It’s 2025. Do You Know Where Your Credit Union Is?

Listerhill Credit Union’s Forge Strategy sets the course for the next five years at the Alabama cooperative.

 
 

Top-Level Takeaways

  • Listerhill Credit Union has set a goal to provide the best experience among credit unions by 2025.
  • To reach that goal, the credit union has established a two-part definition and created a detailed, transparent plan.

CU QUICK FACTS

Listerhill Credit Union
Data as of 06.30.19

HQ: Muscle Shoals, AL
ASSETS: $842.0M
MEMBERS: 92,683
BRANCHES: 17
12-MO SHARE GROWTH: 7.5%
12-MO LOAN GROWTH: 5.5%
ROA: 0.38%

Listerhill Credit Union ($842.0M, Muscle Shoals, AL) has set a big hairy audacious goal (BHAG) for 2025. 

The goal? To provide the best experience for members among credit unions.  

For the Alabama cooperative, it’s an exercise in managing what gets measured, says Clay Morgan, Listerhill’s chief of staff operations. A cousin to open book management, a philosophy popularized in Jack Stack’s 1992 book The Great Game of Business, the credit union’s strategy aims to educate its some 250 employees about how their day-to-day work impacts the entire organization. 

“We want to show every employee how they can contribute to our overall strategy,” Morgan says. “And it’s more than just looking at the finances.” 

By clearly defining a plan to provide the best experience and then openly communicating about said plan, the credit union hopes to create engagement and encourage contributions from its staff for years to come.

Defining The Best Experience

Listerhill hangs its definition of “the best experience” on two things:

  • Ranking in the top 1% in Callahan’s Return of the Member (ROM) metric.
  • Scoring No. 1 in the Member Loyalty Group’s Net Promoter Score.

In the second quarter of 2019, Listerhill ranked 169 out of 265 credit unions with $500 million to $1 billion in assets in ROM. In NPS, Morgan says the credit union is scoring well.

According to Morgan, reaching top performance in these two metrics is an audacious goal, one that requires employees and executives to perform favorably while ensuring member value remains top of mind. 

Clay Morgan, Chief of Staff Operations, Listerhill Credit Union

“We think by achieving these goals, we are delivering the highest possible value to our members,” Morgan says. “This feels significant.” 

To reach these goals, Listerhill has developed a focused, sharp strategy. After engaging with Randy Harrington’s Strategic Arts & Sciences consultancy in the summer of 2019, the credit union named its strategy The Forge Strategy to closely align with its original SEG, an aluminum plant. It also established a team whose sole focus is to internally disseminate strategy updates. That’s important because although the credit union’s BHAG is clearly defined, it’s sometimes difficult for individual employees to see how they contribute to it. 

“Our strategy has four key quadrants, but not every employee affects each principle the same way,” Morgan says. 

The internal communications team breaks down reports on each quadrant on a regular basis to show how individuals are impacting progress toward the BHAG.

Listerhill’s four quadrants speak to culture as much as they do to financial performance, and they are meant to serve as a guiding light for every decision the credit union makes. They are:

  • Member Expectations: Exceed members’ evolving expectations with great flow and exceptional member financial benefit.
  • Safety & Soundness: Protect and prosper members’ informational and financial interests in Listerhill Credit Union.
  • Growth: Listerhill’s relevance should be evident in growth that rivals its best peers.
  • Culture: Foster a culture of extraordinary organizational engagement.

Within each quadrant, Listerhill has identified strategies and metrics to help staff members understand what is important to Listerhill and where they can make an impact. Some of thresholds also trigger employee rewards.

“By clearly identifying metrics, we can start reaching them,” Morgan says. “When you put a goal out there and say there’s a potential reward, it makes a difference.” 

The Four Quadrants Of BHAG

Listerhill’s four key quadrants offer a lens through which the credit union evaluates decisions. These decisions influence key strategies. The success of these key strategies will allow the credit union to reach prescribed thresholds. All are connected and work in unison to support the BHAG.

For example, member expectations strategies include product refinements and re-imagined experiences. The tracked metrics are Net Promoter Score, delivery times, and a yet-to-be determined patronage dividend calculation. In practice, Listerhill will continue to transform its branches into technology centers — complete with ITMs the credit union dubs “smart ATMs” — and introduce member personas to better target service. 

For safety and soundness, strategies involve deploying a cyber plan and improving loan quality before the CECL deadline.

With growth, Listerhill is focused on loans and deposits. It also wants to deepen utilization of products like credit cards and services like digital banking. The credit union is considering increasing its presence in high-growth areas, as well as expanding into new markets.

You are only as good as the day before. We know that things may change as the years go by, but we want to make sure we’re moving forward.

Clay Morgan, Chief of Staff Operations, Listerhill Credit Union

The expansion is coinciding with a re-imagined retail model. Because of this, the credit union felt that the earlier it communicated its plans to employees the better.

“Having our employees see that and understand it ahead of time makes a big difference when the time comes,” Morgan says. “No surprises make a big difference.”

For culture, the credit union wants to make improvements around mapping processes, delivering projects, reaching engagement thresholds, and giving back to the community. It’s in the midst of identifying a primary philanthropic organization to support and has set a goal to achieve and maintain a Best Place to Work designation. In June, Listerhill was named one of the best credit unions in the Alabama by Forbes. More recently, the credit union ranked No. 39 on Credit Union Journal’s 2019 list of best credit unions to work for — and No. 11 among asset-based peers.

2025 might remain a half-decade away, but performance today will help the credit union achieve its long-term goals. And early responses from employees — not to mention members — have been positive. Already, the credit union’s loan-to-share ratio is nearing 90% while its share growth outpaces the national average by nearly a full percentage point. Anecdotally, Listerhill employees have responded well to The Forge Strategy and to learning how their work sets up the credit union for a bright future. 

The credit union is aware that macro-economic and industry-focused changes might require it to shift strategy. If that’s necessary, the credit union will roll with the changes. Underlying strategies might need updating, but the BHAG will remain the same.   

“You are only as good as the day before,” Morgan says. "We know that things may change as the years go by, but we want to make sure we’re moving forward.”

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Oct. 14, 2019


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