LAS VEGAS — Credit unions must be aware of and adapt to fundamental changes in the world around them, such as a younger generation that would rather use financial applications than go to financial institutions.
That was the message from Patrick Adams, chief executive of the $238 million St. Louis Community Credit Union, at the 37th Annual Directors' and CEOs Leadership Convention here Wednesday.
He cited the importance of knowing the difference between a temporary disruption and a fundamental change.
"Credit unions compete in a commodity industry," Adams told a packed audience in a huge convention meeting room. "The most effective leaders are alchemists, those who transform one thing into something special."
As an example, Adams said that Steve Jobs turned a phone into a computing device, to which many people around the world are hopelessly addicted.
Adam also noted that cows eat grass, which 48 hours later comes out as milk.
"That is something pretty special," he said to a roar of laughter.
Unfortunately, the most common leaders in American business are planners, not visionaries, Adams said.
Planners are experts who are logical and seek rational efficiency, or they are achievers who are good at meeting goals by following prescribed strategies, he said.
"We do not need more plans. We need strategies," Adams said.
Finding Value
There is a long list of formerly great companies that haven't thrived amid the shift that has shaken businesses worldwide, he said.
These include Dell, Eastman Kodak, Montgomery Ward, Polaroid Corp., Sears Roebuck & Co., Sony Corp., and even Anheuser-Busch, which was sold to a foreign company.
Although the reasons for these failures were different in each case, Adams argued that the common thread was a lack of future thinking and adaptability to change.
"What makes you great today can end up being your ball and chain," he said.
"Credit unions need to be doing focus groups with members and non-members. They need to ask people what they want so they can keep in touch with trends," Adams said.
The job of senior managers is to spend less time on day-to-day functions and more on creating the future, he said.
Leaders must be in a position to analyze future trends and their implications, develop an agenda for change and remove bureaucratic blockages, Adams said.
Some of the companies that have thrived and constantly reinvented themselves amid change are CNN, IBM, McDonald's, Samsung Group, Sirius XM Holdings, Verizon Communications and Xerox Corp., he said.
The world economy now is in its fifth phase, morphing from agrarian to industrial to service to technology to experience.
To illustrate, Adams noted how someone might procure a birthday cake for their child in each economy: agrarian, barter for someone to make a cake from scratch; industrial, buy cake mix at the store and make it; service, buy a cake at a bakery; technology, order a cake from an online bakery; and experience, order a cake from an online bakery and have the cake delivered directly to the kid's party at Chuck E. Cheese.
What will the next progression of the economy be?
Consumers will demand corporate values and social responsibility, Adams said.
"If that is the case, credit unions are in a great position," he said. "This is part of our core DNA, but credit unions must create experiences for consumers."
