15 June 2010

I Still Dig the Diggers...But We Dug this Hole

We could blame the recession. We could blame regulators. We could blame consumers/bank competition/[insert your legislator/president of choice]/Wall Street/each other.

Whatever we choose to blame, I think we all realize deep down the rut credit unions find themselves in has been largely carved out both by and for credit unions. Lip service to our core cooperative principles, an unwillingness to hire (and pay appropriately) top talent, being way too slow to adapt to changes in the competitive environment, misappropriated budget dollars, gross negligence regarding our corporates (from the elected to the electorate), and a hell-bent determination to follow as opposed to lead in the marketplace have much more to do with the predicament we find ourselves in than any external factor. If we are going to dig out of this rut, we need to make a few things happen:

1) We need to reevaluate our staffs (from top to bottom). Do we have the right talent in place to make the necessary improvements to our operations? Are we willing to pay for it? Are we willing to capitalize on this golden opportunity to gobble up the amazing supply of skill in the job market right now? We have some of the best people in the world working for credit unions. We also have some of the least talented and skilled. If your team isn't cutting the mustard, now is the time to make a change. Don't forget to look in the mirror.

2) Work together. Fighting with each other over 6% of the marketplace is asinine. Cut it the hell out. Collaborate. I don't necessarily care if we grow market share at all. I do care, however, if we refuse to capitalize on ways to lower operating expenses. If you are truly interested in serving your members, then you should be tirelessly searching for ways to cut costs. An easy start to this would be eliminating as many duplicative processes/expenditures as possible between credit unions, trades, and membership organizations.

3) Find new problems to solve. Upper and middle class Americans with good credit have extensive access to affordable transaction, savings, and loan products. Done. Problem solved. Just as the world doesn't need another reality television show, coffee shop, or American Idol, we don't need another run of the mill financial institution. Start by reaching out to the 60 million Americans who are either unbanked or underbanked. Train staff to offer the services members need instead of the ones you want them to have. Put yourself in your members' shoes to uncover day-to-day problems credit unions may be able to help with. Launch.

4) Fix your pricing. We price products like we're banks. We're not banks.

5) Cheer up. We're special organizations trying to do special things. One of the best things we have had going for us over the past 75 years is our optimism. Don't lose that.


SCMS_Janine said...

Well said Matt.

Now it the time for generations working within credit unions to open up conversations, listen to each others ideas and thoughts, and collaboratively seek solutions to challenges. There is a lot of creative energy to tap into and lessons to be learned from each other.

A reminder to us all, the world is changing around us at a dramatic rate. Our experiences may not be all that relevant in today's market place. We all have to remain in a constant state of learning. Alone, it's overwhelming. Together, the future has not limits!

Lauren Mayhew said...

Love. Thanks, Matt.

James Robert Lay said...

Wow! This is awesome Matt and a perfect follow up to a creative session we recently had with a credit union.

To set the stage, they came in wanting to update their tag line. What followed was a 4 hour challenging conversation getting them to explore who they really are as a credit union both internally and externally.

This was an eye opening experience as we asked tough questions and they begin to see that what they thought would be a simple tag line refresh went much deeper and sparked many more thoughts and questions.

They found their were internal issues that needed to be addressed including lack of brand awareness and product knowledge among staff. This is right their with your point to reevaluate our staffs (from top to bottom).

As we do a lot of looking outside the credit union world to bring ideas inside, their are some really kick ass cultures that CUs can emulate and succeed with.

They also noted the only motivational for staff was monetary. The staff felt that "something was owed" to them by the credit union and should "thank them" for working there.

We also explored ideas that could help them rise above being another FI. Like you said the world is full of them. What makes you different? What makes you special? What will make your members be there in 5, 10, 15 years?

Jenn at our office got a gift card in the mail from Chase that would give her $200 just for opening an account and keeping it open for 6 months.

It's hard for CUs to compete dollar for dollar on that. CUs can also not continue to compete on the value prop of "great rates and great service". This is what everyone else in your market is competing on. And it may be true that your service does suck. Hard to admit but needs to be evaluated which goes back to the people in point number one.

When it comes to launching new products/services, I think a lot of times CUs and any orgnaization for that fact, get stuck in doing too much R&D, planning, strategy, etc. that by the time the product/service launches, the window of opportunity has passed.

I like to recommend a second approach. Create a product/service. Launch it. Test it. See how it goes. Revise and move forward. Just get it out there. This is the approach that 37 Signals has taken and has been hugely successful. Once again, CUs can look outside to grow inside.

Your final point about keeping optimism high I think runs everything. From both personal to professional. If you are negative, those around you including your co-workers and members will see this. This is death.

"Negativity does not promote creativity" .

Southern Cheesehead said...

so...I think you're trying to say that "we didn't start the fire"? :-) Maybe the Disclosures need to get on a remake of that song for CUs...things that make you go hmmm.

Southern Cheesehead said...

sorry...apparently I'm not quite as serious as everyone else, but I always like to provide a little levity. For the record, I agree overall and think we still have more holes to dig but so many are too scared to leave the comfort of the original hole.

Anonymous said...

Awesome post! Couldn't agree more with Jay's "negativity does not promote creativity." There are a lot of changes going on at our CU and it is hard to remain optimistic sometimes. But WE NEED TO! Honestly when I feel myself slipping in terms of optimism, I go to CU blogs, my CU twitter peeps, and the Filene research institute for an attitude adjustment. There are so many amazing people and ideas out there. It truly is a breath of fresh air at times.

Work together - there is a CU near us that is currently running a mass media mix with the message that they are better than other CUs. All I have to say is wow, and I live for the day I can talk with their marketing manager one-on-one to see where they are coming from strategically.

Reevaluation of staff - yeah. Point taken. The lack of competence/confidence and a sense of "being owed" is a direct product of a lack of brand awareness. Period.

Good stuff Matt. Thanks for the wakeup call as always. :)


Anonymous said...

To your last point:

In my organization we are experiencing low morale. We've been spoken to by management and the news is not optimistic: "times are hard, we can't give anyone a raise for a few years, we need to be selling loans but no one wants a loan right now, we need to market more but can't spend money..." Staff tries to rally. We've been told we shouldn't rely on management to help us rally, that's it's up to us.

It's a very lonely feeling. Like we are on our own, but are expected to give 110% to the org to get us through these hard times.

Yes, we are grateful that we have jobs with benefits, but that's not enough. We need to see optimism and drive from upper management. We need some inspiration.

Some of us are new to the CU industry. We aren't lifers yet. We are good at our jobs, but we could leave tomorrow if something better came along and not feel bad about it. Does this make us bad employees or is it partially management's responsibility to help us appreciate our 75 year old legacy?

Shawn Temple said...

Spot on Matt. The overwhelming majority of managers & executive staff of any industry, certainly including ours, refuses to take a hard look in the mirror, experience a reality gut-check and make the changes required to move forward.

Our industry has a long history of wishing for the stars but not funding & recruiting the talent to make it happen. It was mind-boggling at one point...now it's just mind-numbing.

People are SO afraid of change, they would rather die in the mediocrity that will eventually close the doors on the last sliver of opportunity the business, and possibly, the industry has left.

In my tiny opinion, a huge shift in thought processes, behavior, direction, and action is--and will be--needed to get our industry out of the aforementioned hole. Significant, scary change is imperative.

Thanks for sharing.

Monica Ginder said...

Matt - great post as usual!

I agree whole heartedly with your points.

Staying positive/happy helps with cooperation and product innovation. It helps you open your ears and eyes to see what needs to fill in the community. Working together can also help you value your employees - showing you the stars; the ones that bleed the credit union philosophy.

You can attract more bees with honey than vinegar. Bees being the talent within the credit union, the current membership (retention), and of course potential membership and the community as a whole.

More doing is the next step for our industry as a whole :)