"If you don't know where you are going, how will you know when you
- Alice in Wonderland
Strategic planning is a critical component to the long-term success of your
organization. Building a road map that establishes the destination with guidelines
and objectives requires a synergy between the executive team and the board based
upon a predetermined long-term vision. You can describe the strategic planning
process as the board setting the destination - getting to New York City from
Los Angeles within this timeframe, within established values and with this amount
of budget. It doesn't matter the route or the car you select; that's within
staff control. However, strategic initiatives that anticipate both opportunities
and challenges while on the road will be measured and the management team will
be held accountable for results.
This synergy between the board and the executive team in setting strategic initiatives
requires a collaborative planning process that begins with education, clarifies
understanding through interactive dialogue and focuses on the ultimate mission
and vision for the credit union.
Silver State Schools, Las Vegas, Nevada ($788M), has both an educational session
and strategic planning session that provides the board an opportunity to learn
more about credit union initiatives before the strategic planning session. It
gives both staff and volunteers the time to learn more and ask questions to
ascertain background on what issues may be urgent and what are pending on the
Dave Rhamy, Silver States CEO, commented, "Education is a critical component
of our planning session. Understanding the state of the credit union, the state
of the financial industry, and what consumers want from their financial providers,
prepares us for a highly focused, well-informed discussion that results in an
Every credit union's strategic planning process must be uniquely designed to
fit the specific needs of the organization. This being said, there are common
components that a successful strategic planning session should incorporate.
The macro analysis:
- Consumer Trends and Demographic Analysis
- Financial Institution Industry Trends
- Credit Union Industry Strategic Trends
The micro analysis for the individual organizational strategy:
- Vision & Mission: Creating or revisiting this critical component
reinforces the ultimate goal of the strategic planning process. While the
vision outlines the ideal state the credit union desires to achieve, the mission
identifies major goals and performance objectives. Both should reflect the
culture of the credit union.
- Environmental Scan: This is an analysis of the current internal and
external environment. Many credit unions often utilize a SWOT model to conduct
this scan: Strengths, Weaknesses, Opportunities and Threats.
- Gap Analysis: By evaluating the difference between your current position
and desired position you can develop specific strategies and allocate resources
to close the gap.
- Benchmarking: By reviewing other credit unions' operations, practices
and performance, you can identify "best" practices for your credit
- Strategic Issues: Strategic issues are fundamental issues you will
need to address to progress toward your desired vision. These issues are identified
through the environmental scan, gap analysis and benchmarking.
- Strategic Programming: This is the bulk of the planning process where
SMART goals (Specific, Measurable, Agreed Upon, Realistic and Time/cost bound)
or milestones are set. Action plans for reaching the goals are established
and tactics specific to the action plans are outlined.
- Ongoing Evaluation: Periodic evaluation of strategies, action plans
and tactics are important to assessing the success of the strategic planning
process. This evaluation should include looking at unpredicted events, both
internal and external, that impact the achievement of your goals. Adjustments
are made to the strategic plan based on changes impacting the credit union's
LA Financial, Pasadena, CA ($300M), is a great example of using benchmarking
in the planning process. They have developed a strategic planning process that
identifies industry best practices for key initiatives that they are looking
to implement. Guest speakers are included from these credit unions to share
their research, implementation and results. "This approach provides the
Board and management team an opportunity to learn first hand what works and
garner ideas that may apply to LA Financial," stated Barbara Nall, CEO.
Top-of-Mind Discussion Issues
Below are some hot topics for consideration during your 2006 planning sessions:
Environmental Scan & Gap Analysis:
- American Banker's Association: With Harris Simmons, CEO of Zions Bank in
Utah, assuming the chair of the ABA, it might be prudent to discuss the direction
they are heading based on Simmons' statement that the #1 goal should be to
"rein in those out of control credit unions no matter what charter they
- Credit Union Statistics: Review Callahan & Associates data on growth
(assets, membership, share, loan, etc.).
- State of the Credit Union System: Internally among credit unions as well
as in comparison with the banking market. Areas to explore include:
- Financial performance indicators-share growth, lending performance,
- Financial trends-declining membership growth and the changing business
model caused by operating expenses outpacing net income and creating an
- Field of Membership opportunities/issues-The big debate. What do recent
regulatory trends tell you? What does it mean to your credit union?
- Credit union conversions-What's happening and how is it impacting the
- Credit union mergers-What does this mean to the industry and our credit
- Regulatory advocacy-What are industry advocates looking at, talking
about and trying to impact? Where does your credit union stand to gain/lose?
Benchmarking & Strategic Issues:
- Differentiation: What's yours? In this competitive landscape where product
alone doesn't differentiate financial institutions, what is the hallmark on
which you can hang your hat? If it's service, which many credit unions claim,
how do you know?
- Branching and alternative delivery channels: Effectively serving members
is key to retention and growth and this convenience driven marketplace calls
for thinking outside the box. Have you reviewed alternative delivery channels?
Are your current branching strategies meeting your members' needs?
- Consumer needs relative to business services and lending strategies: Where
is this on your priority list? If high, are you prepared to compete? What
do you know about consumer needs and wants in these areas and do you have
the products, processes, staff education and marketing in place to meet them?
- Emerging markets: New York isn't the only melting pot today. Emerging markets
even beyond the Hispanic population are prevalent throughout the United States.
Do you want to tap into these markets? If so, how do you educate and equip
the staff and deploy strategies for successful community outreach?
- Technology trends and applications: Technology for the sake of having it
is not enough. Where can you implement technology to have the greatest impact
on member satisfaction and operational efficiency?
- Asset Liability Management: With increasing expenses and tight margins,
ALM is an ongoing discussion topic.
- Board governance: How is your board operating in a more complex industry
where the liabilities are greater, consumers expect more and financial management
is critical? Are your policies strategic and flexible?
- Succession planning: Your future depends on it. Where do you stand with
Board of Directors, volunteer, committee and executive leadership succession
- Executive/Leadership onboarding: You read about changes in credit union
leadership daily. Is your credit union going through or anticipating leadership
changes? Have you thought about, discussed and implemented plans for onboarding
those leaders so they can have immediate wins and a successful future?
Dynamic, flexible roadmaps must be developed so that staff can respond quickly
to opportunities that cannot be anticipated in this dynamic environment. Cohesive,
highly educated volunteer and staff teamwork is necessary to create a strategic
plan that can serve as a living document that can easily be modified based upon
the conditions of the road ahead.
MyDAS, Inc. is a full service consultation firm providing solutions for staff
and member education, MySTERY Shopping and other research and survey solutions,
and agency marketing services. Serving the industry for over 20 years, find
out why the best and the brightest select MyDAS for results. For more information,
visit www.mydas.com, or call us at 800-291-6117.