Strategic insights: Time-tested principles for credit union growth

After 30 years of guiding companies and credit unions in strategy development, I’ve identified some critical elements for crafting winning strategies. There’s more I can add to the list; however, if you focus on these areas, you will have a better chance of creating a solid strategy and executing it effectively.

Embrace complexity but seek simplicity: Recognize that strategy involves dealing with complex issues but aim for simplicity in the final product. Focus on a few critical areas that can yield significant results. Clear, straightforward strategies are more likely to be understood and implemented effectively. A plan with eight key strategies and 27 goals will never be executed effectively. Keep it simple.

Involve the right people: Strategy creation should not be confined to the upper echelons of management. Involve those who deeply understand different aspects of your credit union. These individuals bring diverse perspectives and insights, contributing to a more comprehensive and robust strategy. On the other hand, do not invite anybody to the strategy meetings unless they add value. One CEO I work with does not invite the CFO to strategy meetings. “He’s great with numbers but doesn’t think long-term.” But he does invite the head of HR because she adds significant value.

Ground decisions in reality: Ensure your strategic goals and numbers are based on accurate, current data. Analyze market trends, historical data, and potential impacts of external factors. Avoid setting arbitrary targets without a basis in reality. I have sat at strategy meetings terrified as senior executives throw around numbers with wild abandon. “Hey Bob, how do you think we’ll do with our branches in Tennessee?” Then, Bob will reply, “I don’t know; probably 50 million?” And then the other executive says, “Great, let’s mark you down for 65; that would be a good stretch goal.” It makes me feel like I just got hit with a cattle prod.

Strategic allocation of resources: At its heart, strategy is simply the allocation of scarce resources. Even Google and Amazon do not have unlimited resources. Make conscious decisions about where to allocate time, money, and personnel. Learn to say no to initiatives that do not align with your core strategic objectives. This discipline will help focus efforts on areas with the highest potential for success. If, in the end, it does not help you save money or make more money, then why do it?

Execution is key: A brilliant strategy is meaningless without effective execution. Emphasize a culture of accountability and performance. Set clear, measurable goals and regularly track progress. Refuse to tolerate mediocrity. Here’s a challenge. I want you to think of your credit union’s lowest-performing employee. Now, realize that that person sets the standard of performance for the entire organization. If you allow someone to consistently miss goals, deadlines, or standards, you’re telling everyone else in your organization that you were just kidding about excellence.

Adaptability and responsiveness: In a rapidly changing business environment, adapting is crucial. Be prepared to adjust your strategy in response to new information and changing market conditions. Flexibility should be built into your strategic planning process. However, don’t change unless the market demands it. I’ve seen many credit unions get in trouble because they chased the next shiny red ball. Create a great strategy and stick with it as long as it produces the desired results. I have one credit union I work with that has kept its strategy the same for seven years. It’s almost exactly the same year after year. Because it works.

Develop a member-centric approach: Understand and prioritize the needs of your members. Strategies should be designed with the member at the center, ensuring that every decision enhances member value and experience. As a credit union, you don’t have many ways to differentiate yourself; that is why creating loyal and engaged members should be a significant focus of your strategy.

Communicate clearly and consistently: Effective communication of your strategy is crucial. Ensure that every member of your organization understands the strategy and their role in executing it. Regular communication helps keep the strategy aligned with the organization’s actions. Remember that when you think you have over-communicated your strategy, the lowest person in your organization just heard it for the first time.

Measure and adjust: Establish Key Performance Indicators (KPIs) to measure the success of your strategy. Regularly review these metrics and be prepared to make adjustments as necessary. This iterative process ensures that your strategy remains relevant and effective. I hate using clichés, but I’m going to do it anyway, “What gets measured gets done.”

I’ve learned that the key to success is in applying these principles, not just knowing them. Your strategy’s biggest test is how it works in real life. Use these ideas as a framework to ensure that you have a simple, focused, and executable strategy.