Five tips for preparing for uncertain times

After 9/11, PenFed built a strategic plan to transform our business within a decade to be 95% remote and only 5% brick and mortar. Over the years, our branches have encountered challenges (like hurricanes in Puerto Rico and blizzards in Nebraska), but the coronavirus pandemic has been the greatest test of our business model to date.

What we have learned is that the model works – largely because we were prepared for what was to come, and we spent a decade rehearsing for it. By March of this year, 80% of our transactional business was already conducted through our mobile or web platforms (versus through phone calls or in branches). Our employees already had the capability to work from home and transitioned quickly at the onset of the virus. In our branches, we shifted to drive-through only. 

We have been holding our board meetings remotely, and earlier in the month we held our annual meeting virtually for the first time in our 85-year history.

Year to date, our volumes are up nearly 30% from 2019. We reached 2 million members and have surpassed $26 billion in assets. This was the result of long-term preparation by our board of directors and senior leaders and the hard work of exceptional employees. Strategy, Focus and Execution has been our mantra.

PenFed is just one data point. But I hope our experience with a remote business model will be helpful to other credit unions. As our economy reopens, here are five tips for credit unions to consider when preparing for the future:

  1. Take care of your employees first and foremost. The best way to prepare for the unexpected is to focus on your employees. My second week at PenFed, when I was the chief administrative officer, two female executives came into my office. They had each worked their way up from teller to executive vice president over many years and had the trust and respect of everyone who worked with them. “No matter what you do here, take care of your employees,” they advised me. I will never forget it, and it has proven to be true. “People helping people” isn’t just about helping members. It’s a chain philosophy. If you take perfect care of your employees, they will take perfect care of your members.
  2. Develop guiding principles. Develop a guide for a safe return-to-office plan that can be applied or adapted to different scenarios. At PenFed, our guiding principles are: ensuring the safety of employees; accomplishing our mission and goals; and building to “better” (always striving to add more value in our products, services and infrastructure).
  3. Be physically prepared. In his foresight, Frank Pollack, my predecessor as president and CEO, spearheaded the planning for a variety of crises. For years, we have made sure to have stocks of meals ready to eat (MREs), water, generators and masks. We have made significant investments in the physical technology that enables remote work.
  4. It’s dangerous to be wedded to an idea. Sometimes the best thing you can do is let go of that “great” idea. What you don’t do is as just as important as what you do. For example, does building another branch align with your strategic vision of becoming remote? Do you need that ATM in that location, or should you wait until you have a location that’s frequented by more members? We all have limited resources, and for every decision there is an opportunity cost. In the hard times, you will be glad you didn’t overspend, overreach or stray from your vision in the good times.
  5. Be agile. When I was in high school, I always worked several jobs at one time. I would go from a manufacturing job to mowing grass to my job as a teller at a financial institution. It taught me to focus on agility within our institution. If leaders and employees are able to move seamlessly from one task or demand to another and remain levelheaded and flexible in responses, the credit union as a whole will be better prepared to handle new challenges.

In our work to ready our credit unions for future challenges, don’t lose sight of the big picture. We realize “success” for a credit union isn’t all about profit – it’s about helping people. Real success is inspiring others to do better. Remember that “many hands make the load light.” Within the credit union, when teams and people go out of their way to help each other succeed, the organization is stronger. We’ve got to stick together.

James R. Schenck

James R. Schenck

James Schenck is President and CEO of PenFed Credit Union, headquartered in Tysons, VA.  PenFed is America’s second-largest federal credit union, serving more than 2 million members worldwide with ... Web: Details