What makes a good CUSO?
A CUSO, or Credit Union Service Organization, is a terrible thing to waste. About 8 years ago, 7 Credit Unions and I started Ongoing Operations. We have had our share of great success and our share of big challenges. Over the past 8 years, I like to sum up my battle wounds as follows: 4 Accounting packages, 4 CFOs, 2 COO’s, 3 ERP systems, 3 acquisitions, 3 Audit Firms, 4 Board Chairs, while raising over $15 million in capital and providing services to over 1000 credit unions. While I certainly fancy myself a change agent or career agitator / entrepreneur, even that pace of change has me tired. Almost all of these changes have been focused on building a better CUSO, providing better services, continuous improvement, and constant learning. Recently on a flight back from a long week, I stopped to pause on a question I wish all of us had asked on day 1 – What Makes a Good CUSO? I also wish in my credit union days we had ever asked What Makes a Good Credit Union?
Both questions are intertwined and can cut to the heart of what we are here to do. Being a “good” CUSO could mean any one of the following:
- Saving our credit union owners and clients’ money
- Providing services to CUs or Members they can’t get elsewhere
- Making our credit union owners and clients’ money
- Reducing Regulatory Complexity
- Reducing Operational Complexity
- Bringing Scale to our credit union owners and clients
- Providing our credit unions with great advice
The challenge of course, is defining a path that will meet the requirements that are making you a CUSO today while establishing a framework that will work in 3,10, or 20 years when all of the original people are no longer involved and a new generation of leaders become involved. Just as credit union members requirements change and morph constantly so do credit union technology requirements and ownership requirements. The lesson for me has been that as we have constantly been looking to improve – it is only been after experience great growth or losing a key customer or experiencing a major transition that we have been forced to sit down and think about designing a CUSO that constantly listens, constantly evolves, self-heals, and continuously improves.
Designing such a system, in my opinion, is the key to building a Good CUSO or Credit Union. This system must address Owners, Management, Employees, Marketing, Sales, Operations, culture, clients, and many other aspects and must be tied back to the short and long-term goals. The ultimately challenge is of course knowing where you will be down the road. As a start-up CUSO it is pretty much impossible to know what your market success or adoption will be, who your investors will be down the road, and how everything will shake out.
Strangely enough– you can control three major components. A) Your employees, B) Your clients, and C) Your investors. Your ultimate value and measuring stick for determining if you are a “Good CUSO” will come down to the same three components. When I look back on the all of the transitions OGO has had along the way almost all of them come down to changes that have come from having the wrong employees, wrong investors or wrong clients. Those changes have been polluting and been the most disruptive to building a Good CUSO. Each time we have found a tool or policy or system that has enforced being more selective about all three, we have become stronger, created more value, and come closer to being a great CUSO. Each time we get more focused on defining both what is the right AND what is the wrong employee, client or investor, we have gotten stronger, moved faster, and delivered more value. The same is true for your CUSO or your Credit Union. You must first decide an end game, then you must attract the right while repelling the wrong employee, client and investor. Then, and only then will you have built a Good CUSO or Credit Union. Then and only then will you deliver sustainable and consistent value to your members.
