to constantly be adding products, finding the new and unique marketing campaigns regardless of the branding of the credit union, and anytime a competitor adds a new service then we have to add that same new service. This diffuses efforts and focus and makes the credit union get away from whatever it is they do best in the marketplace.

I’m not saying never shift your product mix, I’m saying be sure it fits what you do best before chasing a BSO.

Strategic planning retreats are rife with BSOs. Most retreats are at nice places, with ancillary activities planned for the good time factor we feel we owe our volunteers. The problem with this set up is that most executives and boards are being distracted by the beach, the golf course, the fishing charter, shopping trips and what is happening out the window rather than focusing on the focus of strategic planning.

On one retreat a body builder competition was in town and guys in skimpy Speedo-type clothes we doing a pose down for pictures outside our windows. The meeting came to an abrupt halt, we lost momentum, and the BSO factor was high!

In your planning process be careful not to be distracted by what all services and products you can offer just because either they sound cool or the competition is offering them. Stay focused.

On your board planning retreats work to minimize the BSO factor so people are truly engaged in the discussion and know how important their focused energy is to making the credit union develop along its strategic competency.

-- Russell

Competition and Strategic Planning

Competition is one of those things that makes strategic planning tricky. Without competition, we could set a strategy to get members and know it would work. But all potential members have a plethora of choices for their financial service needs. What this means for you, as a credit union manager, is that all members - and potential members - will evaulate your offerings in the light of competing possibilities. These possibilities may be other credit unions, banks, or, indeed any institution offering financial services.

Let's take a look at why this will affect your strategies. Let's say you design your offerings, based on extensive (and perhaps expensive!) consumer research, to appeal to the average member. In a competition-free market, this is an excellent choice - your advertising will hit home, market penetration will increase, and your members will be happy.

In any market with competition, however, this strategy may lead to deteriorating financial performance. Why? Because competing institutions are likely to pursue the exact same approach - and have a similar appeal to members and potential members. When a potential member sees advertising, for example, from two different institutions that have the same appeal, his or her choices will be driven by other factors. If you and your competitor are both selling great service, this person may choose to join your credit union because you spent more on advertising, or maybe he will choose your competitor because their rates are lower. The problem, of course, is that almost any reason this potential customer may have for choosing your credit union is going to cost you - and your members - money.

Let's look at this same market, but instead of having two institutions promoting service, let's say you promote greater convenience. If everything else is equal - you spend the same amount on development, advertising, etc., and have the same rates and fees, some potential members will join your credit union because of convenience - and other will join your competitor, because of service. The service-oriented member will prefer your competitor, while the convenience-oriented member will prefer you. This is a much better situation, because you will not be forced to out-spend your competitor in any area - other than convenience. Strangely, consumers tend to prefer this scenario, because it offers them clear, believable choices.

Obviously, this is an oversimplified situation, and naturally, all members want both service and convenience (and great rates, promotions, relationships and a ton of other things!). But there is a very important lesson in this example: you will have lower costs and better performance if you use your strategic planning to be where your competition isn't. The corollary is also true: the more your strategy looks like a competitor's, the less money you will make.

-Robert

Action Plans: The Work of Successful Plans

The strategic planning document has been written, the vision established and the mission statement agreed upon; now its time for the work to happen. It's easy to understand a vision, objectives and goals, but the real meaning of a strategic plan, the part that determines whether the plan is a success or not, is how it is implemented. And, this is where most plans fall apart.

Research shows that American businesses typically meet one third of their objectives in a strategic plan. Adding in action plans to the strategic planning process increases that accomplishment rate to about 60%; however, if you closely follow the strategic planning process being outlined here and utilize the implementation process being layout out, you should achieve 80% to 90% of your quality, service, financial and strategic objectives.

The action plan should be no longer than two pages in length with fewer than 30 action steps. The heading of the plan should have the full description of the objective, date of last revision and list all parties involved in the action plan. This is mapping out the road to success for this objective. If you have 6 objectives you will have 6 action plans. The worksheet of the action plan should be divided into columns like a spread sheet. Each column should be clearly labeled. Such as, Action number, Priority, Action step description, Who is involved, Estimated time to complete this step, Money, Starting date, and Completion date.

Be sure action steps don't turn into on-going activities. A step has a beginning and an end and moves the objective forward. Be concise. Instead of saying "monitoring drive thru wait time" write "establish drive thru wait time monitoring system."

Everyone has a full plate of work and adding a full set of action plans and a list of action steps can appear to be daunting and they frequently get shuffled down the priority list. By using an action plan system, it is the best way to incorporate this body of work seamlessly into daily activities. Thus, making it more likely items will stay on course and actually get done properly and on time.

-- Russell

Be Sure Your Strategies are Supported by Commitments

A credit union wants to take on an aggressive approach on targeting marketing toward the teachers in their membership (a large market segment.) The marketing people work up a campaign, begin verbally designing ads for print and other media, and then they find the board has trimmed their marketing budget to unusable levels for any type of meaningful campaign.

The year hasn't even started and spirits are dampened and an opportunity is lost. Sound familiar? Strategies are not just good ideas and wishful thinking. They are components of a well-planning and established vision that needs the proper financial support and commitment.

Another commitment needed by all portions of a strategic plan is the commitment to make it happen. I've worked with credit unions that have a great planning document and it rarely gets looked at again until the next planning retreat approaches. This is a bad idea and a waste of time. The plan must have the commitment of those responsible for getting things done and executives actually taking on the action plans as a meaningful part of their daily work program.

College football teams like to start with a first game patsy, to get off on the right foot with a convincing win, build some confidence and gather momentum in necessary commitments for when the tough opponents come to play.

The same approach can be used when building commitments to your planning process. Start with the easy victories first. Demonstrate progress by accomplishing action plans and showing quick results. This gathers momentum for the staff to support and make commitments to the plan, the board seeing success and progress becomes easier on the financials as long as they know good progress (winning) is happening.

What are the easy victories? Small projects and visible projects are the best early wins. One credit union client wanted a new marquis that was programmable and had lots of active motion as an attention getter. The board approved it and it was quickly purchased and installed. As a "test" of the programming the first couple of days ran a scroll of a thank you to the board for their foresight to approve the project. The marquis was a piece of a larger marketing initiative to be more visible. Did thanking the board the first day help? It didn't hurt at all!

Commitments from the board and executive team for the proper funding and the proper work output is critical to giving your strategic plan a fighting chance for victory.

-- Russell

Why should your strategic plan be written by a team?

There are just two key concepts that make the team the best way to create a strategic plan: input and commitment. The people who create the plan should be the people whose functions in the credit union give them the best perspective to give quality input to the strategic planning process - and they should be the people whose commitment to the resulting plan will be most critical to its success.

What this means, in simple terms, is that you want to involve people who have day-to-day management responsibilities in three areas of your credit union: sales/marketing, operations, and finance. Specifically, I'd suggest considering the following people for your strategic planning team:

-CEO (always)
-Business Development
-CFO/controller
-IT
-Human resources
-Member relations

While this is not an exhaustive list, it's a pretty good starting point. For reasons of creating good group dynamics, we've found that the ideal strategic planning team is made up of 5-10 people, so you will probably choose to have one or two more or less than the suggested titles above.

You probably have also noted that we did NOT list the board members. The board should have a strategic planning meeting - but its purpose should be to digest the plan created by the management staff and make suggestions to the CEO on how best to implement the strategic. In my experience, board-generated strategic plans inevitably flounder because they lack the two key elements - input and commitment - that should be required of every participant in your planning team.

-Robert

What is Your Strategic Focus?

The key word here is focus. Ever work with an organization that seemed scattered and each day felt like you were heading a new direction? This is not uncommon in the knee-jerk reaction times we see today in business and in credit unions. Sometimes we forget, it is possible to very good at one thing if you stay focused on it.

A friend of mine was a phys. Ed. teaching in an elementary school and he put the entire class on one side of a tug of war rope, and he stood on the other side. He thought he’d have fun and play with the kids pulling against him before finally winning with a good pull. Much to his surprise the kids were very focused on winning and with each of them pulling with focus he couldn’t beat them! The same goes for credit unions, when we focus and have a team that is focused we can beat a much bigger opponent.

In credit unions we win by gathering talent, focus and intensity to an issue critical to members, and do it better than anyone else in the market. This is how to become a specialist in certain areas and escape from the commodity mentality. Just matching the competition leaves members to select their financial institution based on rates alone and this takes away net income and dilutes any loyalty we want to build in our members.

Two important questions to be answered when establishing your focus will guide your management team on where the credit union needs to be heading and focusing.

What do you sell? Who are your targeted members or prospective members?

By taking the time to delve deeply into these questions you will find the focus you need to be taking as you plan out your strategies.

-- Russell

Who are the Competition and How Do They Impact Us?

You are not alone. You have competition all around you. Some you readily recognize and some you may have forgotten about, or not even known about. A common mistake among credit unions over the last ten years has been to try and copy the competition and offer the same products and services they do. You want members and prospective members to find a reason other than low fees and better rates for choosing you as their primary financial institutions.

You want to understand competitive strengths and weaknesses, and a solid knowledge of other factors affecting the business environment at a national, state and local level. Figuring out the competition is knowing where to avoid stepping toe to toe in their strengths and exploiting their weaknesses. It’s all in how you want to position your credit union. In some cases you will attract members because they prefer you and where you’ve positioned yourself; on the other hand, you may also drive some members away. Both results are ultimately good for everyone involved.

Right now the market is becoming even more volatile than ever before. Mortgage companies are going out of business, and the credit market is shifting causing all kinds of ripples for credit union executives to be in tuned to. As this situation continues to shake out and foreclosures and bankruptcies level off, everyone is going to be looking for the opportunities that have opened up in this shifting landscape. In some cases this will level the playing field and provide a short-term window of opportunity. Be ready! The more you understand your competition and the climate of the financial world, the less energy you will have to expend and the greater the opportunity to grow market share will be.

Information is power and that has never been more true than in the strategic planning process. You need good reliable information in order to win the battle for market share and membership growth.

-- Russell

Assumptions Are a Necessary Part of the Planning Process

Assumptions are temporary estimates about some probable future event or development over which you have no particular control. When you make an investment in a stock you assume it is going to give you a positive return. Maybe you based that assumption on the historical track record of that stock. Maybe you based that assumption on a reliable tipster. Either way you are making an assumption about the future.

Some assumptions are as easy as assuming the sun will rise in the morning and others are as complex as predicting the economic outlook for the next ten years. If it is so difficult to make accurate assumptions, why even bother? Because assumptions are necessary for a good plan, and better assumptions make a better plan.

In credit unions you have to make assumptions of future trends in order to prepare for those trends now. Because the credit union industry is changing so rapidly some credit unions are choosing not to make any assumptions and maintain the status quo, each year refreshing the same game plan over and over without making any significant changes. This doesn’t solve their problems and leaves them exposed for a number of negative possibilities.

Assumptions built on experience, awareness and research are the guide for actions and strategic initiatives. For example, if the mortgage lending environment is becoming quite restrictive, how will that impact your loan growth and delinquency rates over the next 18 months? How should you shift your actions today to prepare for those assumptions becoming a reality?

Wishful thinking is different from assumptions. A CEO can be so excited about the new branch he is building that he is convinced everyone in the area will leave their current bank to come to his beautiful new branch. When confronted with the response by the competition who are vigorously working harder to retain their customers, only then does he realize he was thinking more along the lines of wishful thinking that a proper assumption of the situation.

Drill down into the details when making assumptions. Proper assumptions are based on solid facts. The deeper you get into the details your instinct and historical information will form a clearer assumption of future activities.

-- Russell

Define Your Strategic Competency

A strategic competency is rarely if ever a single thing. It is usually a mix of three elements:

Skills: A skill is any manual or mental activities that result from talent, training or practice.

Process: A process is any manual or mental systematic series of actions that are directed toward some end. Include any significant "know-how" resident in your credit union.

Knowledge: Knowledge includes any information, data, or understanding of facts, or principles resident in your credit union.

A strategic competency must be strategic in nature. For example, if you are the best at how to hold an employee birthday celebration, it doesn’t have much strategic value, because such celebrations are not going to directly improve your relationship to your members, or your competition.

A strategic competency is something that can be used over a long period of time, and it usually knowledge based. It is something that should elevate you above the industry norms and provide an advantage in the marketplace.

A strategic competency must pass four specific tests:

Is it a combination of skills, process and knowledge?
Does it differentiate the credit union from the competition?
Does it create strong value for the member?
Is it difficult to copy?

If you don’t get a resounding "yes" to each of these questions, you should be skeptical that you have a strategic competency.

-- Russell

Why Do You Sell What You Sell?

When I ask this of my clients and their boards of directors, I see a few blank stares, I get a moment of two of silence and then I hear generic justifications. I don’t want justifications, I am asking for you to look at your product and service line and one by one explain why this is being offered to your membership.

This exercise should cause other questions to be raised. Such as:

When did we start offering this and why?

How does this fit with our future direction?

Is this a profitable product or actually a drain of resources?

How well do we sell this?

How well can our front line staff explain the features and benefits?

What percentage of our membership actually uses this product or service?

Do we want more members using this product?

If yes, how do we make that happen, if no, why are we still offering it?

Sometimes in the evolution of a credit union products should be dropped and new ones added. I see many credit unions holding on to products because back in 1982 it was a hit and some of the board members remember those days. That product may no longer apply to the markets you are currently going after.

There is no advantage to offering everything. Strategically, it is much better to offer fewer products and services you do extremely well, than to divide your efforts too thin across areas with minimal return.

One client doing this exercise realized, of the 80 products and services they were offering; only about 35 really were of benefit to enough members that made it justifiable to keep in the credit union. Streamlining your products and services not only help your focus, but makes it easier for your front line employees to be better acquainted with what you are offering so they can more comfortably sell it to help the members with this financial needs.

-- Russell