It's strategic planning season, which means it's time to discuss growth, new opportunities and the future of your members' credit union. As your governance and executive team talks over plans for your future, integrating an entrepreneurial mindset may help as you look to create the enthusiasm of building a new business within your existing business. Regardless of the structure of this year's planning session, three principles help guide entrepreneurs, their new ventures and the value they seek to create for their owners.
Build A Big Idea
From your purpose, build a big idea. A friend and credit union CEO considers his credit union's purpose before its mission and vision. His credit union's purpose: "To help our owners lead better lives." Of interest is the reference to members as owners (a nod to the entrepreneurial spirit of serving the members-owners-investors) and the expansive language of the purpose. In his words, "Our purpose does not limit us to only the business of checking, savings and loans. It allows us to serve our owners beyond their financial lives."
The credit union's mission describes what the credit union is doing for its owners — in the present as a credit union. The vision — the big idea — describes what the credit union will be as "a service leader" for its owners in the future. With a keen eye toward its purpose, the board has tasked this CEO with adding additional value for the owners beyond financial products and services. In short, the credit union is interested in being a partner in each owner's life.
As you discuss the drivers of your credit union's top line — your members — why do your members choose you now and why should they choose you in the future? What additions to your geographic reach, products and services and ability to deliver are necessary for your members to choose you tomorrow rather than just today? What could your credit union be for your members in five to ten years? Answer these questions and you're on your way to building a fresh business that benefits your current and future members. Better said — your owners.
Fill a niche that's ripe with opportunity. At a recent gathering of community bankers, a discussion focused on the value that bank customers receive from cooperative businesses (agriculture, power and water). The bankers gave high regards for the cooperative structure that allowed their customers to receive tangible benefits from ownership. It seemed obvious to all that owning a business was preferable to being just a customer. On that line of thought, wouldn't that same philosophy extend to a financial cooperative? Wouldn't retail and business customers be better served — and potentially wealthier — by doing business with a financial cooperative they own?
A major opportunity exists for credit unions to champion the niche they own by leading an exodus of bank customers to becoming credit union owners; there's lots of business to gain. For decades, credit unions' market share has remained just below ten percent. Over the same course of time, the nation's largest 100 banks increased their market share to, roughly, two-thirds. Rather than agonize over chasing the same small market share among fellow credit unions, why not purposefully go after the larger share of opportunity that exists among non-owners (customers) of banks? There's great value in ownership.
Increase the financial value for your owners. That's the entrepreneurial dream, right? Build a business that lands on the "Inc. 500" list or beckons a purchase from Berkshire Hathaway, taking owners from not drawing a paycheck to multi-millionaires overnight. In the financial sense, we want growth at our credit unions — members loans, assets, profits and more. If the stimulus of your credit union's revenue stream originates directly from your members, growing the value that your members receive leads to an end result of increased financial value of your credit union.
Increase Owner Value
Increasing the value your owners receive from their investment in their credit union may come in the form of lower loan rates, higher deposit rates, patronage dividends, or the most relevant delivery methods via technology. More important, your credit union is able to present the value of membership — a direct or indirect share of the profits from the very company your members own.
There's a tremendous amount of pride that comes with ownership — your first car, your family home and your season tickets for your local sports team. Ownership is powerful. Ownership is valuable. Ownership is significant. This matchless aspect is also the definitive and most meaningful point of differentiation for your credit union. Create your next set of strategies around this powerful model and source of loyalty as you build your business for your existing owners and those soon-to-be.
Jeff Rendel is President of Rising Above Enterprises. He can be reached at jeff@jeffrendel.com, www.jeffrendel.com or 951-340-3770.
