As the first month of 2025 takes shape, most credit unions have spent significant time formulating a definition of success. As an industry, we have no shortage of metrics, most of which are financially grounded. The balanced scorecard for most credit unions includes some measure of member experience, a set of growth targets (e.g., deposits, loans, membership), return on assets, capital, and potentially an expense control measure. We combine these with an annual budget and create dashboards to monitor results.
As financial cooperatives, these near-term measures make incredible sense and matter deeply. Our organizations must thrive sustainably to build longer-term outcomes for our members and communities. One of the ways that we can enhance our visibility and relevance is to consider ourselves “for-impact” organizations. As impact-driven organizations, we must demonstrate the difference we make in the world via that second horizon well beyond this year or even the next three years. Creating those measures and developing a dashboard for the broader future ensures direction and focus and creates a platform for even stronger financial performance. In other words, impact must not be divorced from bottom-line performance. It also cannot be shortchanged in measure.
Impact measures are much easier to ignore, especially in economically challenging times. The rapid interest rate changes that so dramatically shifted the landscape for credit unions in the last three years have put extreme pressure on financial performance at a time when technology demands, increasing fraud, fee income constraints, and competitive pressures are all coalescing to push credit unions to find new revenue options and reduce operating expenses. This demands consistent monitoring of performance and a nimble ability to adjust and navigate corrections as necessary to maintain financial health.
The power of impact measures is that they are aspirational and bold and can light the fire of inspiration in our teams to navigate, tolerate, and sustain through the tough short-term challenges of times like today. These impact measures also elevate the employer brand promise of credit unions, which can differentiate us as employers of choice and attract and retain top talent. They also represent the 7th cooperative principle of Concern for Community. While also focusing on member needs, credit unions work for the sustainable development of communities, including people of modest means.
The work that credit unions do can have a significant positive impact on American lives. According to Bankrate’s March 2024 survey, “47 percent of U.S. adults said money has a negative impact on their mental health, including causing stress.” Additionally, a NerdWallet study showed that “2 in 5 Americans (41%) say they feel good about their personal finance knowledge, nearly 4 in 5 Americans (79%) say they find at least one financial topic intimidating.” The pressures everyday people feel to afford life continue to mount.
As we monitor and leverage our traditional measures of success, here are six ways to begin mapping longer-term impact outcomes that can build our relevancy, ensure stronger financial performance, and better serve our members:
1. Embrace hyperbole
As financial services executives, we spend tremendous time focused on spreadsheets and numbers. This can lead us to feel skepticism about language that may seem too audacious. We may also worry that the bolder impact measures might be unattainable. We have an opportunity as leaders to lean into the power of hyperbole. The fortitude we can push ourselves toward in imagining an even braver and brighter future will be the lid for what can be created. Our teams will not likely stretch beyond our vision. That necessitates crafting impact statements that push us further. If it seems impossible, that likely means you’ve landed on the right level of boldness.
2. Get specific
While all of us within credit unions will create impact focused on the financial lives of our members and communities, impact statements must be hyperbolic, and they must also be specific so that the organization and our constituents know how our work will come to life and why it is relevant. Questions that can help create more specificity in your impact statements include:
- Who might we best create change for?
- How and in what ways might that impact come to life?
- What will be the observable outcomes that arise from your organization’s work?
- What might our impact look like in three years? How might that progress in 10 years?
For example, if your credit union might be focused on improving financial literacy, is there a specific group or target audience you might be best positioned to reach? Within that target audience, what difference would financial literacy make? While you might consider a very tactical measure of exposure to content or connection with a specific portion of your population initially, a stronger impact measure would focus on the result for those you worked with from the exposure or engagement with the credit union. An example might be, “Financial stress is reduced for credit union members, and credit union members have necessary financial resources to handle unplanned emergencies.” That might be initially measured by a percentage increase in tools supporting financial knowledge and benchmarking on financial health and stress questions. In the long term, the goals might be to increase from the benchmark and compare credit union members to non-members, demonstrating the difference the organization is making over time.
3. Build over time
While our annual measures of success must demonstrate progress within a year, impact measures will take longer to see results because they are more significant aims that take time to come to life. Start with the bold possibilities and then work backward.
In the example above related to financial literacy, the longer-term impact measure might be the change in the community as more members feel more financially resilient. That might lead to stronger generational wealth transfers, stronger community ties, and even a strengthening of the community’s success. The impact measures might be about the retention of a younger population within that community and the vibrancy of that community as a place to live. Again, these are much longer-term aims, yet what starts as a near-term outcome can build and grow, demonstrating the true power of a for-impact entity like a credit union to make a difference for individuals and multiply that positive change for many. Creating bold impact goals sets the stage for these possibilities; without them, we might not challenge ourselves to change the world in the way that our business model allows.
4. Marry horizons
One of the most powerful outcomes of growing impact measures is how much they can change the work and culture of the organization. We must carry the short-term measures and typical financial metrics with us and ensure performance sustains and grows. Yet, these may not inspire people to wake up energized for work. Helping the organization see the connection between impact measures and near-term financial metrics creates a workforce with stronger financial acumen and business savvy while magnifying inspiration and creative thinking. Marrying the horizons so that the whole team understands why actions today can build toward even more powerful outcomes for the future sets the stage for credit unions to be the employer of choice that we know we can be and shift the employer brand of our movement to one that people stumble into to one that people compete to join.
5. Include community efforts and much more
As we think about measuring the impact of our organizations, we might naturally steer our thoughts to community giving and our philanthropic efforts. This is a powerful part of the difference credit unions make in the world, and we do it better than most. We must not stop there. The for-impact outcomes for credit unions also include reducing financial stress, improving the path to homeownership, reducing the possibility of economic abuse, cultivating generational wealth, improving small business outcomes, enhancing the performance of not-for-profit organizations, and so much more. As you review the first drafts of your impact statements, make sure goals stretch beyond the community and philanthropic work of the credit union.
6. Iterate. Iterate. Iterate.
Impact measures are much rarer than the annual balanced scorecards we’ve come to embrace. As we consider measuring impact boldly, what we think might work to measure success may need tweaking over time, especially as we build from a near-term one-to-three-year measure to a longer-term ten-year outcome.
Consider including subject matter experts as partners in formulating ideas for impact measures. Those closer to the work may see the outcomes that come to life from the credit union’s efforts and observable conditions. Gathering a list of choices, from the more obvious to the surprisingly daring, will allow boards and leadership teams to consider whether the proposed measures will genuinely push the organization to transform lives. It also prevents daunting wordsmithing starting from a blank page. With these ideas in hand, the team can then build measures of success and targets that demonstrate change.
As these measures are tracked, be open to reviewing impact measures regularly and seeking to understand if what initially seemed to be a viable benchmark is truly capturing progress or if alternatives need to be considered. While metrics should not be changed on a whim, an openness to iteration matters, especially as impact measures are first introduced to an organization.
The potential for credit unions to manifest positive change is great. To do so, we must perform and have a healthy financial performance. Measuring that performance in an annual balanced scorecard allows the organization to navigate today’s challenging and complex economic environment. Additionally, we have an opportunity to augment the way we define success as individual credit unions and as a movement holistically.
As for-impact organizations, we truly can change the world. The path to that positive change begins with bold strategies and dreams that help shape the possibilities. From those strategies, longer-term impact measures chart the course to measure, track, and build upon the changes that begin with one human being and multiply as they are shared with more and more people. 2025 will be the year of the credit union. Let’s use our shared momentum to challenge ourselves to think about how we measure and share the difference we make in the world. It will amplify each credit union’s work and give us a chance as a movement to tell an even more compelling story about the difference credit unions make across our great country.
What impact will your credit union make in 2025 and beyond?