by Sean McDonald, Your Full Potential, LLC
Stretching – it’s the first thing that we are told to do before any physical workout – whether it be running, weight-training, climbing, or other aerobic exercise. The advantages and benefits associated with stretching are obvious – increased range of motion, more blood flow to the muscles, and less chance of cramping during or after your workout.
Credit unions are in the midst of setting their strategic goals for the coming year. We all know the rules of goal-setting – goals should be attainable, measurable, and realistic. Some credit unions are conservative by nature and will set goals appropriate for their business models. Other credit unions are a little more aggressive and progressive in their goal-setting and their goals will reflect this type of philosophy.
Whenever I work with credit unions on strategic planning and goal-setting, I always recommend that credit unions set goals that meet the SMART test (specific, measurable, attainable, realistic, and timely) but I also suggest that credit unions set so-called “stretch” goals as well. A stretch goal is one that is more difficult to attain, requires more productivity and effort, and ultimately results in an enhanced sense of achievement that is enjoyed by those who reach the goal.
An example of this is with new memberships. One credit union client that I work with in California recently set a new membership goal of a 4% increase for 2013. I suggested that they also set an additional stretch goal of a 5.5% increase and attach a bonus of some kind if the credit union achieves it. If they meet the original 4% increase, they will have succeeded and should be proud of the accomplishment. If, however, they reach the 5.5% increase, they will have “knocked it out of the park” and, as a result, would have an even greater sense of accomplishment and would no doubt enjoy a boost in morale!
How did I arrive at the number for the stretch goal? Did I just arbitrarily decide on that number? Absolutely not – there were reasons for that particular figure being selected. Namely, the population growth of the credit union’s service area has been steadily increasing over the past 10 years. Furthermore, the demographic that contributed the most to the increase are people between the ages of 25-48 (otherwise known as Gens X and Y!) So, as more people move into the service area, the credit union’s potential membership increases accordingly. It was all about the data – the numbers that were readily available through a simple census search. Credit unions need to be aware of the environment outside and the demographic forces that affect (either directly or indirectly) performance and opportunity.
So, a couple of things to remember when setting stretch goals:
- Use available data to arrive at the numbers. Don’t be random.
- Make sure everyone knows the philosophy and reasoning behind setting stretch goals.
- Attach an incentive or bonus of some kind to the stretch goals that you set. If the credit union employees achieve more, they should get more. Simple as that.
- Set stretch goals for things like membership growth, loan growth, and deposit growth – the “productivity” metrics.
Get out there and stretch! You’ll be happy you did after the workout!