While recently reflecting upon the challenges and accomplishments credit unions endured and celebrated during 2004, the widely read book by Spencer Johnson, M.D., entitled Who Moved My Cheese? (first published in 1998 now in its 135th printing), came to the forefront of my mind. If you've read the book, great; if you haven't, it doesn't matter. Let me explain why I think credit unions' collective cheese has been moved and what it means to our industry, and to our daily work lives.
The book tells a simple parable, with the quirky assistance of endearing cartoon-like characters with tongue-in-cheek names like Sniff, Scurry, Hem and Haw. The characters represent parts of ourselves and how we react in certain situations, and more importantly, how we react to change. The cheese is a metaphor for whatever you want in life, or in the case here, what you want for your credit union. And, of course, the "maze" is the journey or the path you strategically choose to send your credit union down.
Allow me to play this analogy out a bit. Many of us have been in the credit union industry for some time now, and some can even boast decades of dedicated service. This continually impresses me and it's something we can proud of-and have a right to be proud of! We collectively provide consumers with financial products and services that they might not have been able to afford elsewhere. Credit unions live by the philosophy of "people helping people" and we do indeed help people every day.
However, back to looking for our cheese... how many of us can successfully say that our credit union's strategic direction and efforts have changed to keep pace with our cheese's (a.k.a. members in this example) needs and wants; or better yet, be ahead of them? Have your credit union's new products and services kept pace with emerging markets and trends (such as electronic services)? Have your marketing campaigns and efforts been targeted to the correct markets in your field of membership? And, have the results of these efforts and their associated costs positively affected your bottom line? If not, how could they have driven better results? Have they been thoroughly analyzed and quantified so future efforts can be better prepared, targeted and executed? Is your infrastructure set-up to address these types of issues and initiatives? Do all staff members know and understand your strategic direction, and more importantly, has it been communicated?
I understand this takes much time and work that we may not be accustomed to allocating resources to, however, since we need to keep a constant eye on our cheese, these efforts may well be worth it.
Another example of our cheese being moved is the ever-changing economy. Many of us may remember the time when we were making interest rate spreads hand over foot. At that time, our balance sheets, profit margins and expenses could count on this spread.
As we all know, that era is long gone; spread margins are the tightest many of us have ever seen and it's a constant challenge to pay our expenses, pass on as much as we can to our members, and keep our doors open.
Gone are the days when you could "ride the market" and receive double-digit returns. As a result, credit unions now need to employ active and strategic asset liability management strategies to optimize returns. More than just yields need to be considered: different asset classes should be considered, risks need to be thoroughly weighed, maturities need to be laddered, and portfolios need to BE diversified and carefully reviewed so they ARE not over-allocated in one specific type of investment or with one specific issuer. Since our cheese has been moved, we need to find new and creative ways to find it. The good news is that there is more than one way to find it!
Closing my thoughts, I don't believe we can strategically keep on doing what we have always been doing, expect the same outcome and keep happily plodding along. Times have indeed changed; our cheese has been moved. Consumers are savvier in their financial services options than ever before (I am sure we can partially thank the Internet for that). We not only need to find the right path to our cheese, but also redefine our cheese. How we choose to adapt to these changes in the marketplace and in the economy will help us find our cheese, and our path to long-term success.
Are you a Sniff, Scurry, Hem or Haw (the names alone cleverly imply character traits)? How you answer this question in a given situation may lend valuable insight for your credit union's business tactics, member growth goals, and all-important marketing and branding efforts.
Charles W. White, Jr.is Chief Strategic Services Officer with Empire Corporate FCU, Albany, N.Y. Mr. White can be contacted at cwhite
