How an Outsider Can Support the Credit Union Strategy Conversation

woman leading a board meeting wide view
By George Hofheimer

5 minutes

Three approaches to bringing in a third party that can help advance the dialog—plus, one to avoid

My strategy journey started at CUES in 1998 when I worked in the professional development department. CUES was in the early stages of its CEO Institute programming, and I had the unique opportunity to be the onsite staffer for eight institute cycles.

I’m a slow learner, so after listening to luminaries talk about all manner of business topics for eight years, a few things eventually stuck. CEO Institute I: Strategic Planning at Wharton held a particularly special place as then lead faculty member Paul J. H. Schoemaker and former CUES executive Franck Schuurmans provided clarity and imagination around credit unions’ strategy conversation.

Eventually, I moved on from CUES to lead research at Filene Research Institute. During those 15 years, I was invited into countless credit union boardrooms for strategic discussions based on Filene’s research. Recently, I decided to go off on my own and synthesize these experiences to provide strategic advice to individual credit unions. This article shares a few approaches that you may find useful for your credit union’s strategic conversations.

Before we get started, let’s acknowledge that inviting an outsider to your organization's most intimate discussions is risky. Will the person understand your culture and capabilities? Will the person add value or just be an interesting side show? Will the person push your organization forward or take you off course? Personality fit is key to a successful relationship, and sometimes an outsider is not the right answer. As this article title indicates, strategy should be a conversation, and as with any good conversation, the strategy conversation should be reciprocal and engaging.

Having worked on nearly 400 credit union engagements on these delicate and important discussions, I can report three effective approaches for outside strategic advisors: (a) strategy mentor; (b) “uninterested” researcher; and (c) pure facilitator.

There’s also a fourth approach that I wouldn’t recommend, which I call the drop-in expert. This approach, anathema to strategic conversations, typically includes a charismatic personality who carries an impressive resume and lots of snazzy slides. However, the impact is much like a sugar high or the Omicron variant: dizzying but leaving you with a bit of a headache. Let’s now cover the three more effective approaches for your credit union.

Strategy Mentor

When I started Hofheimer Strategy Advisors, I had the idea to be the outsourced chief strategy officer for a handful of credit unions. The thinking was to bring in someone with broad strategy-making experience at a fraction of the cost of a full-time staffer. A few credit unions have taken me up on the offer, but the role turned out to be more of a strategy mentor than an actual CSO. A strategy mentor sits alongside the credit union’s executive responsible for strategy to formulate the organization’s plans on a consistent basis throughout the year.

The benefits of this approach to strategy are two-fold. First, the credit union begins to integrate the strategy-making process into its operations, whereas before the effort was isolated within an annual event or, at best, a quarterly review. Second, the person in charge of strategy gets coaching from an experienced individual on how to bring strategic conversations alive throughout the organization. Most executives assigned the strategy reins are given vague direction about what the role means, and many lack a comprehensive education on strategy execution. (If so, they should attend CEO Institute to ameliorate this situation.)

The results with a $3 billion client on the East coast include a newly constructed strategic plan, vivid communication tactics about the strategy plan’s relevance to such key stakeholders as staff, community and board, and most importantly, confidence in the credit union’s new chief strategy officer to fulfill his role going forward.

Uninterested Researcher

The next approach is the “uninterested” researcher who sits alongside the CEO in a trusted advisor role apart from the rest of the organization’s strategy-making process.

In this scenario, the CEO has strategic concepts that she wants to integrate into the organization’s strategy but is not quite ready to address with the rest of the organization. She uses the uninterested researcher to explore ideas outside the confines of the organization’s structure.

The process has a back-and-forth cadence: The uninterested researcher brings new information to the CEO, and she guides that data towards specified outcomes until she believes the organization is ready to receive the new strategic concepts.

The benefit of this approach is that for interesting, yet vaguely conceived ideas, the credit union can advance concepts without having to be met by the “antibodies” present in most organizations. By antibodies I mean well-meaning yet unhelpful barriers to new types of thinking. The result with a $5 billion client in the central U.S. was the identification of a non-obvious, underserved target market to support long-term expansion and differentiation efforts.

Pure Facilitator

Finally, the pure facilitator ensures that conversations stay on the right track and occasionally offers expertise in context of the strategic discussion.

In this situation, the CEO has a strong grasp on the organization’s strategy but needs some outside perspectives to push for incremental change/acceptance at the board and/or executive staff level.

The CEO uses the pure facilitator to guide strategic discussions so that he may fully participate in them. I find CEOs typically feel uncomfortable in their organization’s strategic discussions because they feel the need to facilitate, rather than fully participate, resulting in a lack of opportunities to share their beliefs and ideas.

The results with a multi-billion client operating across the U.S. are still early to return, but the process includes facilitating six strategy conversations throughout the year with a report out to the board of directors in alternating months. By the end of this year, we will deliver a new strategy plan to the board with input and acceptance from the organization’s key and diverse set of stakeholders.  

Whatever approach you land on (and I don’t recommend the “drop-in expert”), I urge you to remember two things about strategy making at your credit union:

  1. Strategy is an ongoing conversation, not an event. This ongoing conversation should include a diverse set of stakeholders, not just senior management and board members.
  2. Strategy should focus on outcomes specific to your organization. Don’t rely on templatized approaches, which tend to lead to undifferentiated strategies. Your organization is unique and thus requires a customized approach.

As stated earlier, CUES’ programming, especially CEO Institute, will help create the right mindset inside your organization to have the right kinds of strategy conversations. Sometimes an outsider helps push you in the right direction, and I hope this article provides insight on how that could work for your organization.

George Hofheimer advises highly ambitious credit unions that want to change the world. For more information, please visit Hofheimer Strategy Advisors.

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