AUX Blog

Strategic Planning to Survive and Thrive, Part 1

November 29, 2022


It’s that time of year!  Credit Unions are holding planning sessions to develop the 2023 Strategic Plan.  Is your plan going to ensure your credit union survives and thrives?  Or is it more of a check the box exercise and then you return to your day jobs?

In this article we address the sometimes forgotten but fundamental core concepts of our, and any business.  These fundamentals are especially important in the uncertain and strained environment we’re operating in.  This sets the foundation.  The next article we’ll learn how we can do the hard work to ensure we develop a plan that is clear, concise, identifies the few wildly important goals and institutes accountability.

First, Remember Who’s Boss

The members we serve are the very same members that own us.  That’s who we have to answer to, our member-owners.  In these challenging times it is more important than ever to:

  1. Do what is best for our member-owners AND
  2. Be financially healthy

It’s easy to do one or the other.  This is the beauty and challenge of this industry.  Which one is your credit union strategically emphasizing?

Rising rates, tight liquidity, a potential recession and shrinking margins are putting pressure on management.  Finance staffers are pushing to significantly raise loan rates or even want to shut down lending.  Loan staffers want to keep originating loans at affordable rates.  There is talk of delaying strategic initiatives, reduce staffing levels and cut other costs.  Are you having healthy debates when making these important decisions?  All credit unions are different, are you deciding on an appropriate balance between #1 and #2 for your credit union, while remembering who’s boss?

Takeaway #1: We answer to our member-owners, continue to do what is best for them while being financially healthy.

Second, Be Relevant

Credit Unions are in a commodity business.  Our member-owners can go to dozens of physical or internet only institutions to get the products and services they need.  Can you articulate your business model and how it differentiates you from the masses, so you remain relevant?

It is no secret we must successfully engage with our member-owners, our employees, and the communities we operate in if we are to differentiate and be relevant.

Takeaway #2: Credit Unions need to differentiate to be relevant, and not on price. 

Third, The Importance of Culture

We all heard the saying by management professor and author Peter Drucker: “culture eats strategy for breakfast.”  Before you address the Strategic Plan, ask yourselves, what’s your culture plan?  You need to have defined values that are part of the fabric of your institution and live them every day.

Takeaway #3:  An outstanding strategic plan with a broken culture is worthless.  High performers who do not exercise the values of the organization must go, period.

Fourth, Prepare a Strategic Plan, Not an Escape Plan

What does that mean?  Super-sized documents and binders (with the picture of a branch on the cover of course) are not needed.  Goals similar to something like, “expand staff training to improve member service levels”, while important, do NOT provide the focus needed nor can success be clearly measured.  But it’s a nice attempt at an escape plan to avoid what is really needed:

  1. Focusing on the very few wildly important goals
  2. A compelling scoreboard to measure success
  3. Accountability

Takeaway #4: Less is more … remember FSA: Focus, Scoreboard, Accountability

The Strategic Plan to Survive and Thrive

Now that we have these core concepts as the foundation and building blocks, let’s take step one.  Of course, there are many ways to approach this, but the reality is it can and should be kept simple.  We must ask ourselves the following seemingly simple, yet very challenging questions:

  1. Where are we now?
  2. Where do we want to go?
  3. How will we get there?

These will not be easy to answer, nor should it be.  It requires a healthy debate amongst the board and management, an honest self-assessment, and data.  Take the time to ponder these questions before diving in.

How to answer these questions to generate a Strategic Plan that helps ensure your credit union survives and thrives will be Part 2.   You can’t wait huh?

Written by: Rich Nave

Rich has over 38 years of finance and accounting experience, including 17 years in the credit union industry, the last 13 as the CFO for a large credit union in New York. Rich is passionate about helping credit unions thrive. Collaborative and service-oriented, Rich provides strategic insights and critical decision-making analytics while communicating the story behind the numbers.


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