Credit unions: Avoiding the Kodak moment
The term “Kodak Moment” became a popular saying in the early nineties as a part of a widely popular marketing campaign produced by none other than Kodak Company. The Kodak Moment I will be speaking to has no affiliation with happy pictures of families around a campfire or smiling couples posing with the newest edition to their family. Nope. The Kodak Moment I’ll be referring to was a pivotal moment in 1988 when Kodak decided to ignore all of the information they had been gathering for years about digital photography and chose to spend billions focusing on the chemical process of photo development.
It may seem trivial, but on that day in 1988 when Kodak decided to buy Sterling Drug for a cool $5.1 billion, they essentially sealed their fate and their filing for bankruptcy in 2012 was all but an inevitable formality.
So, what does Kodak have to do with credit unions? A lot, actually. In the eighties, Kodak was at an inflection point. Companies like Fuji and others were supplying the same services, but at a lower price point. Companies were beginning to look at their businesses strategies and making decisions about how they would diversify or how they would improve what they already do (Kodak)!
Now, with 2015 on the horizon, credit unions find themselves at a critical inflection point as well. In order to avoid going the way of Kodak, credit unions will need to take a long look at themselves in the mirror and answer some very hard questions. Here are just a few:
- What sort of business are we?
In 1988, Kodak decided it was a chemical company that just so happens to be involved in developing film. Wrong answer.
What business is your credit union in? Are you confident enough in the foundation that has been laid before you enough to venture out and explore other possibilities? Are you and your management team comfortable enough to talk about inefficiencies and then make the necessary adjustments?
Knowing the answers to these questions is the first step in preparing your credit union for a successful future. If you’re not sure about your answers or you answered no to the second and third questions, there’s no better time than the present to have these sort of important conversations.
- If we were gone tomorrow, would our members really care?
I really can’t speak for anyone else, but I’ve never found myself reminiscing about the joys of dropping rolls of film off at the supermarket or jonesing to leave my house to rent a movie.
It’s probably pretty safe to say that not many people miss Kodak or Blockbuster, but would your members miss your credit union if it disappeared? Be honest with yourself, what does your credit union do differently that no other financial can deliver? Are your member’s interactions with your credit union strictly transactional or are they more experential? How do you make banking easier, less confusing and provide solutions to member problems before they even realize a problem may exist?
Companies that do not focus on or consider how their business model and delivery channels may need to change with emerging technology are the companies that go by the wayside. Before the invention of the iPod, who really thought they needed 2,000 songs in their pocket?
- Is your credit union capable of adapting?
Are you or your leadership team even capable/willing to adapt? Are you having conversations and gathering information about the rapidly changing technology landscape in the finance realm? Do you have plans to build a website that creates loan and membership leads? Can members or potential members apply or begin the loan application process on your website?
As mentioned earlier, Kodak spent years conducting research and even developed the very first digital camera, but they still chose to conduct business as usual instead of paying attention to and acting on the information they had gathered. In the financial services industry, all the data and trend reports being produced for the last several years point to the need for credit unions to develop stronger digital strategies. Are you looking at the options that are available? Will your credit union be the next Blockbuster or will it be more like Netflix?