2 x 2 x 2 is Too Long

“2 x 2 x 2 is 2 Long” by Jeff Rendel, Certified Speaking Professional

“Thanks for your order, Jayne. We’ll send you an update when it’s ready for shipping.” “Great news! Your order has shipped and will arrive early! Track progress with this link!” “Your order was delivered! How was it? Rate us here!”

All true texts from actual orders and real customer experiences. We come across this kind of instant engagement in many retail incidents every day. A pickup order is ready. A boarding pass is now available. An Uber is arriving. You left something in your Amazon Cart. The notifications are designed to engage and produce action. They further relationships, establish connections, and create sales. It’s onboarding at the speed of today’s retail consumer.

Onboarding in credit unions has traditionally followed the 2 x 2 x 2 method: two days for a welcome message; two weeks to check in on account setup; and, two months to send a targeted marketing message. The process works; it just needs to work faster. As one who argues that credit unions should lead at the speed of members and be outstanding students of retail, perhaps 2 x 2 x 2 should represent “Two minutes. Two hours. Two days.”

Imagine a scenario where a new member, in the branch and setting up an account, received a text message that read: “Your debit card is ready and in your hand. Follow this link to finish setting up.” That’s two minutes after the account opening. Two hours later: “Check out these features on your new debit card,” as a link leads to card valet features and instructions. Two days later: “You’re already earning rewards with your debit card. Congratulations! More rewards are just a tap away!”

Or, a setting where a long-time member applies for a new car loan via your mobile app. Two minutes later: “You’re approved! Follow this link to e-sign your documents!” Two hours later: “Here’s all you need to take to the dealer! Download here. ABC CU has your back!” Two days later: “Nice ride! Send us a pic! And, check out ways to protect those new wheels with insurance that rocks!”

Members, also active as retail consumers, anticipate and act on this kind of support. Like it or not, credit unions are in the retail business, where expectations are high. Regardless of business, consumers’ desires remain the same: they don’t alter from retail establishment to retail establishment. Members expect you to be appreciative, committed, consultative, intuitive, personal, and simple as you expand their experience. They encounter this every day with Amazon, Apple, Chick-Fil-A, Google, Netflix, and, hopefully, your credit union.

Yes, the Compliance Department will have a say: always has, will, and should. IT will want to ensure security; and, Marketing will want to see smooth synchronization with your core and CRM. This is real-time banking and a natural progression in the member experience. As students of retail and leaders in service, the next phase of the member experience is simpler, smarter, and faster. Two months is a lifetime. Two weeks and you are last week’s news. Look for ways to serve, engage, and market to your members as well-timed partners in their fastmoving expectations of your commitment to them.

© 2023 by Jeff Rendel.  All rights reserved.

Jeff Rendel, Certified Speaking Professional and President of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; www.jeffrendel.com; 951.310.7275.

Embrace the Red

“We need you to push our limits this year,” said a credit union CEO as we built an agenda for a few days of strategic thinking, dialogue, and planning with senior executives and the Board of Directors. “We’ve been successful, but our members deserve more from their credit union. What can we create and do to drive more value to their relationships with us?”

We built the framework for our meeting around a model exhibited by the US Navy. In general, several years ago, the US Navy embarked on a strategic initiative to increase the number of ready F/A-18 Hornet fighter jets from 260 to 341 within one year. One year. A 31% plus increase to move out of always being behind schedule (consistently unavailable assets) in fulfilling part of its mission. “Embracing the Red (negative indicators of progress on strategic measures of success) meant pushing leaders to undertake innovative approaches and a culture of rapid learning, testing, and execution. You can read more about this model in “Lessons from the US Navy on Building a Culture of Learning” in the Harvard Business Review (hbr.org).

“Our ‘Red’ to embrace was member relationships,” stated the CEO. “While our number was good (according to industry comparisons), it wasn’t great (according to our standards). We chose to increase our metric 50 percent over two years. That kind of success would result in the byproduct success of increased assets, revenue, and profits, but our focus was one number. Now.”

Three elements drove this credit union’s path to pushing its own limits.

• A “Get Real” goal. Setting an increased membership, loan production, or profitability set of goals was not enough. Those would not inspire a team to chase something that seemed out of reach. “When our members experience and realize our passion for their success,” replied the CEO, “the new and expanded business will develop. If we want members for a lifetime, we had better measure and earn an increase in the lifetime value of each member’s relationship.”
• Data-driven decisions. So many points of data, so little time. Through rigorous analysis (and some AI to help the review), two significant measures correlated most with loyalty: products and tenure, with tenure being the measure most connected with loyalty. Holding a product was a great start, but remaining with the credit union allowed for time to market and deepen relationships. Time + consistent marketing + service first = products and relationships. This formula, with “time” as the leading KPI would drive all efforts and plans.
• Solutions-only. It’s easy to get mired in details, especially specifics that indicate a project will take longer than anticipated or chart a different course. But, when leadership at the top (Board and CEO) has determined the top strategic priority, solutions must surpass resulting challenges. “As a leadership team, we shifted our focus to ‘How can this be done?’ Rather than assigning blame to people, time, or resources, we decided to collaborate and learn how we could continuously improve and encourage accountability for results,” said the CEO.

Understanding baseline performance is a key principle in strategic planning, as is leveraging data to comprehensively understand performance drivers and targeted interventions for improvement. However, leadership is a pivotal element in strategic planning, emphasizing motivation and team-focused actions over individual administration of responsibilities.

But, “embracing the red” may be the biggest differentiator toward reaching strategic success. “Like many credit unions, our strategic scorecard shows progress as red, yellow, and green,” shared the CEO. “We like green indicators of progress (who doesn’t?), but having a goal in red, one that is seriously important, but feels amazingly out of reach, improved our ability to focus, decide, and execute. ‘Red’ means we are stretching, striving, and – over time – succeeding.”

As your executive team builds out details to your strategic plan, consider pushing your own limits as business builders. What single measure of strategic success would put your credit union well beyond its mission to members? What “Red Zone” deliverable to members would drive your team to build an institution members choose first and foremost? Consider “embracing the red” as a part of your strategic plan and its execution. Odds are good it will lead to plenty of green.

© 2023 by Jeff Rendel.  All rights reserved.

Jeff Rendel, Certified Speaking Professional and Principal of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; www.jeffrendel.com; 951.310.7275 (mobile)

Building a Future-Focused Board

Credit union boards have a lot on their plates: safety and soundness; fiduciary responsibilities; and, ensuring compliance with laws and regulations. At times, it feels like the job of the Board is more about reviewing the past than reflecting on the future. Based on conversations and advisory services with dozens of highly performing credit unions’ boards, focusing on the future is the prominent habit of these boards and how they prioritize their governance activities.

“Because we doubled our assets and profitability over ten years did not imply we needed to double our Board’s workload,” shared the chair of a Midwest credit union. “The Board invested the same amount of time as in the past, but we were more focused on scanning the future and creating strategic value for our CEO and members.” This attitude was the same in other highly performing boards; all understood and acted upon the perception that their highest and best use was shaping their agenda and conversations, primarily toward the future.

Even more interesting was how these boards arranged their schedules and actions. Leading areas of focus were strategic planning, direction of major capital investments, and CEO retention and succession planning. “We didn’t overlook our duty of care with respect to compliance and financial matters; rather, we engaged outside professionals to assist us in understanding results, risks, and exceptions that required Board action,” said the board chair of a Florida credit union. “This practice allowed our Board to become more strategic in focus. We realized this would be a practice to follow as our credit union grew in size, complexity, and awareness.”

The CEOs of these credit unions welcomed their boards’ dedication to strategy, potential business models, and enterprise risk. In shifting focus away from the weeds of operations, the CEOs built even stronger relationships with boards. “I look to the Board as a ‘sounding board’ for new ideas for the credit union or clarity about decisions I will make,” shared a Pennsylvania credit union CEO. “My Board helps me appreciate perspectives, inquires about risk mitigation, and asks where the credit union should take additional risk. Ultimately, I will make a recommendation or decision; but, the Board is of utmost value in my decision-making process.”

As these boards set new standards and expectations for their own operations, accountability and evaluation became key. At the fundamental level, board members were expected to contribute to discussions, engage in activities, and refresh their own professional capacities. “To our members, their credit union, and the CEO; we (the Board) owe the finest governing team at their service,” said an Oregon credit union board chair. “We invest in each director and expect that director to grow with the credit union. Any variation is considered during the renominating process. Our members deserve the highest quality of voice in governance. We will deliver.”

Self-evaluation systems prevailed with each board. Some boards used tools designed internally or from industry resources. Others engaged with outside support for comprehensive evaluations, quantitative surveys, and qualitative feedback from each director. “By far, an external self-assessment was the biggest ‘stretch’ this Board has ever set for itself, “ said an Ohio credit union vice chair. “Initially, many directors feared what we might hear about our performance. Instead, we learned the love and care we have for our credit union became even stronger as we discovered new ways to grow individually and collectively.”

As your board considers ways it can boost service to members and shift its attention to the future, think about the observations from the chair of a West Coast credit union. “We focus on what our credit union needs to do to serve the next 100,000 members rather than only what we did to serve our existing 100,000 members. I wish we would have embraced this practice ten years ago.”

Her message is simple: regardless of size or market, boards need to spend the bulk of their time looking forward, rather than reviewing events and results in the past. “While we want to understand outcomes of yesterday, our larger role is to work with our CEO to take the credit union to existing and new members and markets, advancing our mission and vision.”

© 2023 by Jeff Rendel.  All rights reserved.

Jeff Rendel, Certified Speaking Professional and President of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; www.jeffrendel.com; 951.310.7275.

AI Means “Action Item”

For Credit Unions, AI Means “Action Item”

In strategic planning discussions over past several years, the topic of artificial intelligence (AI) has moved from “Interesting to Know” to “What Do We Do?” Directors and executives have considered the range of options with AI: disruption, insights, automation, opportunity, and more. Dealing with AI has moved from a position of defense (What do we do?) to offense (What can we do?).

Credit unions can leverage artificial intelligence (AI) in numerous ways to improve their operations, expand member experiences, and make data-driven decisions. Here are five ways credit unions can utilize AI:

Fraud Detection and Prevention: AI can be utilized to detect and prevent fraudulent activities by analyzing vast amounts of member data in real-time. Machine learning algorithms can distinguish patterns, anomalies, and suspicious transactions, helping credit unions proactively mitigate fraud risks and protect their members’ accounts. In an era where trust drives decisions, members value innovative ways you look after their best interests.

Personalized Member Experiences: AI-powered systems can analyze member data and behavior to provide tailored recommendations and offers. By understanding individual preferences, spending habits, and financial goals, credit unions can deliver personalized services, such as individualized loan options, investment advice, or savings plans, nurturing stronger member engagement and satisfaction. With AI, you can provide a personal dashboard toward financial success – one member at a time.

Chatbots and Virtual Assistants: AI-driven chatbots and virtual assistants can augment member support by providing instant responses to frequently asked questions, assisting with routine transactions, and guiding members through many financial processes. These AI-powered tools can operate 24/7, improving response times and reducing the burden on credit union staff. AI allows members to self-serve for regular transactions, allowing your member-facing leaders to focus their attention, and professional development, toward meaningful and consultative conversations with members.

Risk Assessment and Underwriting: AI algorithms can automate and streamline the risk assessment and underwriting processes for credit unions. By analyzing applicant data, financial histories, and credit scores, AI can assess creditworthiness, predict default risks, and expedite loan approval processes, making it more efficient for credit unions to offer loans and other financial products. AI also allows your lending function to consider non-traditional data points and make more loans with higher, risk-adjusted returns. AI allows your credit union to say “yes” to more members more often with more speed. Now, that’s member service.

Data Analytics and Insights: AI-powered analytics platforms can help credit unions make sense of their substantial data repositories. By leveraging machine learning algorithms, credit unions can uncover meaningful insights, identify trends, and generate predictive models. This can inform strategic decision-making, improve marketing campaigns, optimize resource allocation, and identify potential growth opportunities. AI makes your operations more efficient, improving the bottom line. As a result, your capacity to grow and reinvest in members increases.

It’s important to note that implementing AI solutions requires careful consideration of data privacy and security, along with ethical considerations. Credit unions should ensure they have robust governance frameworks in place to protect member data and maintain transparency in AI-driven processes. It’s clear that AI has an important place in financial services and the member experience. As you hold strategic discussions about the next phase of growth and success for your credit union, move AI to the forefront of the agenda and determine the most practical ways to generate action items around AI.

© 2023 by Jeff Rendel.  All rights reserved.

Jeff Rendel, Certified Speaking Professional and President of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy.  Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; http://www.jeffrendel.com; 951.310.7275 (mobile)

The Sounding Board

“The ‘Sounding’ Board” by Jeff Rendel, Certified Speaking Professional

“We don’t pay our CEO $XXX,XXX (dollars omitted) per year to ask us for ideas. We expect him to bring us vetted, ready-for-action strategic choices and recommendations for discussion and decision,” stated a director at a national board development conference. It brought back good memories of a discussion with Arne Sorenson (deceased 2021) during his time as CEO of Marriott International. “I look to my Board as a sounding board. Directors sharpen my thinking, remind me of risks, and encourage me to take appropriate chances. They expect me to lead as an expert in my industry. If at any time I go to my Board looking for new, strategic ideas about the future of Marriott, they have the wrong CEO.”

It’s a question that fills conference breakout rooms and formal planning sessions: ‘What is the right role of the Board with respect to credit union strategy?’ Where one Board feels a “hands-on” approach is best, another Board looks, first, to its CEO. How are credit unions getting this process right? In listening to scores of credit union executives, three factors emerged as drivers and shapers of sound systems.

Ask for the Board’s feedback on challenges and opportunities it finds most crucial. Many credit unions use their strategic planning sessions to gather these concepts. Often, the CEO and her or his team will lead conversations on a variety of appropriate subjects – growth, revenue, mergers, new products and lines of business, scale, technology, brand, etc. An applicable pre-planning tool asks each Board member to provide one topic he or she wants included in the strategic conversation. This allows the Board to make certain that its important interests are recognized and reviewed, as well as consider the CEO’s reasoning as to the next level of strategic progress for the credit union.

Expect the CEO to develop a strategic approach and plan, bringing back schemes that incorporate the opportunities and challenges originally discussed. One CEO shared that her Board knew that growing revenue was important, but – as a voice for members – wanted to ensure that core banking services were zero- to low-fee. Another CEO described that his Board agreed that growth in new markets was needed, but expected the CEO to define the most likely markets for long-term success. The “hands-on” was left to the CEO as the working professional to determine operating matters such as pricing, resources, investments, and trade-offs.

Communicate the preferred recommendation to the Board. Here is where the Board can bring a lot of value by asking beneficial questions. For example, do the potential solutions address opportunities and challenges discussed earlier? Do the plans seem sensible given scenarios and assumptions? Do the strategies feel too much of a stretch given the economy, resources, capital, etc.? Do the ideas seem too conservative for the opportunities presented? Might there be room for more risk? What are the trade-offs (even if time-based) that help the credit union deliver on the most important aspects of strategy? 

Boards provide extraordinary value to the members they represent and the credit unions they serve. Safety and soundness is primary, but a close second is the legacy value of always evolving and enriching experiences and results. This requires frequent strategic conversations to establish that value is continuously delivered for current and soon-to-be members. As your credit union continues to change for its members, consider incorporating these ideas to enrich your Board’s role in strategy and the benefit it provides your members and CEO.

© 2023 by Jeff Rendel.  All rights reserved.

Jeff Rendel, Certified Speaking Professional and Principal of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; www.jeffrendel.com; 951.310.7275 (mobile)

“A New Employee Value Proposition”

“The Great Resignation,” “Quiet Quitting,” and “Bare Minimum Mondays” are just a few of the workforce phrases we learned, heard, and worked with over the past several years. They compelled managers, leaders, and organizations to rethink their formulas for attracting, keeping, and engaging the workforce. Altering those methods asked that leaders address more than material aspects of a job and, instead, focus on what workers needed to thrive over the long term.

In the January-February 2023 issue of Harvard Business Review, the article “Rethink Your Employee Value Proposition” details how material offerings should be balanced with opportunities to grow, connection and community, and meaning and purpose. It joins the need to balance the short-term with the long-term, as well as the individual and collective. In working with dozens of credit unions and their strategic talent-focused initiatives, many are finding ways to win the War for Talent by following such a model.

Specifically, they are:

Rewarding their employees with Material Offerings like competitive compensation packages that pay employees for their contributions and expertise. They offer reasonable salaries, vacation, paid time off, performance-based incentives, retirement plans, and comprehensive healthcare benefits. They also emphasize additional perks such as flexible work, wellness programs, tuition reimbursement, fitness memberships, and (drumroll, please) – housekeeping services. Sometimes, you have to get creative (it’s a hit, by the way).

They also create Connection and Community opportunities right away to involve employees in credit unions’ activities in the community. Yes, it’s paid time in the community because it is strategic in value and executives have realized that strategic initiatives in the community require investment – time, resources, and people. One CEO shared, “We discovered that paid time in the community led to better performance in the office. Staff realized that time out of the office necessitated better training, time management, and communication.”

Longer term, Growth and Development plans focused on enhancing success with increased knowledge and skills of their employees. They committed to continuous learning and professional development with opportunities for training, certifications, workshops, and conferences. They offered career advancement programs, mentoring, and coaching to help employees reach their full potential. A senior HR executive said, “As we encouraged employees to take on new challenges and grow within the organization, their excitement and commitment grew. Our investments have ranged from weekly web-based training to a doctoral degree. In each case, helping employees get better – at their level – created improved results.”

Meaning and Purpose was the glue that held the puzzle of employee engagement together. Working for a credit union offered employees the opportunity to make a positive impact on the lives of members and the communities they serve. They understood and embraced missions to create and deliver financial well-being for all through products, services, education, and experiences. A CEO explained that “Our staff saw the difference we made in so many lives and small businesses. From an extra $100 per month in a young family’s budget to an extra $75,000 per year in a small business’ cash flow (which helped fund a new job), we sought to deliver meaningful experiences to our members – one member, one dollar at a time. It all added up and our entire team understands the whole of the individual differences we make.”

We talk a lot about delivery in credit unions. Delivery is not just digital and branch. Delivery is also human – member-facing and internally with colleagues. Attracting and retaining top talent helps deliver your credit union’s mission, vision, values, and strategic initiatives to your members and among your leaders. Consider adding some long-term to your short-term in your employee value proposition, as well as balancing individual growth with collective opportunities. Like many credit unions, you will discover a new level of member satisfaction, professional commitment, and capacity for growth with the team you lead.

© 2023 by Jeff Rendel.  All rights reserved.

Jeff Rendel, Certified Speaking Professional and Principal of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; www.jeffrendel.com; 951.310.7275 (mobile)

From KFC to CXO

“From KFC to CXO” by Jeff Rendel, Certified Speaking Professional

One never knows from where the next credit union leader will emerge. He could be a front-line leader in the contact center. She could be a cybersecurity specialist in IT. Or, the next leader could appear during your lunch break. It happened for two credit unions.

A manager for a credit union in California headed to lunch one afternoon, deciding upon KFC. It was one of those days at KFC. More than half of the scheduled staff were not present. The lunch hour was hectic. One KFC professional was wearing many hats that day: drive through, cashier, line cook, outdoor delivery, clean up, and the actual hat as part of the KFC uniform. The credit union manager noticed the positive outlook, service-based attitude, and old-fashioned hustle. She presented her business card, inviting the KFC professional to call her for an employment interview, if interested. He was just the kind of service-minded professional the credit union would love to have on board.

He set up the interview with the credit union, driving to the credit union following a shift at KFC, while still wearing the KFC uniform. “I was raised in a family that valued hard work. You show up. You give your best. You help where support is needed. You save your money. You repeat the next day,” he shared. “I didn’t know how to interview or dress for the occasion. I just knew how to work hard, and the credit union manager valued this work ethic.”

The interview went well, he was hired, and the rate of pay was greater than KFC. While the work attire may have changed, the work ethic did not. Fast forward through several roles, and he is now the executive in charge of leading the credit union’s retail sales and member experience.

Similarly, dinner a few years ago with a Pennsylvania credit union CEO provided an incredible and exceptional dining experience with a recent college graduate as our attendant for the evening. Pleasant interactions; menu and wine list consultations based on our preferences and her understanding; and, an impressive level of professionalism and leadership highlighted the evening. She genuinely exhibited her commitment to an experience that would yield results right away, a return visit at some point, and positive word of mouth marketing.

“I’m the CEO of a credit union in this county,” said the CEO. “I am truly impressed by your dedication to service and the customer experience. I don’t know if you are looking for additional or new employment, but I am certain you would be a great fit at our credit union.”

“I don’t know anything about business or banking,” she replied. “I’m not sure how much value I might provide.”

“We can teach you the ins and outs of banking in 90 days,” replied the CEO. “What can’t be taught right away are your excellent communication skills, rapport with customers, and ensuring we remember this experience as one of the best. Here is my card. My direct number is listed. If you find yourself interested, I will welcome you as a part of our team.”

Two months later, she called. She was hired. And, today she is an assistant branch manager.

In an era where we discuss The Great Resignation, Quiet Quitting, Bare Minimum Monday, and The War for Talent, there are talented professionals serving customers in the world of retail. Much like we watch the retail industry for trends in consumer preferences and experiences, we can also look to the retail environment for service-focused professionals committed to outstanding experiences.

The next time you are out, bring your paper or digital business card. Watch for exceptional service and a customer-first level of dedication. You may just meet the next leader of member excellence in a real-world setting. If timely, appropriate, and opportune, share your information and see where it leads. Your credit union’s next leader of service to members may be, literally, right around the corner.

© 2023 by Jeff Rendel.  All rights reserved.

Jeff Rendel, Certified Speaking Professional and President of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; www.jeffrendel.com; 951.310.7275.

Common Themes Among High-Performing Credit Unions

“Common Themes Among High-Performing Credit Unions” by Jeff Rendel, Certified Speaking Professional

Over the past three years, engagements with more than 100 high-performing credit unions revealed several uncommon and common themes. Uncommon? Size, location, field of membership, and charter. No two credit unions were alike, a testament to the localized and unique superpowers of credit unions. In common? Read on.

Defining high-performing credit unions was simple: a high ROA (1% and above) and sound net worth ratio (10% and above) yielded a return on equity (ROE) of 10%. In short, these credit unions had the capacity to grow 10% in assets each year with cash flow and profits from current operations. Membership growth was impressive (about 7%), but member lifetime value (revenue and profits) drove long-lasting success and sustainability.

So, how do they generate such a first-rate ROE? All, or close to, the elements listed below.

Lots of loan production. Back in the day (2019), loans-to-shares told the story of asset utilization. Enter stimulus funds in 2020-21 and that ratio takes a break. Instead, a focus on greater-than-normal loan production offset the effects of share growth and rapid repayment speed. When loans-to-members approached saturation (around 70%), expanded fields of membership drove strategy. In all cases, these credit unions never decelerated marketing. Instead, they invested in more promotion.

Twice the industry norm for non-interest income. This was not about account maintenance fees; the basics of banking were pretty much free for all members. However; interchange, overdraft, and insurance sales dominated non-interest income. Strategies included instant debit cards, alternative products for underserved markets, and a wide array of insurance products (loans, homes, and phones). Most important, each product delivered value to a member in great excess of the fee exchanged.

Low operating expense ratios. Revenue was the driving factor in strategic initiatives, but minding costs was a common business practice. These credit unions aimed to utilize automation, scale, and outsourcing to capitalize on a classic case of comparative economics. In-house work was dedicated to highest and best use of resources; all else expanded the use of partners for better returns and results. Growth and technology produced expense ratios that fell, while service and revenue metrics rose.

Lots of digital services. From mobile access to marketing to engagement; members could take care of business – start to finish – via mobile. Member experience was high; administrative costs were low. While branches remained relevant; they were advisory in nature with members preferring self-service. Digital wasn’t limited to members; operations benefitted through automation, data decisioning tools, and artificial intelligence. A credit union-wide, digital-first philosophy was prevalent.

Business beyond retail. Retail deposits and loans built a business; new markets to serve extended and expanded the brand. Commercial lending, insurance services, wealth management offices, trust divisions, and cannabis banking took the proven model of a credit union to new markets ready for growth. Every credit union generated significant revenue and profit from at least one of these ventures; and susceptibility to disruption lessened with expansion into these peripheral markets.

As you expand, refine, and enhance your credit union’s business model, consider the practices of credit unions experiencing and poised for growth. These methods aren’t reserved for a small set of credit unions; they are followed by a wide array that are delivering and receiving value every day. These credit unions are focused on creating value for members and – as a byproduct – are rewarded with profit, invested back into members and the credit union they own and choose for the long haul.

© 2023 by Jeff Rendel.  All rights reserved.

Jeff Rendel, Certified Speaking Professional and President of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy.  Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; www.jeffrendel.com; 951.340.3770.

Relationships Drive Results

“Relationships Drive Results” by Jeff Rendel, Certified Speaking Professional

Sometimes, excellent market research is, literally, on the other side of the building. Just a few months ago, a West Coast credit union management team gathered to develop a more detailed set of business plans and actions to implement its larger, strategic plan. Interestingly, on the other side of the meeting complex, a large, regional bank was holding a meeting of around 100 branch managers. As the credit union’s managers worked on some operating tactics with their table mates, this facilitator decided to take a walk and eavesdrop on the bank’s branch managers. How often does this opportunity present itself?

“We are salespeople. We are self-motivated. We earn high commissions. We build relationships.” So said the regional head of the bank’s branch managers. But, wait; there’s more. “Don’t tell me you’re a banker if you don’t know how many HELOCs you sold last month.” Every point he made had some level of career value; it just seemed the priorities were way out of order. It sounded more bank-centric than customer-centric. The focus seemed to be on finding ways that the customer might make the bank and branch manager more successful. Now, back to the group to relay the findings.

Fresh with intel from on-the-spot investigation, the credit union’s managers began to define effective retail priorities to create a strategic difference from one of its major competitors. The bank’s focus was, clearly, revenue with relationships as a byproduct or side effect. While the credit union’s managers understood that profits were necessary to sustain operations, invest in members, and remain well-capitalized; they also understood that short-term, one-time earnings were not sustainable for long-term success.

Often, a path to differentiation is doing the opposite of your competition. Serving the same set of consumers as the bank, the credit union built a set of retail priorities that presented a different message to consumers (and soon-to-be members).

• We value relationships.
• We want members to win.
• We create solutions that make a financial difference for members.
• Our credit union grows only when our members grow.
• We define our success through member success.

From this message, re-worded as “Promises to Members,” the credit union built a new approach to true member centricity. Tactics included: enhanced communications skills for member-facing professionals; micro investments in community activities (think walking groups, Friends of the Library, and car washes); optimization of payments technology; and, continuous, targeted marketing and financial education. Measures included: member feedback on experiences with staff members; initiatives, hours, and financial support in the community; debit and credit usage; member testimonials; and, cumulative value of earnings and savings realized by members.

Member-centricity, at its core, has the member at the center of all. As we create positive experiences and genuine relationships with members, communications with members are welcome. As communications are accepted, we can discuss, develop, and congratulate members’ successes. As we focus on the success of members; continued, increased, and referred business develops. And, as our credit unions’ business grows, so grows our professional rewards. But, only when the member wins first.

Relationships drive results. Success – operating, financial, and strategic – is a byproduct of member centricity.

© 2022 by Jeff Rendel.  All rights reserved.

Jeff Rendel, Certified Speaking Professional and President of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; www.jeffrendel.com; 951.310.7275.

Volatility: A Perfect State for Credit Unions

“Volatility: A Perfect State for Credit Unions by Jeff Rendel, Certified Speaking Professional

A few years ago, the Harvard Business Review published an article about the states of disruption across all industries. Retail banking fell into the category of “High” levels of current disruption and “High” susceptibilities to future disruption. The authors referred to this as a state of volatility. Where most might consider banking durable, it’s quite the opposite. Remember the days when credit unions focused on consumer loans, banks on business loans, and savings and loans on mortgages? Gone. Countless credit unions offer every product once considered the exclusive domain of a specific kind of institution. That’s great for member acquisition. But, remember; when one member is acquired, that member left, or decided against, another financial institution. Volatility is a two-way street.

Recently, a Board member asked what state of disruption was right for credit unions. After thoughtful discussion, all present agreed that “volatility” was the best state. Uncomfortable as it might be, it compels credit unions to constantly recognize, seek, and create change for members. Another director commented that the history of credit unions was founded on disruption: new entrants into an established market offering products and services to overlooked, ignored, and avoided segments. Today, more than 130 million credit union members in the U.S. prove that disruption works.

Disruption has always been with us – online banking, mobile wallets, blockchain, Fintech, and the list will go on. It’s here to stay. Perhaps it’s time for credit unions to actively recognize the opportunity that accompanies volatility and disruption, building this mindset shift into culture and strategy. Many credit unions actively observe other retail services for insights into changing consumer expectations and service standards, making adjustments expected from members. Other credit unions research new and established FinTech companies that produce business intelligence into experiences and delivery methods that appeal to consumers, as well as opportunities to introduce artificial intelligence and automation to operations.

Further, exploring Fintech partnerships and investments (within and outside the credit union industry) can provide new sources of value for members, revenue for your credit union, and access to the technology that sets the tone for the future of financial services. And, to add more volatility to the mix: charter expansions, mergers, and bank acquisitions highlight that the credit union industry is prepared to continue as a unique, but always upgrading, entrant into an established market.

Many credit unions realize that, as the industry swiftly advances, systematic monitoring and enrichment of strategy is exceptionally important. One credit union CEO recently shared that she considers disruption, in partnership with volatility, as an active tactic rather than an outside threat. Making the opportunity that comes with volatility a part of her credit union’s culture, she assembles the executive teams each month for half-day strategy sessions focused on: volatility authenticated by trends; opportunities to “intentionally adjust for excellence” (her term for planned disruption); and, making real-time refinements to operations. This has allowed her credit union to be nimble and always on guard for new ways to be an improved partner in members’ financial lives. The results? Double digit growth; and ROA, ROE, and a net worth ratio nearly twice the industry average.

If volatility and disruption have always been with us, perhaps the committed pursuit of the duo is spot-on. It can deliver the next point of distinction that your members are counting on for you to present. Some have discovered that the ever-changing nature of our business, and members’ expectations is best met by consistently exploring new ways to add value for members. Volatility is the perfect state for credit unions.

© 2023 by Jeff Rendel.  All rights reserved.

Jeff Rendel, Certified Speaking Professional and President of Rising Above Enterprises, works with credit unions that want entrepreneurial results in sales, service, and strategy.  Each year, he addresses and facilitates for more than 100 credit unions and their business partners.

Contact: jeff@jeffrendel.com; www.jeffrendel.com; 951.310.7275.