“Focus and Finish” by Jeff Rendel, Certified Speaking Professional
Strategic plans are a lot like credit unions. If you’ve seen one; you’ve seen one. Fields of membership, business models, and competitive environments are diverse. Two-, three-, and five-year timelines are utilized. And, focal points are unalike – asset growth, market share, and member profitability to mention several. Yet, despite differences in methods and outcomes, numerous credit unions revealed that the most important drivers of strategic success are focus and finish.
Reaching out to more than 40 credit unions – from every asset category and 24 states, interviews revealed that the fundamentals of strategic planning have not changed – objectives, strategies, measures, and timelines are still elements of the particulars. What has transformed is the viewpoint of strategy, particularly when balanced between the CEO and board. A Colorado credit union CEO describes that: “Planning and execution is what we do as managers; that’s our job. We noticed the greatest benefit when our strategic process became more about ideas and less about numbers. Our focus shifted away from the balance sheet and toward the white board.”
Let’s discover more about your credit union furthering its strategic capability through focus and finish.
At credit union conferences, we banter about the “Shiny Object Syndrome.” In a quest to accomplish everything, we often achieve naught (or, at least, it feels that way). Yet, research confirms that the most successful companies, over time, are those that: select a handful of strategic focus areas; move forward and measure those extents relentlessly; and, recognize that year-to-year strategies may change, as long as progress continues toward the few areas of focus. Prominent management consultant Jim Collins’ shapes this standard in Great by Choice, a follow up to From Good to Great.
One Southeastern credit union CEO shared that his credit union learned the strategic power of “no” in order to gain clarity and focus “As we scrutinized what we could do, we asked ourselves what we should, initially, master. Our inventory of strategic priorities shortened from ten to two. By saying ‘no’ to eight priorities, we said ‘yes’ to two primary areas of focus. As we finish our two, we can set off toward the others.”
How are these credit unions establishing more focus into their strategic planning processes? Through discussions and experience with CEOs and directors, three significant practices surfaced: systematic and substantial discussions on ideas, issues, and trends; next level questions fixated on success beyond next year’s operating plan; and, ongoing strategic education for executives and directors.
Nearly every credit union interviewed dedicated a segment of each board meeting to strategic trends. Some credit unions surveyed board members ahead of time for their areas of interest; some focused on different departments or functions; and, some reviewed information from recent conferences attended. But, the information shared was not only for general interest and update. With each trend examined, CEOs informed their boards how the development might affect current strategy and that action was being taken or considered. Strategic updates became focused on actions and decisions rather than a string of industry happenings.
For formal planning sessions, many credit unions engaged outside facilitators and experts to assist in the planning program. Some credit unions retained economists, technology experts, or marketing authorities; all with the intent of helping to gauge the broad direction of financial services and courses that credit unions might follow. Often, a strategic facilitator was invited for her or his impartiality, lack of bias, and skill in ensuring that a thoughtful, balanced, and action-oriented discussion ensued. With or without an outsider present, the most important details for substantial discussions were dedicated to trends that represented opportunities for expansion and refinement of a credit union’s operations and chances for strategic success.
Next Level Questions
The lion’s share of strategic meetings centered on next levels of success. Where some time was invested in discussing the main operational objectives and goals for the coming year, more time was devoted to discussing major opportunities and decisions necessary for laying the groundwork for the next several years. One West Coast CEO explained: “Our discussions shifted from asking, ‘What are we doing to serve several hundred thousand members?’ to ‘What must we do next to serve one million members?’”
The Chair of one of the largest credit unions in the U.S. also described the importance of being exceedingly future focused in deliberations as a Board and with the CEO. “As we grew, we rapidly recognized that we could not inspect every operational aspect. It was too much to understand. While studying new housing permits and traffic patterns might be interesting, our Board partnered best with our CEO in ensuring the strategic focus was making progress and the CEO’s attention to detail delivered the projected results.”
For credit unions leaders to continue thinking strategically, they have a duty to educate themselves in the same fashion. At the practical level, leaders should subscribe to industry publications and take advantage of industry webinars and in-state or regional conferences. These opportunities provide leaders with fresh information, valuable networking, and a chance to learn about the next level of success in financial services. Strategic education wasn’t limited to only industry conferences, either. Many credit unions participated in retail-, consumer-, and FinTech-focused conferences, too, for insights on marketing, service, and technology.
Strategic education became more formal, as well. Many credit unions sought to ensure their leaders took part in schools and institutes that concluded with a designation or degree. More than an investment in the leaders’ education, it presented an investment for each credit union’s members. “If we continually strive to provide relevance and excellence to our members through products, services, access, and experiences, we should provide the same for our members’ elected and professional leadership,” said a Texas credit union CEO.
“I’ll take a one-page strategic plan that is well-executed over a 20-page marketing showpiece that never produces results,” said the CEO of a Washington-based credit union. The statement was further endorsed by another CEO who shared, “If your strategic planning process is adequate, but your implementation is exceptional, projects will proceed efficiently.” If fortune favors action, then action moves your credit union down the pathway of initiating, sharpening, and finishing strategic objectives.
In a November 2017 Harvard Business Review article titled, “Is Execution Where Good Strategies Go to Die?” the author prods that execution can be associated with capital reward (finishing a project) or capital punishment. He proceeds to describe that the difference between life and death of strategy is the execution beyond the planning process and into the organization. Tangible strategic success emanates when others have a stake in the results and a reason to finish.
How are these credit unions emphasizing the importance of finishing in their strategic planning processes? Three noteworthy methods emerged: CEO-led planning approaches; the application of scenario planning through many aspects; and, creating a culture of execution through executive, managerial, and front line levels.
Many credit union boards deemed the hands-on strategic planning process to be a principal function of the CEO and her or his team. “We expect that our CEO will create a strategic plan that will be presented to, and discussed with, our Board; and refined, if necessary,” said a Michigan credit union director. Her thoughts were reaffirmed by many other directors. These directors concurred that their chief role was ensuring that the current strategy was safe, sound, relevant, and attainable.
An effective method of steadying strategic execution and governance occurred when CEOs and executive teams proposed and presented working strategic plans to the board of directors. “They’re the experts, after all,” shared one director of an Ohio credit union. “We need to hear, from their executive know-how, where the credit union should focus its energies and resources.” However, the most strategic significance came after the working plan discussion and approval. “Considering what our CEO believed the credit union could accomplish over several years allowed us to deliberate what we would be preparing for during the succeeding several years.”
All credit unions engaged in scenario planning. Their processes followed a wide course, mainly with assistance from software. Some scenario planning followed a straightforward path of bottom line impact under various expansion, contraction, and interest rate scenarios. “The simplest way to test the financial merit of your strategic plan is to stress it,” shared a Virginia CEO.” “We needed to know the bottom line effect if we grew according to plan, faster than planned, or slower than planned, too. The same was true for interest rates and margins.” For these credit unions, scenario planning created confidence, giving CEOs a better understanding of decisions to make in different circumstances.
Scenario planning wasn’t limited to deposits, loans, margins, and revenue. Contingency planning for disasters was very useful. “For years, we knew what to do for a power outage during summer afternoons,” said a South Carolina CEO. “But, what about a major disaster – natural, economic, or manmade – that could affect our members and credit union for years. Could we survive; what decisions would we make; and, how might we prepare now?” In the spirit of cooperation, credit unions that had survived disastrous situations shared many details to help others understand the potential financial and operating consequences, adding value to contingency planning.
A Culture of Execution
“Strategy isn’t reserved for only the C-Suite and Board Room,” shared a Florida credit union CEO. “We involve all staff members in execution, especially at the branch and member-facing level.” Many credit unions discovered that strategy was best accepted and executed when the entire credit union was involved. Where strategic priorities were initiated at the CEO level, the practical execution was best administered at all levels. In fact, some of the best ideas regarding implementation came from those responsible for everyday execution.
One of the more effective finishing philosophies and tactics involved adding a bit of entrepreneurial zeal to the projects, tasks, and timelines that accompany all strategic plans. A Pennsylvania credit union CEO calls it the “Strategic Sprint.” The premise is simple: long term goals are best accomplished with short-term, 90-day “Sprints,” tied to the strategic plan. This adds a sense of urgency and energy to what can, often, seem like a very long process. Celebrating successes along the way gives all parties a sense of accomplishment and prepares them for the next “Sprint.”
“In preparing for battle, I have always found that plans are useless, but planning is indispensable.” Credited to U.S. President Dwight D. Eisenhower, the reference emphasizes that strategy should concentrate on direction. The material plan? It adjusts, especially when it meets reality, but maintains steady progress toward a set of end objectives. As credit union leaders – executive and governing – successful strategic results are best achieved with a commitment to focus and finish.
© 2018 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 leadership, sales, and strategy. Each year, he addresses and facilitates for more than 100 credit unions and their business partners.
Contact: email@example.com; www.jeffrendel.com; 951.340.3770.