A Question For Every CU Leader

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LAS VEGAS-Standing next to a graphic showing the logos of well-known companies that have foundered or disappeared in recent years-including Wachovia, IndyMac and WesCorp, Rich Weissman said there's a question leaders must ask themselves.

"The point is none of us would have looked at many of these institutions would no longer be here," he said. "They were all well capitalized. Their ratios looked good. They thought they had good risk strategies. Regulators weren't breathing down their necks. They had smart management teams. But they failed. And each one of us needs to ask the fundamental question, 'How did that happen?' We have to step back and take a look at our industry a bit, and understand we have been in three distinct phases."

Those phases:

Phase One: Prederegulation/pre-1980. "You waited for growth to come in the door. We didn't compete in a meaningful way. We didn't do marketing and sales.

Phase Two: Deregulation. "Everyone got on a sales culture bandwagon. Let's sell a lot and grow the balance sheet, and cross sales became important. Everybody priced for volumes and we rewarded folks for production."

Phase Three: Profitability culture. "It's still about sales, but profitability is paramount. We must sell products that are profitable."

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Growth strategies