All This Looking Forward Benefits From Looking Back
It will be 2004 when thousands of federal credit unions descend upon Vancouver, B.C. for NAFCU's annual convention this week, but there will be plenty of discussion about 2009 and 2014 and beyond. That's because by their very nature most meetings are about looking forward.
For that reason, it's almost federal (and in this case, provincial) law that requires a futurist be trotted out to address the troops. I've long thought futurist is a swell line of work if you can get it (it requires, of course, planning ahead). The job basically entails giving the prerequisite laundry list of off-target predictions from throughout history (the Patent Office director who quit in the 19th century because everything that could be invented had been is a popular staple), followed by highlighting some trends that make people uncomfortable, and then your own interpretations about what that will mean in 10 or 20 years. Where the real beauty of the futurist job lies, however, is that most of the audience will have retired or died (ideally in that order) before having to deal with any of those trends, and even for those who are still around, who really looks back on these predictions, anyway?
For that reason I thought it might be enlightening to look back on some of the "looks ahead" from the past. One of the most detailed was published by CUES and developed by Decision Strategies International, Inc., in 1999, entitled, "2005: Scenarios for Credit Unions." "There are indications-warning signs and guideposts-that can help you steer clear of the dead ends and stay on the fast track," reads the introduction. "The more accurately you can use these 'signs' to envision potential future scenarios, the more adequately you'll be prepared."
At the time it was written the 11,100 credit unions in the U.S. represented 75.5-million total members and $400 billion in assets; today there are fewer than 9,800 CUs and the 85-million or so members they represent have plunked some $600-billion-plus into their credit unions. The "2005: Scenarios" guide notes quite accurately that it usually requires "deep crisis" to get organizations to change, adding "a crisis is an expensive way to adapt and sometimes it is too late. Scenario planning can be viewed as the creation of surrogate crises that should engender the same zest for change as real crises would."
Rather than offer a single vision of the future (if the authors knew that they'd be living off their appreciating stock portfolios), the CUES publication wisely offers four scenarios for the future. Among them is a vision for a 2005 when "mega-finance companies compete face to face with community banks and credit unions. And all are striving to get a bigger piece of the consumer's asset base." The authors get that one right; they also score with this observation for 2005: "Already lax FOM restrictions have been relaxed even more despite bankers' protests."
In this hypothetical, however, analysis misses the mark. The authors foresee "credit unions (beginning) to focus on specific niches. Rather than trying to be all things to all people-and diversifying fields of membership even more than today-credit unions are now narrowing their offerings and targeting them to the unique needs of their most central fields of membership." Whether motivated by risks associated with a single sponsor, keeping up with the C.U. Joneses, or by the bonus portion of the CEO's contract, credit unions have raced to expand into communities with wide open FOMs.
The guide also misses a target that everyone else missed, as well. "Bricks and mortar are less important than they were before the Internet era and the introduction of the ATM, but they're still essential." As has been well chronicled in The Credit Union Journal, CUs have never built more branches than they have during the past five years.
But the guide follows that strike out with a homer, observing that in 2005, "the biggest difference is that credit unions are much more aggressive in branding themselves and their offerings...The credit union brand still means a lot to most credit union members. In some cases, credit unions are leveraging their brand identities outside of financial services by sponsoring community events and promoting products that members might be interested in purchasing (for a fee)..."
Right on. But the sentence in that prediction that deserves most attention there is that "the credit union brand still means a lot to most...members." Too bad that in 2004 too many credit unions play up who they are rather than what they are.
This week in Vancouver the several-thousand folks on hand will hear similar forecasts; some will be bullseyes, others will miss the board entirely. When it comes to looking forward, credit unions have always had one big advantage over other types of businesses, which can fail by adhering to something that's "always worked in the past" and in the process become fodder for futurist's conference presentations. The fundamental, more-than-a-century-old, organizing principal of credit unions retains every bit of its appeal, and always will.
Some friends and I were recently watching a rebroadcast of a 1960s presentation of Hal Holbrook performing as Mark Twain, using material written a century earlier. It remained as funny and poignant and thought-provoking as when first put to paper and then to film. That's because basic human emotions and needs don't change-it's the reason branches haven't disappeared. Respecting the underlying tenet from the past of credit unions is the best forecast that can be made for their future.
Frank J. Diekmann is editor of The Credit Union Journal.