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Making “No” Decisions

One of the key characteristics of a high-functioning credit union is the ability to make “no” decisions in order to stay focused on the credit union’s strategic direction. As this year starts and the project list grows, it will be important to keep a laser-like focus on the projects that the management team has determined are the most important for achieving the credit union’s strategic objectives.

With 100% certainty, there will be many “shiny new objects” throughout the year that will be highly tempting or considered “must haves.” Before committing to those “shiny new objects,” it will be critical to take the time to filter them through the credit union’s strategic direction and objectives to see if or how they fit.

If they truly fit, then deliberately consider the timing of taking on more. Are these “shiny new objects” really top priorities or would the credit union be better served by delaying the start date so as not to distract from current strategic objectives?

Mastering the skill of strategically allocating resources is exceedingly important because technology innovations are happening at lightning speed. In the meantime, distractions will need to be put in the “no” or “not right now” column.

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Create a Process for Successful Execution of the Strategic Plan

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Strategic planning can excite, galvanize and motivate teams; however, even the best strategic plans are worthless without great execution. Teams often find themselves scrambling. What sounds doable while isolated from the everyday whirlwind can seem insurmountable post-strategic planning.

A solid process surrounding strategic planning can contribute greatly to successful execution. It’s no secret that strategic planning will take place and that initiatives will result. Ideally, teams should begin meeting immediately after the planning session to start planning projects. A process that includes scheduling time well in advance of the planning session for teams to meet immediately after is key.

These post-planning session meetings should review at a high level what resources existing projects will require and when. Then, resource requirements for new projects should be sketched out along with their timing. Looking at how all the projects will interact in terms of departmental resources should provide a reasonable view of capacity and ensure that multiple projects aren’t allocating the same resources at the same time.

Also, consider the following:

  • Teams are often handed a number of big projects to be completed by end of year. Consider leaving due dates flexible on at least some of the projects until the team has been able to review resource capacity and establish reasonable due dates
  • Communicate to the entire staff what projects are being undertaken and why in order to get everyone on board to make it happen. Communication from the top will ensure that all employees understand where the organizational focus should be
  • Have a good project management process. The process should include appropriate reporting of the status of projects to staff, management and board. Regular reporting helps to maintain project momentum, organizational focus and fosters accountability

High-functioning credit union managements regularly get out of their silos, carefully evaluate resource capacity and make priorities clear in order to execute their visionary strategic plans. The resulting success inspires teams to continue to perform at a high level year after year.

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Linking Strategy With Desired Financial Performance

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The strategic planning season is right around the corner. At the end of their overall strategic planning process, many credit unions believe they have linked strategy with their desired financial performance. Some credit unions decide on targeted financial ratios and believe they are linking strategy with financial performance, but not high-functioning credit unions. They simulate the long-term earnings and risk to earnings of their strategy to understand if it is positioned to produce the credit union’s desired financial performance.

High-functioning credit unions focus on what it will take to keep a business model fine tuned, not allowing it to get stale. They make sure they are more stellar than their competition at one, two or three things. They also make sure they are delivering a unique value proposition for the markets they are targeting. They dig into the data that is at their fingertips because, for example, they know how many approved loan applications were actually funded and they do everything possible to not let approved loan applicants slip away. High-functioning credit unions also know what percentage of transactions happen in branches, the call center and electronically – and they consider those transaction trends in their strategic planning process.

They also focus on creating and maintaining a sustainable ROA, long term. With margins in the 2s for the overall industry, figuring out how to do this is tough work – but critical. For example, high-functioning credit unions are constantly on the lookout for additional sources of non-interest income without taking advantage of members. They make sure their limited resources are being allocated appropriately. In other words, they make sure there is an ROI for every expense.

There are a number of other things high-functioning credit unions habitually do, but what we have included here should help credit unions focus on the right questions to be asking – and answering.