MADISON, Wis.-Boards need to play a more significant role in mapping out their organization's strategy, according to one industry expert.
"I believe the board's role is what I would call strategic visioning, and leave strategic planning to the management staff," said John Gregoire, founder of the ProCon Group and who regularly leads planning sessions with credit unions.
Gregoire said boards need to answer three crucial questions during that process: Who are we trying to serve, who are we for, and what is our differentiation?
He offered Southwest Airlines as an example of that kind of strategizing and the subsequent interplay between the board and management.
"Southwest was formed for people who needed easy access from point to point at a reasonable cost," said Gregoire. "They said, 'We want to be able to get grandma and grandpa to see their grandkids at a reasonable cost using air transportation.' So they knew who they were for. They didn't say: 'Here's how much we are out to earn, here's how much tickets should be, here's the ROA, here's how many tickets we should have'-those were all up to management to deal with strategy. Management came back and said in order to do that we've got to be a low-cost provider, and here's how we do that."
Partnering on Vision
Gregoire said that though CUs and airlines are different beasts, and credit unions will have more interplay between the board and management, it's important that visioning not be solely driven by management. "[T]hey should be a partner,"
The consultant advised credit unions to keep a focus on prioritizing. "Most folks at the end of their planning process have a pretty good prioritization of major planning projects, but during the course of the year things creep into that plan, and there's not a good accounting for how to reallocate resources and whether or not to do something," he said.
"So the process of taking that original project plan and now adding to that the realities of the next year and the opportunities and the resources differentiates the really great credit unions from those that are good to mediocre."
Gregoire also noted that as most institutions have weathered the recession, it's time to think about long-term planning, and he advised that most CUs should be planning for at least 18 months out, if not longer.
