How To Plan For The Future Now (Rather Than Lying Later)

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Since not even Nostradamus always got predicting the future right, strategic planning must be about planning for several scenarios rather than adopting one course based on a future no one can forecast, according to one planning expert.

"The future does not exist," said Franck Schuurmans of Decision Strategies International, at the CUES Annual Convention. "It's in the making; it's a moving target. If you have only one course mapped out based on one idea of the future, and that future doesn't happen, what do you do? You will find lie after lie to justify your course. We will not adjust our course if we don't have alternatives in sight."

That's why DSI looks at the future in terms of scenarios by analyzing certain trends and how they affect one another to come up with several different future environments with which credit unions may have to contend.

The first step is interviewing "major stakeholders" in the credit union community to help develop the scenarios. Among the stakeholders interviewed for DSI's 2010 Basic Scenario Matrix were Jim Likens, Steve Williams, Mike Neill, Tom Vartanian, Chip Filson, Bob Hoel, Mickey Wilson, Mark Hawkins, Ron Shevlin, Cathering Robertson, Ron Oleston, Rose Bartolomucci, Mark Heth, Carol Humenick, Bert Ely, Hal Fried and Gary Irvin.

From those interviews, "strategic forces shaping the future" are identified as well as long-term trends. "Trends are concrete forces that are important to your business and that you believe are likely to occur," Schuurmans said. "In general, you're willing to bet your company's strategy on these trends."

Among the listed trends:

* Detailed customer knowledge continues to improve;

* Baby boomers redefine aging and retirement;

* CU consolidation continues in the U.S.;

* Expanded fields of membership continue;

* Non-bank financial services providers increase share;

* Internet banking increases due to broadband and familiarity;

* Credit unions continue to broaden their product/service offerings;

* Branches remain a vital part of the mix;

* Technology plays a critical role in financial services, both in outsoucing, backoffice and customer interface.

Planning for the future also includes a lot of uncertainties. Among some of the biggies to take into account:

* How will the national and local economic conditions impact credit unions?

* What will be the degree of intrusion of the regulator for credit unions?

* How will American society continue to evolve over the five to seven years (diversity, haves versus have-nots, regional differences, booming versus structural poverty)?

* How will consumer preferences develop (one-stop or portfolio)?

* Will terror remain abroad or become a domestic issue?

The 2010 matrix puts the type of competitive environment in which credit unions will have to exist on one axis-will CUs be in a "protected" environment that doesn't allow for lots of new entrants into the marketplace or will they be in a "hyper competitive" market with many new players coming on the scene? On the other axis is the state of the marketplace-homogeneous or heterogeneous.

Using this matrix gives credit unions four different scenarios for which to plan. In going through the process of determining what skills a credit union must develop in order to thrive in each scenario, certain priorities for any future evolve, Schuurmans explained.

"The capabilities that show up in every scenario, that's a robust resource-something you always have to have no matter what the future brings," he offered. "This is like the food and water you have to have. This allows you to rank and prioritize the capabilities you need to develop."

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