Defining The Strategic Roadmap: Where Are You Heading?

Developing a strategic roadmap is important for credit unions trying to close the gap between the goals they set and the results they see.


Recently released mid-year financial results suggest that many credit unions continue to fall short of their strategic goals. Industry-wide member growth remains stagnant at 1.1 percent. Loans increased a modest 4.9 percent. And as an industry, operating costs continue to grow. According to the industry average efficiency ratio, it costs a credit union nearly 73 cents to earn one dollar of revenue versus the bank average of 57 cents. Although the strategic planning process has improved significantly over the years for most credit unions, the data indicates that there is a significant gap between the goals many credit union’s set and the results they are achieving.

Reversing recent trends does not require a single brilliant epiphany at this fall’s planning session with the board. According to Bill Winter, chief executive at St. Cloud Federal Credit Union ($70 million, Saint Cloud, MN), “strategic planning is not rocket science.” Rather, effective strategic planning is an ongoing exercise that requires a practical, honest assessment of external market conditions and internal realities as well as a tactical, rigorous execution plan. While there are many important elements to strategic planning, a key ingredient is the ability to clearly define and articulate the strategic direction of the organization.

Before embarking on any journey, one needs to have both a destination and an itinerary. The same is true of strategic planning. According to Larry Bossidy, author and former Chairman of Honeywell, “a good strategic plan is a set of directions you want to take. It is a roadmap, lightly filled in, so that it gives you plenty of room to maneuver.” Effective strategic planning, therefore, requires credit unions to clearly articulate their goals and identify the key steps required to achieve them. “If you don’t know where you are heading,” says Winter, “you are never going to get there.”

Long-term goals are the cornerstone of any strategic planning effort. Credit union boards and senior executives need to establish the vision for the organization and translate that vision into a finite set of long-term strategic objectives. Generally, a three to five-year time frame is sufficient. According to Ted Thames, first vice president of strategic development at Technology Credit Union ($1.1 billion, San Jose, CA), the credit union’s ability to succeed despite the melt down of the local industry has been due to its ability to remain focused on the future and “stick to the plan.” Near term business issues are important, but do not distract the organization’s attention from its longer-term objectives. “Short term initiatives always link to the long term objectives,” says Thames. “ While we update our plan every three years , Technology’s fundamental long-term goals have remained the same. ”

Defining the credit union’s long-term goals is difficult, but it is essential for success. According to Paul Parish, chief executive at Wings Financial Federal Credit Union ($1.5 billion, Apple Valley, MN), “one of the hardest things for a credit union to do is to make a choice.” Yet defining the credit union’s goals is critical, for it establishes the endgame towards which all near-term efforts are focused. According to Parish, successful strategic planning may be “less an issue as to which strategy one chooses, but in choosing one at all and doing it well. Credit unions need to make a clear strategic choice that will make them unique or differentiate them in the marketplace. We have too many credit unions that look just like any other community financial institution."




Aug. 22, 2005


  • Excellent article! Points to importance of making choices and supporting those choices in the strategic plan.
  • Speaks to the importance of a strategic plan. Would like to see a credit union strategic plan.
  • Very useful. Well written.