Change the product
A business guide for credit unions from the Broadway play Kinky Boots
It’s unlikely that the Broadway play Kinky Boots was written as a business guide, but if you are struggling with questions of relevance, add it to your list of potential team-building activities.
For those readers whose entertainment tastes don’t skew toward musicals with cross-dressing leads, the plot goes like this: Charlie inherited the failing family shoe factory and immediately decided to shut it down. Consumer tastes had shifted and there was little demand for high-end, classic men’s footwear. When Charlie advised workers of their pending unemployment, one woman scolded him to show some leadership. If people didn’t want what he was selling, he shouldn’t give up, he should change the product.
So change the product he did. In his willingness to reinvent, Charlie saved the company and filled an unmet need for an underserved demographic: Men who needed access to tall, sexy boots with heels strong enough to get them through a night of dancing.
When Charlie took the helm, he believed failure was certain because people told him it was. Similar companies in similar positions had already closed down their operations. In credit unions (and the trade associations that serve them), there has been no shortage of predictions of an irrelevant future. Credit union charters disappear quickly and industry economists project continued decline. Eight keeps surfacing as the magic number to which state trade associations will consolidate. FinTech start-ups are eating everyone’s lunch (and often doing it without much overhead or regulatory burden). If you listen long enough, you will hear how fast the sky is falling on everyone working in the credit union industry.
Recently, the U.S. Women’s Chamber of Commerce released an RFP for a credit union partner to serve the financial needs of its members. Women-owned businesses represent 36% of all U.S. business, but less than 5% of overall revenues. This is a large group of borrowers in need of access to small and microbusiness financing to support growth. As many credit unions bemoan low loan-to-share ratios and aging members with no appetite to borrow, one credit union will change their product and grow with this niche.
Changing the product will be hard: The organization has been clear that it does not want to be a SEG of a large institution or the focus of a targeted marketing campaign for existing products. Those who think a business loan is a business loan is a business loan are not the right fit, and there are many who think this way.
Banking is often regarded as a commoditized industry. Why would any organization spend scarce resources to turn something so basic into something sexy, fun or unique? Changing the product is daunting and may seem like a ludicrous, unnecessary step. There is a widely held belief that consumers want what they want and organizations will only survive by maximizing efficiencies, reducing price, and increasing functionality.
There was a time when people could have said the same thing about shoes.