unCUlturers: musings on organizational culture & development (and stuff about credit unions too)
Ed Brett, of British Columbia’s Westminster Savings Credit Union, spoke recently at the Credit Union Water Cooler Symposium (CUWCS) in Fishers, IN. I found myself wanting to stand and applaud much of what he said, though in the interest of being transparent, I had that impulse multiple times during the CUWCS. Ed’s argument is one I’ve made myself in regards to the credit union world at large, and even to my own credit union. For being relatively small, a lot of credit unions seem to conduct business as if they’re very large, cumbersome organizations; and I’m not entirely sure why that is. It’s likely a function of several different factors, but suffice it to say that when those factors come together, it’s like a perfect storm.

In high school, the varsity basketball team I played on didn’t have a ton of height. What we did have, however, was a tremendous amount of talent at the guard positions, and almost everyone on the team was at least fairly fast and quick. So what did we do? We played run-and-gun, press-for-four-quarters, adjust-on-the-fly basketball. We used what many teams would have seen as a disadvantage as an advantage. As credit unions, it’s imperative that we do the same. 

If you think about it, as the business world (and the world at large, for that matter) continues to speed up, it would seem that as credit unions, we have an advantage over larger financial institutions in that we can adjust more quickly to the ever-changing financial and economic environment. If we ignore this advantage, we do so to our own detriment.

Credit unions should be ahead of the curve in regards to utilizing technology to improve members’ banking experiences. We should be ahead of the curve in regards to embracing and cultivating healthy, unique organizational cultures. The time it takes for a product or service to go from inception to implementation should be far less for credit unions than larger financial institutions. Credit Unions should be able to provide a much higher level of products and services that are customized to their individual memberships. Credit unions’ training and development departments should be able to drop and deploy quickly with progressive, innovative development initiatives.

So why do we see the opposite as often as we do? Why do we see credit unions that have a difficult time embracing and driving change? Why don’t we see more credit unions taking advantage of their size in such a way that allows them to be agile, nimble competitors in the financial services market? 

11/14/2010 09:31:15 pm

Too many people celebrate the benefits of economies of scale. Far to few, however, embrace the value of economies of scope. Bank of America can never know members as well as a credit union can. So, instead of trying to look/be big, we should do a better job of leveraging "small". The vision should be: know our members better than anyone else, work like hell to solve their problems, and make innovation a core competency.

11/14/2010 09:35:26 pm

Many credit unions wait to copy what a larger bank does when utilizing that technology for their credit union becomes a necessity. The biggest problem facing our industry is that we're all waiting for someone else to take the first step and not being proactive.

11/14/2010 10:42:35 pm

@Michael - You are so spot on. Credit unions are fast followers and rarely early adopters or first to market. That's always baffled me - when the goal is differentiation, we wait for the big banks to do it so we can copy them.

Be good at one thing. Used car loans for example. It may not feel real sexy, so turn it up. Give classes to women on basic car maintenance. Partner with high schools to help educate teens on the importance of not only good credit but good driving records. Wash cars in the drive-thru. Let members sell their used cars on your website. Innovate.

That's all I got this morning - one cup of coffee down......Love your blog.

11/14/2010 10:57:48 pm

Well said and spot on. It often seems like everyone in the credit union industry operates like they are in a fraternity or sorority where you will be kicked out if you don't adhere to the conventional wisdom of the group. BUT the way to win is to get outside of the norms that everyone else thinks dictate success, take a few risks, and do something different.

This is my core concern for all CUs, and particularly the small and mid-sized. Few are willing to take chances and make the decision to be different. They all think they need to provide full service when we learn every day that small businesses can outperform large ones when they focus on doing something that they can truly do better than larger ones.

The key to success now and in the future (as it has been in the past) is to make the decision to not look like every other financial institution out there. To look at who is on your bus, get them in the right seats, and define what that team can do better than anyone else to meet the financial needs of their members...then start doing that and only that. Eliminate anything that does not fit and watch your CU grow!

One easy and familiar example of a business that has done this is Southwest Airlines. Their strategy is to be THE low fare airline. It drives everything they do and they have carved out a powerful and ever-growing niche by doing that. They don't add things services or fees that will violate that strategy. They have built a team of people committed to it. And they march to a different drummer than the rest of the industry.

Credit unions can learn from this...and need to take similar actions to create their futures. Period.

11/15/2010 07:53:16 am

@Matt - Absolutely. Right on dude.

@Michael - I couldn't agree more. Why not let them chase us every once in a while?

@Denise - You're right. Be good at simple things; then innovate. Thanks for stopping by, and the kind words.

@Michael H - Right on.

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