Two case studies in broad-based strategic planning
Traditional strategic planning is a partnership between two parties: the credit union’s board and its management.
The board puts together its vision, mission, set of core values and a list of strategic goals for the organization. Management translates the board’s vision into operational how-tos.
But what happens if you invite others to participate? The two CUs profiled here tweaked their strategic planning processes to reflect two key facts of life: first, that CUs rely heavily on vendors and partners to deliver the products and services their members want and need and, second, that members and employees play a key role in the life and culture of credit unions.
Their solutions might not be for every organization, but they’re new approaches that are worth thinking about.
Neighbors FCU: Field Trip!
“It began last year when we made a visit to what we would term a strategic vendor,” says President/CEO Steve Webb, CCE, a CUES member. “They invited us and offered to host us at their corporate offices, and we thought first of all, it’d be great to get away and to have access to the resources at their disposal, and also to help defray some costs. Not that that was the reason we did it, but it was like, ‘Oh, that’s nice.’”
The executive team made the trip and conducted strategic planning sessions with liaisons from CUNA Mutual in the room. Then, the execs returned to Louisiana and held additional planning sessions with the board to share the information they had gathered and convey the goals they had set.
But even before they got to the airport, they knew they were onto something they liked, Webb says—and that’s when they decided to make vendor site trips a regular feature of their planning calendar.
“We were saying, ‘Man, that was really good. We ought to do that again next year,’” he recalls. “We said, ‘Why don’t we rotate this?’ So this year we’ve reached out to our technology partner (CUES Supplier member Fiserv, Brookfield, Wis.) and asked if they were willing to host us [the next year], and they were very willing to do so.”
There’s probably some inherent value to simply being off site and out of the executive team’s normal surroundings; it tends to open people up to new ideas and encourage creative thinking. But the real value Webb and his colleagues have found comes from making plans in alignment with the organization’s partners. You don’t want your CU and your key vendors to have differences of opinion about strategy that might affect resource allocation or product choices. And if your vendors have some insight into the CU’s goals and values, they may be able to make better recommendations and plan deployments to meet critical timelines.
Here’s another potential benefit: Even the largest CUs tend to be small compared to big corporations. By conducting strategic planning sessions on a vendor site, CUs may have access to the resources of the larger organization.
“They’re bringing in their economist,” Webb says. “Maybe they’re bringing in their mobile experts. They’re bringing in some of their information and data that they may have collected about disruptors, fintech companies, competition and major changes on the horizon that these multi-billion dollar companies might have a little bit more access to than a little credit union in Baton Rouge does. I think it opens our eyes to a broader world to partner with them.”
Webb has so far found that vendors are excited about this type of strategic planning cooperation. He believes they like it when CUs are interested in not only their own business model and business plan, but that of their partners. However, there are a couple of potential problems to guard against. Because vendors may want to talk about specific products and services, there can be a tendency to look at the CU’s problems too much on an operational level and get bogged down in day-to-day details. The more that happens, the more the session can wander off course—and the more potential arises for confidentiality issues. It’s best to keep these conversations on a high, purely strategic level.
Still, Neighbors FCU believes the advantages of this approach far outweigh the challenges. The CU’s October 2017 strategic planning session will take place Fiserv’s offices in Alpharetta, Ga.
“We’ll have the opportunity to visit with their mobile team and product development,” Webb enthuses. “The Raddon Group (part of Fiserv) will be there, so we’ll actually pull up our data in their Raddon MCIF system. We can talk strategies with their experts on what they’re seeing based on our member data. So it’s quite efficient. Instead of having them fly in here and day after day try to bring in teams to do things, we’re there. That’s 100 percent our focus, so we can accomplish a lot.”
CFCU Community CU: An Open-Door Policy
Sometimes CUs become entrenched in the way they’ve always done things. Big changes can be hard in the absence of a watershed moment. But if the slate is wiped clean, a lot can happen very quickly.
$1.05 billion CFCU Community Credit Union, Ithaca, N.Y., had one of those moments in 2012, when President/CEO Lisa Whitaker succeeded a retiring CEO who’d held the position for 41 years.
“We didn’t have a strategic plan,” Whitaker says. “So we didn’t really start with the normal mission/vision/values. The executive leadership team and the board knew we were behind in a lot of innovation and infrastructure, and we knew we were understaffed. We had a lot of things we wanted to do in a short amount of time. So we needed to set some priorities.”
The team started out with strategic project objectives and conducted an organizational review at the same time. They determined that for an organization of their size (about $720 million at the time) they were extremely lean. They were missing staff for the entire VP level of their organizational chart. So they started by hiring a VP/sales and service, then eventually brought the number of VPs up to 10.
As vice presidents joined the organization, they became involved in the strategic planning process. But so did everyone else; it truly became a group effort.
“The board would have their retreats, and then the staff kind of took over from that point,” says Whitaker. “The strategic planning evolved from high-level projects to medium, low and departmental. And then all of these feed into the budget, and we require ROIs for all the strategic projects. And then that gets staffed [based on] how much we have to do in volume, how many products we’re going to sell, how we plan on gaining market share and how many staff we need in order to do it. At the same time, we are also developing contingency plans should the projections not come to fruition.”
Management, she says, reports to the board about high-level strategic projects and creates strategic dashboards for all the divisions within the organization. The executive team sticks with the big picture. But their ideas are disseminated downward so they can inspire suggestions from the front lines. For instance, staff helped craft a revised vision statement a couple of years ago, and it’s currently aiding in a revamp of the CU’s mission and values statements.
“We now have a strategic section on our website () for our members to review,” says Whitaker. “And then we have an internal strategic section for our staff, so that everyone understands what we’re doing and why we’re doing it. If a staff person wants to ask for us to implement a new product or service, they need to complete an ROI. We also have ERM here, so they have to build in components of how the proposed product or service would impact our enterprise risk management system—is it going to increase our risk or reduce our risk?”
But the employees and members aren’t the only source of ideas. Like Neighbors FCU, CFCU Community CU involves its key vendors. The difference is, it involves them all at once.
“We have an annual strategic retreat with all of our critical vendors,” Whitaker says. “They sign an NDA [non-disclosure agreement] as part of that, and [that means] you can have competitors in the room. They both have an opportunity to hear what our plans are and then think about how they can perhaps help us. So that has been really successful for us, because it has led to other things like follow-up meetings where those vendors come in and talk to us about how they can help us achieve our goals.”
For example, Whitaker says, the CU might share the percent loan growth it hopes to attain, the actions it believes it must undertake to hit that mark and the statistical trends it is seeing: products per member, calls coming into the call center, volume increases or decreases in various product lines and so forth. The vendors then start talking amongst themselves about how they can partner up to help the financial institution.
The format of the session has evolved over time, she says. Nowadays, there are breakout sessions based on topic. And if they want to, vendors can be invited back at a future date for one-on-ones with all the different vice presidents to talk about projects that are in the works.
“It was something that we wanted to do here because people have a lot of ideas, but if your vendors aren’t along with you, then it’s sometimes hard to implement,” Whitaker says. “It’s been, I think, a real win-win, and I know our vendors have really loved it.”
Jamie Swedberg is a freelance writer based in Georgia.