The Roman statesman Seneca said, “the mind that is anxious about the future is miserable” so a good sanity check might be to create business plans for a range of possible outcomes. That strategic methodology, called “scenario planning” is rapidly gaining popularity in some credit union circles, and Doug Fecher, President/CEO of Wright-Patt Credit Union in Fairborn, Ohio (www.wright-pattcu.com) claims the process provides a logical plan for dealing with uncertainty.
“Scenario planning forces you to think about possible eventualities based on external trends; it challenges the credit union’s assumptions about the future,” said Fecher. That makes CU management and boards assess existing initiatives and identify key success factors against a backdrop of several possible futures. The six-step scenario approach is:
External environment analysis
Industry and market analysis
Developing key success factors and strategic vision
Creatively generating strategic options
The “future worlds” that are created are all possible, given current market conditions, trends and foreseeable events. One Wright-Patt scenario is called “Walking on Sunshine,” and is based on boom times for the Dayton economy– military spending in the area remains high, banks continue to merge, alienating customers, CUs remain corporate tax-free and the Latino and immigrant population grows. Its twin is called “Stormy Weather” and is the alternate “bust” view. But scenario planning isn’t a mere contrast of “what-ifs” and is more complex in formulation than “if…then.” Fecher said it does, however, answer the question: what must we do to serve members in this segment, given a certain set of conditions?
Several Wright-Patt staffers had attended a CUES CEO Institute where Roch Parayre, Ph.D. and managing director in Decision Strategies International (www.thinkdsi.com which runs the Institute for CUES) was teaching scenario planning at the Wharton School (other segments of the Institute take place at Cornell and Darden). “Doug hired us as a strategic planning outfit,” said Parayre, who recently completed a similar session with Navy Federal Credit Union.
“This might not be for all credit unions, it’s time consuming so you must dedicate staff time and appoint a team leader to keep the project teams on schedule,” said Fecher. “ We did our own two-day workshop and six weeks later did another, follow-up workshop, and there was lots of homework in-between. But we gained valuable expertise through our facilitator, Roch Parayre. ” Figure 6-12 months for the initial cycle, he said.
What Wright-Patt doesn’t have is what Fecher calls “credenza ware” or the strategic plan that sits on a shelf, because “you never finish scenario planning. You’re never done because you constantly reevaluate the inputs to the plan. But once you understand it, it evolves right in front of your eyes.”
Credit Union conference speakers habitually exhort audiences to “embrace change” but like Mark Twain’s complaint about the weather, nobody does anything about it. Yet scenario planning offers a means to benefit from upheaval. “Most organizations, including credit unions view uncertainty as the enemy,” said Parayre. “They treat it as something to be managed, but in these times it’s a real opportunity. In disruption lies significant opportunity for those willing to embrace it.”
Forget that notion of history repeating itself, he said. The odds of things happening in the future the way they did in the past is nostalgic, but inapplicable. But the more narrowly defined parameters of possible scenarios hold up quite well if done properly, said Parayre.