Opportunities in the Midst of Uncertainties

No one needs to tell you that we are living through an uncertain economic time. The dot-com bubble has burst in a big way. This had to happen. The climate of a year and more ago was unrealistic, pervaded by the notion that people could make money not by earning it, but out of the thin air of ideas alone. What does this mean for the future? Can we use some of the propelling new advances in the economy to continue to help improve productivity and prosperity?


This Article appeared in the April 2001 issue of the Callahan Report

No one needs to tell you that we are living through an uncertain economic time. The dot-com bubble has burst in a big way. This had to happen. The climate of a year and more ago was unrealistic, pervaded by the notion that people could make money not by earning it but out of the thin air of ideas alone.

It couldn’t last, and Federal Chairman Alan Greenspan was correct in trying to cool down the economy when he did. We are now experiencing a reality check, and we needed one. It will take some time to work through this trouble; there is oversupply that needs to be absorbed and so on, but we’ll see our way through it, maybe in a kind of rolling recession like the one of some years back when certain parts of the country were in trouble while others weren’t and the whole effect was a kind of oozing forward. Despite some really wretched segments of the economy, the overall fundamentals are solid. The great engine of the last few years propelling new advances in the economy - namely the Internet - itself is not a bubble that has burst; it is not going away, and it will continue to help improve productivity and prosperity.

The picture in the credit union world is mixed. People seem to be more conservative in their purchasing and borrowing. On the other hand, there seems to be an increasing flight to quality that could serve us well.

We cannot know the future. But we should not fear the present. Instead we should be looking for opportunities in the present climate for improving our credit unions and our credit union system. We should be looking beneath the hype about crashes and bubbles and try to understand what is going on in our system and where we might make constructive strides. The last thing we should be doing is resting on our laurels, saying, “See, I told you so - it was all hype, and let’s get back to doing business the way we know it.”

Internet-Induced Developments

These uncertain times have sparked several phenomena I have witnessed personally. One is that the Internet continues to have a strong impact on operations. Recently, at our credit union we posted a spring special on the Internet in order to bring in savings from our members. Brokers saw the posting online and, knowing what a good deal it was, notified their clients and had them join the credit union. As a result, vast amounts of money flowed in. Thus for little effort, the Internet brought in a good deal of new money.

But the Internet can have unsettling consequences as well. I have also perceived among credit unions I’ve visited an uneasiness among employees who wonder if there will be a place for them in an Internet-intensive credit union. If they feel that there might not be, then they might work against management’s efforts at making the credit union Internet-efficient. I believe there is a place for each employee, but if they themselves do not believe it, they may attempt to blunt the future.

In these disquieting times we have to recognize the undercurrents and work at solutions. We have to work with employees to seize the future. They can make their future, but they have to understand the present climate and find their best course to constructive change.
The Internet has sparked yet another uncertainty, namely how people are going to use it. All we can be sure of right now is that they are not using it quite the way gurus were predicting two years ago. There was a lot of talk then about researching a purchase online and then making the purchase online - gurus were predicting a direct line from desire to purchase. The reality is turning out to be more complicated. People are tending to do research on the Internet but backing off from buying online. Rather they are buying locally.

Thus it seems that people are still struggling with how they are going to use our economy’s new electronic infrastructure. They are still “assembling their path” to purchases and services. We don’t know where this is going to lead.

Learning from Each Other

But we do know this: all credit unions are struggling with these uncertainties, and all are attempting their own solutions. Some, no doubt, are faring better than others. What we should not be doing is struggling blind and alone. There is far too much to be learned from the hard-knocks and experiences of others. What we should be doing is sharing our experiences. We can thus leapfrog over obstacles and all the more quickly reach methods that will advance all of us.
Credit unions are sophisticated. But we need to make a giant leap forward and stake out a new sophistication in credit unions that far surpasses the average citizen’s notion of our capabilities. We have to be united in going forward and really showing Americans what we can do for them. Staying ahead of the curve, and showing how sophisticated and helpful we can be will draw in people as never before.
Uncertain times? Yes. But opportunities? Undoubtedly. A better future? Yes, but only if we find the means of working cooperatively and for the good of average Americans. If we can, everyone wins.




June 18, 2001



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