Technology is not required, but change is—and with change comes the expectation of improvement.
A credit union’s strategy must evaluate the internal and external factors it will encounter on our journey through ordinary times and totally unprecedented circumstances like the COVID-19 pandemic and help its leaders create a sustainable competitive advantage to remain relevant to members, as well as provide long-term viability regardless of future economic circumstances.
Over the better part of the past three decades, I’ve led board and management team members through the strategic planning process. In the early years, we debated the importance of keeping up with new technological innovations and allocating resources to these new ways of doing business.
Questions popped up like: “Is it really important to have a website?” “Will members feel comfortable with the idea of having their personal information being accessible via the Internet?” “Is an automated loan-decisioning model really better than looking the member in the eye?”
We spent weeks doing cost/benefit analysis, trying to determine whether we wanted to be “on the bleeding edge” or “fast followers.” We ultimately determined what resources we’d be willing to commit to implementing cutting-edge advances. The process continued through the next several decades.
Looking back now, we know that technology allowed us to vastly improve productivity, increase efficiency and provide convenience to our members. But sometimes we lost track of what it was we were actually doing with these technological innovations. What we were actually doing was giving people what they wanted, the way they wanted it.
Obviously, we had to climb the adoption curve of these new ideas and we had to go through numerous iterations of how these new systems functioned. Many times, it was painful.
Today, technology is ubiquitous to our business model—probably even more so as people’s have needed to do business from a safe distance. Still, technology is not the most important part of our business. Of course, you already know that members are the most important part of our business. So, to maintain their loyalty, we must faithfully provide them with what they want, when they want it, and how they want it. Sounds simple, right? Well, this is where a road map for innovation inside your credit union becomes an important part of your sustainable competitive advantage.
The Greek philosopher Heraclitus stated, “The only thing that is constant is change.”
With change comes the expectation of improvement. Innovation can be described as the creation, development and implementation of a new product, process or service with the aim of improving efficiency, effectiveness or competitive advantage. You may notice that this definition does not mention technology. Innovation does not necessarily require technology, but it does require change. If we do not embrace change, we won’t be capable of providing the improvements our members want.
Successfully Addressing Innovation
The most important part of innovation is controlling the process so that we can make new ideas attractive and intuitive. Innovation is only valuable if it creates value for our members. New technology is great, but it is only a tool to create innovative ways to deliver our value proposition. If strategy is about finding the direction in which we want the organization to go, innovation is about continually evaluating the best route to get there.
Another important part of successful innovation is the willingness to embrace change. However, change for change’s sake is a great way to create chaos and disorder, so this requires that we create a systematic method for embracing innovation. We must learn to prioritize resources to implement change, while also understanding how these new initiatives will affect our current business model.
The prudent execution of change is an extremely important part of controlling resources committed to innovation as well as overcoming resistance to change. Inclusing multiple operational disciplines that allow us to leverage collective intelligence during the innovation process is key to reducing the likelihood of failure.
Did I forget to mention that innovative ideas aren’t always successful in their first iteration? So, you may want to make these changes in a test environment to minimize service disruption.
The 19th century English author Lewis Carroll once said, “If you do not know where you are going, any road will get you there.” Strategic planning is the road map we create to lead our credit union in the direction we want it to go. Innovation is the process of finding the current best way to get there.
Brad Smith is the founder of Smith CU Strategic Consulting. He has spent more than 20 years leading board members and executive teams in the development and execution of strategic initiatives. In addition to strategic planning, Smith specializes in branding, marketing and leadership development.