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Is Your Battlefield Changing Like Blockbuster’s Changed?

Blockbuster

In 2004, with $5.9 billion in revenue and 9,000 stores, Blockbuster enjoyed a dominant position in its market.  In the evenings and on weekends, their stores were busy with people eager to review the latest titles and select their entertainment for the evening.  However, by 2013, Blockbuster was down to just 300 stores earning $120 million in revenue (Source: Blockbuster and the End of Movie Buying, Bloomberg Businessweek, 11/8/13).  What changed?

Consider the following questions:

  • What business was Blockbuster in?
  • Who did Blockbuster see as their competition?
  • What did Blockbuster’s customers want or value in 2004?  Did that change by 2013?

During the turn of the millennium, new players were entering the video market.  In 1999, Netflix began its subscription-based service allowing members to send and receive DVDs by mail.  By 2007, Netflix introduced video streaming over the internet.  In 2002, Redbox began to provide DVDs through its self-service kiosks placed at convenient locations like McDonald’s restaurants, grocery stores, convenience stores, and gas stations.

Blockbuster’s battlefield had changed.  New market entrants, with new approaches and technologies, fundamentally transformed the consumer’s expectations and behaviors.  Blockbuster’s customers began to see store visits as an inconvenience.  Customers had new options and began to choose them.

Today, in financial services, new entrants like Walmart, Apple, and Google are creating disruption.  Changing consumer behaviors are driving new business models and expectations.  To remain relevant and sustainable, it may be critical to consider whether credit unions’ battlefields have changed and, if so, what strategies could be employed to compete.

 

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Get Ready for Successful Execution of Your Strategic Plan

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It takes more than team spirit to successfully execute on the strategic plan.  It takes… well, planning.  And while good planning and management of individual projects is absolutely critical, there is another piece that is often overlooked.  That piece is the process that surrounds strategic planning and is designed to help the organization hit the ground running right out of the strategic planning session.

Credit union management teams know, usually months in advance, when strategic planning will take place.  Those management teams with good project portfolio management practices also have a solid understanding of what projects are already in progress, their statuses, and what resources are required and when.  With this information and a little advance planning, management teams can implement a process that gets them out of their silos in a productive way and kick starts the execution of the plan.

Start by mapping out a process that fits the organization, since there is no one process that makes sense for all.  Some credit unions have project management departments or dedicated project managers.  Others know what some of the initiatives will be in advance of the planning session.  At a minimum the process should include scheduled meetings immediately following strategic planning to take a realistic look at projects already in progress and understand how the new ones fit in.  It may also include planning meetings for the new initiatives.

With a good process in place, you should never have to say, two months after strategic planning, “We haven’t really started on that yet and aren’t sure when we’ll get to it.”  The initiatives that come out of strategic planning usually represent the most important goals for the credit union.  Failing to execute on them in a timely manner could stop the credit union from making progress toward its strategic direction.  This process ensures that if new initiatives are on hold or existing projects have been sidelined, that it was a conscious, strategic choice to do so.

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An Approach to Monitoring Liquidity

Loan growth in the credit union industry was in double-digits as of first quarter 2015.  While this is a welcome change from the flat to negative growth experienced in 2010, it can put a squeeze on liquidity if not monitored appropriately.  Liquidity monitoring and measuring is a big focus for credit unions and for examiners.  Liquidity analysis should include not just the credit union’s expected liquidity path, but also stress events and potential solutions to those events, should they occur.  Some credit unions find this a daunting task.  Here’s a suggested process to help get your credit union going:

  • Start with your plan/forecast
  • Develop a list of liquidity concerns
  • Survey key members of the organization to rank liquidity exposures
  • Create a story that captures the main exposures
  • Walk through the story and quantify potential exposure
  • Role play how the institution could respond
  • Uncover weaknesses/questions
  • Create action items to address weaknesses/questions

By walking through this process, your credit union will undoubtedly begin to think about its unique liquidity position differently.  Many credit unions uncover action items that can be implemented today to better prepare them for an unexpected future threat to liquidity.

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Project Management Tip #4: The Dependencies

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When building a project plan, the timeline and budget will require close attention to the dependencies in the plan, and how they can affect the success of the project. For instance, a project to implement new software could be dependent on first ordering hardware and waiting for it to arrive, or the successful testing of the software to validate that the project goals are being met. Every time a task has dependencies for completion, the timing to complete those dependencies must be factored into the plan. When figuring out how much completion time to assign for a dependency, try to factor in the variables that are not in the credit union’s control, and how they could impact the project’s timing and budget.