MADISON, Wis. - In market in which the only thing increasing is expenses and competition and the only thing shrinking is margins, credit unions have no choice but to trust each other and collaborate to survive, according to a new report released by the Filene Research Institute.
The report, titled “Connecting the Dots on Credit Union Collaboration: A Colloquium at the Wharton School of the University of Pennsylvania,” summarizes the key findings of a 2007 colloquium of academics, practitioners and consultants, which was sponsored by Filene in conjunction with the Wharton School of the University of Pennsylvania. Collaboration theories and firsthand experiences were shared among attendees.
The report cites a myriad of challenges facing credit unions as impetus for not only cooperation among credit unions, but for changes in the behaviors and mindsets of industry stakeholders.
Among the findings:
* Information technology and trust are critical to enabling collaboration.
* Egos exist but have to be left at the door, as boards and executives consider large-scale collaboration.
* Vendors need to create attractive price points to encourage collaborative efforts.
* Collaboration occurs in phases not leaps so short-term, feasible goals are a good place to start.
* Credit unions need to consider that risk-averse thinking among boards may be more detrimental than taking new calculated risks, including large-scale collaboration.
* Credit unions need to share success stories.
* The industry challenges of the last five years –including rising expenses, shrinking margins, declining membership, and competition for market share–are reason enough to proactively seek change.
The report goes on to suggest that while collaboration is essential, it requires change, which isn’t easy, and then cites Harvard Business School professor John Kotter’s sequential steps for making change stick. Those steps are:
* Establish a sense of urgency.
* Create a coalition.
* Develop a clear vision and share it.
* Empower people to clear obstacles.
* Secure short-term wins.
* Consolidate and keep moving.
* Anchor the change.
Colloquium presenters include Dr. Harbir Singh of Wharton School, University of Pennsylvania; Kirk Kordeleski of Bethpage FCU; Lucie Bouchard of Desjardins Group; Randy Karnes of CU*Answers; Steve Williams of Cornerstone Advisors, and Dr. Steven Michaels of University of Illinois at Urbana-Champaign.
For info: www.filene.org.
