Strategic planning requires a healthy culture
Businesses face massive challenges, especially driven by digital technologies that are creating disruption. Your strategy to address these challenges cannot just be an annual event. The strategic planning process must be an ongoing exploration that is creative and responsive to the times. This is true for all credit unions, and especially true for smaller ones. About 75% of the 5,757 U.S. credit unions have total assets of less than $100 million. Technology, however, can level the playing field for organizations of all sizes, while inattention to digital and economic disruption can make it difficult for any organization to compete. Strategic decisions that incorporate bold moves can simultaneously be a defense and an offence for credit unions of any size.
Too often resources are allocated in a way that continues past patterns without taking the current turbulent situation fully into account. This path of least resistance avoids making waves, but today’s business environment demands more. Complacency equals lackluster decision-making and for some, a threat to survival.
Leaders need to mitigate the social side of strategic change in order to catalyze big moves. Cultural dynamics are at play. Management incentives, human biases and organizational habits could make deciding resource allocation among your strategic choices difficult. These changes have personal and political dimensions. This is where a healthy culture intersects with strategy. Your culture can sabotage or support you in attempting to make tough decisions. Personal incentives and your credit union’s goals must be aligned.
No one wants to see their resources shrink, but senior people may have areas of responsibility where this will occur. Moreover, no one wants to punish leaders overseeing “honorable failures”. And neither should leaders overseeing chance windfalls be unduly rewarded. A culture of shared ownership in the organization’s overall success must be in place to address these concerns. An ecosystem of incentives, including recognition, promotion and compensation, and a clear articulation of, and adherence to, organizational values form the foundation needs to be established. Ensuring a culture of trust that the right thing will be done for the individuals involved, allows the tough decisions to become business choices, based on the best tools and information that your team can muster, devoid of personal agendas.
Strategy sessions should regularize wholistic thinking where a number of strategic options are analyzed, discussed, and even “fought over” in a constructive way. These discussions incorporate the best thinking around the table and are data-driven using internal and external data. It incorporates in-depth information about the external environment. Bringing your team into the process, not just senior management, increases engagement and improves the chance of success. Since your team is most probably on the front lines, adding their perspective to the mix is valuable.
Difficult decisions associated with big-leap strategies demand a culture of trust. Trust facilitates communication, assuring that all voices are heard, and none dominate. It means that when your people do the right thing for the overall good of the organization, systems are in place to reward them, even though their business may be downsized, or the risky venture they attempted did not pan out. Strategic downsizing can at times be as important as growth for the bottom line, and failures should contribute to valuable learning. Healthy culture engages employees, so they want to contribute to creating a successful future for the organization. Use your culture to increase the prospect of successful trajectory-bending leaps.
