Cooperative tactics are as important as business tactics for driving growth in small credit unions
Recently I came across a new term that the NCUA has coined: “Leapers.” I am waiting for some clarification on some of the characteristics used to apply the label, but the gist is “leapers” are credit unions that have recently negotiated the transition from being a small credit union to one that might be considered big. Has anybody else heard this term? Can you fill me in on what constitutes a small credit union today? How far up the scale do they have to jump to be a big one? Or how fast do they have to go from one to the other to qualify as a leaper?
The problem with assigning labels
This is one of the problems our industry has today—labels that seem to imply a judgment call as to what is good or bad about our operations. Big sounds better than small. Leaping forward sounds better than the slow and steady move forward. But there seem to be no rules attached to assigning the label, so everyone wonders the same thing. Am I big enough not to be called small? Am I growing fast enough to be a leaper?
And worst of all, do I satisfy the opinions of others when it comes to being relevant? We are crippled in our thinking today by trying to be relevant to almost anyone other than our members. Are we relevant to our peers? Are we relevant in the eyes of the NCUA? Are we relevant in the concerns of our competition? Are we relevant in the minds of our local business leaders? Are we relevant to anyone?
The real question we should be asking
What we should be asking is whether we are relevant to our owners, and how we could even determine that. Members are customer-owners, but it seems that in this day and age the question has shifted too far toward thinking of them mostly as customers.
“Are we relevant to your future when you think about being the customer of our financial service organization, Mr. or Ms. Member?”
We try to be, almost to a fault, because if we do not try to be the most competitive financial institution we have no other measurement we trust today to say we are on mission. If we are not growing our member base, how could we be relevant? If we are not growing our balance sheet, what measurement do we have to support our efforts? If we are not excelling with our examiner’s scoring models, how could we be relevant to the future? If you do not confirm our relevance as a customer option in this sea of almost too many vendor options, how could we be on mission? (Members are CUSTOMER-owners in this day age and most likely from now on—although I hope not.)
“We would like to ask you about our relevance when you think about being the owner of our financial service organization, Mr. or Ms. Member, but we don’t.”
We lost faith that any of our members really get the concept of being an owner anymore. We have been told ownership is a concept that is just too hard to grasp, and too elusive to hang much faith on anymore. We are not even sure how to pose the question, list the events owners might judge us on, or communicate real ownership ideas. Those ideas seem so confidential, or even secret when our examiners or business consultants warn us about too much owner sharing. “Who would ever want to own a business and its liabilities today? Clearly this cannot be something to hang our relevance on. Trusting owner loyalty and hanging our hat on our owners is a lost art form. And almost no third parties give it credit anymore, either.”
Before you know it, you’ve come to the realization that “Oh my gosh, we are just a financial service organization focused on our customers, based on good intentions, but maybe not the drive of our owners any longer.”
Owners foster and inspire growth, customers fuel it
Back to “Leapers.” The point of the inquiry from the NCUA was to ask me what products and services I believe leapers used to grow. What banking tactical products and services are the most important to the concept of leaping forward and are worthy of consideration for NCUA grants. On one hand I was happy that the NCUA was asking what do they need to do to help CUs grow from a tactical side—banking products and services that make credit unions competitive as financial service organizations. But on the other I was sad that they thought the reason credit unions grow is simply doing the things customers want.
Because if you ask me why credit unions grow from small to big it’s because they count on the members who know their community needs a cooperative solution. They grow because they have a core of owners with the qualities to endure the challenges of building a business. They grow because there is a partnership between members who sustain the financials as customers and members who feed the soul of the organization as owners. And if everything works right they grow because there are enough members who do both at the same time.
I have to believe that someday we will get back to the idea that ownership can be a sustaining factor in credit union cooperatives – and that CUs will do the work to build that real force as a lifeline for the future. Tell me why I’m wrong!