When Will This Be Over?
It’s natural to wonder when things will get back to “normal.” But week after week, the only thing consistent in the economic indicators is that they are not consistent. So how do we plan for the future?
Most credit unions are designed to thrive in a different type of economic environment─one we may not see again for a long time. Yet opportunities exist in every environment. The key is the ability to alter our mindset and look for ways to take advantage of the current reality.
Try test driving the scenario: “It is 2015 and we are thriving. The economy is about the same as it was in 2010.” What did you do to thrive? How is your strategy different than it was in 2010? Instead of looking for a “magic bullet,” consider staying true to your core business and improve areas of expertise. For example, there may not be much loan demand at the moment, but by truly understanding what your target market needs and values, you can work toward getting more of the loan demand that currently exists.
Also, many institutions are focused on cutting costs; according to NCUA’s aggregate FPR for March 2010, there was a 36% decline in the industry’s average operating expense ratio from March 2009 to March 2010. However, keep in mind that some cuts are not sustainable, such as pay cuts and leaving critical positions vacant. While they may be necessary in the short term, work toward sustainable cuts like improvements in processes and strategic changes in product offerings. Consider the following statistics from the Harvard Business Review’s July-August 2009 readers’ survey, How Bleak is the Landscape?
- Only 27% of businesses surveyed are streamlining product or service offerings
- Only 34% are reengineering processes
- Only 37% are improving current products, services or customer support
Rather than hunkering down and waiting for the storm to pass, meet the storm head-on. Stay focused on strategy and never stop thinking about ways to improve your business.
