Last month, Randy sent out an email regarding a generational approach not to how credit unions view their consumer-owners, but how they see themselves and their own staff. He posed the question of whether CUs and CU leaders are self-aware enough to expect norms to change or do they just find themselves out of sync with where they are today and behind the gun. How will new generations of leaders decide what it means to be a credit union moving forward? I took up the intellectual challenge and suggest the following…
Future executive and managerial skills will need to be fine-tuned to meet the evolution of the credit union into what I would call a “pure financial intermediary.” In the purest sense, tomorrow’s credit union would act more as a broker of the member’s financial needs, all while controlling the brand identity of the credit union as seen by the member/owner and the general public. To be successful, small, medium and yes, even the largest credit unions, will identify the expanding requirements to build collaborative operational and aggregated funding and depository solutions to lower operating costs and maximize the fee return on networked lending and depository solutions. The concentration of expertise in shared operational and transactional solutions owned by a network of credit unions will eliminate duplicative overhead expense and minimize, reduce or even eliminate the growing costs of managing balance sheet risk.
By aggressively building collaborative scale, fully leveraging technological tools and refining the special skills necessary for a successful, networked business strategy, tomorrow’s credit union leaders will be able to not only sustain the credit union model but should aim to be the pre-eminent solution for all consumer-based retail and small business financial solutions. We’ll beat the banks and the fintechs by being “greater than the sum of the parts.” We have often “talked” this strategy, but our execution has sucked.
Adopting this strategy allows the individual credit union to focus and concentrate on what we have traditionally been the best at: providing the expertise necessary to identify and meet the life time needs of the individual credit union owner and member. This strategy also requires that CU management teams possess and execute the skills necessary to be a good network partner. We’ve all seen in our many collaborative efforts among credit unions, some credit union CEOs and their teams are great partners in any networked effort, some not so much.
This is a learned skill! Some will never be comfortable in anything but the traditional vertical hierarchy, but credit union survival and our desire to provide the very best in product design, pricing and delivery/distribution channels demands that future leaders learn and execute the skills required of a networked model. Think about it… at some point in the past, a group of individuals decided to create a network in order meet financial needs that they found lacking in other institutions or completely barred from. We need to take that same strategy up more than a few notches than we find in our current institutional solutions.
In the future , if you think you can manage in isolation or think you and your team can manage in the networked world without a new set of skills, good luck.