How To Avoid Having No Plan At All
MADISON, Wis.-Uncertainties about the future has led some credit union planning sessions to result in no plan at all, observed Fred Johnson.
The CUES president believes all of the economic and regulatory changes that have hit credit unions in the last two years could be stalling effective strategic planning. "Uncertainty can freeze people into taking no action at all," said Johnson, pointing to one of the biggest unknowns for credit unions, just as strategic planning season gets under way. "Everyone is waiting to hear the words of wisdom from NCUA-what will be the additional assessments. No one can put together a budget until you know these uncertain things."
When plans take shape, they need to address cleaning up all unnecessary expenses, reminded Johnson, who said credit unions are doing the right things. "I can't afford to have all the things I had before and that's why you are seeing the cuts everywhere. Credit unions realize they can't continue to employ the same numbers with the decrease in net revenue."
But credit unions can't manage their business from the expense side of the ledger. Instead, CUs have to pay much more attention to the revenue side of the balance sheet, despite the fact many revenue sources are being compressed, Johnson said. Business lending and expanding to serve young adults should be part of all strategic planning discussions, he added.
"Over the past couple years credit unions have hunkered down, just surviving," Johnson said. "That has been the mentality. I don't know if that will change, but duck and cover is not a good business strategy. There are always new products out there-we have to figure out what they are."