Networks are everywhere. Whether we realize it or not, we have been engaged in perpetuating some form of network for most of our lives. Collaborative networks are a different breed and in recent years have been maturing. Collaboration is fast becoming a buzzword in many business design strategies. But what does it really mean to build something collaboratively? To use network collaboration as a means to accelerate business design?
CU*NorthWest, a technology CUSO, was founded in cooperation with CU*Answers to build its business under this strategy. As a part of the more global umbrella of cuasterisk.com partners, CU*NW continues to build skills of designing business in a collaborative network environment.
A Standing Intent
The essential foundation of this type of business design is a standing intent to collaborate . When faced with any new challenge, our first function is to seek out a collaborator. As CU*NorthWest was founded to bring the already successful CU*Answers business model to regional presence and governance, we have a ready-made resource. Although there are some franchise concepts inherent in our model, franchises are not truly collaborative in nature, as they leave little room for innovation and the knowledge transfer flows mostly from franchiser to franchisee. Instead, we spend our time seeking targeted innovation as driven by our customer owners.
More than just a corporate culture, a standing intent to collaborate at CU*NorthWest means that network partners should leverage a common technology layer. Beyond our shared core processing product ( CU*BASE), we share a common digital phone structure, intranets, security protocols, e-service technologies, third-party switches, and more.
This type of network lets us leverage almost every service we offer—making our network transparent to our customers and their members. It's all about reducing repetitive movement unless there is some benefit gained by deploying locally, and even then, keeping process and procedure common to facilitate more rapid resource sharing.
The Business Incubator
Offering the full menu of products and services in order to compete constantly raises the build vs. buy question. Within the cuasterisk.com network, CU*NorthWest can always offer a product or service even if it is not deployed locally. We build the business of our partners, and once our customer group participation reaches a level to self sustain, we harvest our portion for local deployment. Collaboration is done by relying on the excess capacity of partners until the income stream from these initiatives can be purchased locally.
This requires that those who collaborate do not put up barriers to entry or exit from the resource sharing pools. This does place some higher demand on the budget analysis for at-risk revenue, as it relates to the incubation of businesses for network partners. The network of collaborators must always be focused on the mantra: my partner's success is ultimately my success .
An Essential Focus
That mantra goes to the heart of a collaborative network business design. It's not easy, because humans are inherently territorial, protectionist, and competitive. It must be constantly reinforced that together we build something greater than alone. The value to my partners for my success exists within the driving principles of excess capacity, unique product and service offerings and their salability.
Planning and managing this as a network is really a separate article, but certainly indicates some level of network coordinated business plans. If properly coordinated, these initiatives: allow resources to stay sharp during low usage cycles by selling excess resource capacity for partner projects, prevent staffing to transient business spikes, and generally allow for more rapid growth of diverse products and services as invention is harvested by all and not recreated.
Trusting Future Value
The initial value of a fledgling partner in this type of collaborative network can be difficult to quantify. Our partners must look beyond the immediate, as their investment in us certainly outweighs the tangible benefits initially. Partners must be willing to invest without a direct view of the future benefit, trusting that it will come.
But as a smaller operation, we can more readily test new approaches with less relative risk, and we become a proving ground for new ideas that may represent too much risk for larger partners. We have autonomy for meeting the segment of the marketplace we serve while still leveraging the collaborative culture. We can create solutions (like software or process) that can be plug and played throughout the network infrastructure at a time when other partners see a similar need.
The Results Are Apparent
Since 2005, CU*NorthWest has formed a technology CUSO with 10 owners, serving 13 credit unions with a full service data center, all relevant audits complete (including a SAS70 Type 2), a fully deployed menu of products and services and no immediate need to recapitalize. We can move products and services to market quicker and more cost effectively, allowing our customers entry into a full e-services compliment, online ATM/debit and credit cards, cooperative marketing campaigns, central back office support—and later this year, everyone will have a paperless solution deployed.
CU*NorthWest also serves as a catalyst for collaboration among the credit unions themselves. Our customers are working on collaborative network initiatives to address loan collections, payroll, shared member education programs, marketing collateral and more. These are not CU*NorthWest initiatives but rather business strategies being developed by credit unions through their association with CU*NorthWest and leveraging the shared technology layer and collaborative tools native to our network.
A Solution for the Industry?
On a daily basis as a cuasterisk.com partner, we hope to demonstrate what could be the ultimate solution to our industry's shrinking diversity. Credit unions were founded on an individual, small group focus and governance. But market demands have been addressed by seeking unified scale (primarily through mergers) rather than achieving scale through a collaborative network approach. If a collaborative network environment works, and we believe it does, then could this not be a commentary for the credit union industry as a whole?
Just as CU*NorthWest can deliver a level of product and service equal to a larger company, so credit unions can do the same. Is it time to dump the concept of “the credit union movement ” and in its place adopt a collaborative network strategy? We believe it is.
CU*NorthWest was founded in 2005 by four credit unions is Spokane, Washington as a regional CUSO to serve credit unions in the states of Washington, Oregon, Idaho, Montana, and Wyoming. CU*NorthWest is a vital partner in the cuasterisk network of credit unions serving over 1.5 million members country wide. Greg Smith, CEO , has nearly 20 years of experience in the credit union technology industry and his strong beliefs in the power of ownership and local governance has placed CU*NorthWest in the national spot light.
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