Last fall, my colleague Jay Johnson wrote a piece titled “Strategic Planning Is More Than A Fall Weekend.” He’s absolutely right, but it begs a question: If the fall is time for planning, what should credit unions do the rest of the year?
The answer is strategy.
The fall “strategic planning weekend” is well-established in the credit union firmament. It’s a structure that appeals to everyone — boards, management, even the NCUA. It’s simple, manageable, and dependable. But it’s not strategic; it’s business planning.
Business planning, even in a three-to-five-year timeframe, is concrete. It lays out explicit, achievable objectives, sets a timeline for achieving them, establishes metrics for tracking progress, and allocates the resources needed for success.
Strategy, on the other hand, sets the credit union’s course for a decade or more. It helps decision-makers determine where to invest and how to grow. It helps them evaluate whether a new idea is a threat and what will best serve members and other stakeholders.
Strategy is about renewal. It's a chance to reflect on choices, progress, and opportunities. But more than that, strategy offers a chance for the credit union to reaffirm its fundamental purpose — that guiding principle that informs everything from what motivates the organization to how to allocate time and resources. Save business planning for the fall; the rest of the year is strategy season.
Good business plans should align with strategy, and larger-scope, longer-term, conceptual strategy should guide business planning. Without a strategy to anchor them, even multi-year business plans tend to be reactive and reflect the fears of others rather than the credit union’s own strategic vision.
Stride Into Strategy
Planning is planning, some might say, so why separate strategy from execution, especially if the two need to be aligned? Why give strategy its own season, whether spring, summer, or winter?
Because strategy, real strategy, is fundamentally different from business planning.
Credit unions often list a half-dozen strategies they are pursuing this year when they talk about their strategy. They use the language of business planning and the GOST — goals, objectives, strategies, and tactics — planning framework.
GOST is a useful, functional, actionable tool for all levels of planning. The problem, in this case, is terminology. Using the same word — “strategy” — for two related but fundamentally different concepts is guaranteed to cause confusion.
Purpose is more than a carefully crafted statement of mission and values — it’s a cultural mainstay reflected in every element of governance and operations.
To avoid misunderstanding, Callahan & Associates refers to GOST-level strategies as “pillars” or “initiatives.” GOST strategies are specific and concrete. They are about how to achieve explicit, near-term objectives.
True strategy is comprehensive. It’s big picture and long-term. It’s conceptual.
True strategy guides the credit union into the future. True strategy enables credit unions to make big, tough choices on a consistent and self-reinforcing basis. It helps credit unions embrace the role they aspire to play in the lives of members. It helps credit unions achieve the impact they want to make over time.
True strategy is complex in nature and in function, and it demands ongoing attention. This is why it’s so important to regularly set aside time to think about strategy, its underlying foundations, and the path it has set for the credit union.
Is Your Team Making Time For Real Strategy?
Now is the perfect time to talk about strategy, reflect on the past, and focus on the future. Callahan & Associates helps leadership teams focus on what’s important.
The Heartbeat Of The Credit Union
Callahan encourages credit union leaders to talk through strategy and how it’s aligning with operations every single quarter. Then conduct a pulse check and review assumptions, direction, and impact once per year.
What does this pulse check look like? First, it starts with a review and revalidation of the credit union’s fundamental purpose. All strategy is grounded in purpose, whether consciously or not.
Most firms have a purpose — which often are heavily wordsmithed, sometimes at great expense. As mission-driven organizations, credit unions almost always have a stated purpose. But purpose is more than a carefully crafted statement of mission and values — it’s a cultural mainstay reflected in every element of governance and operations.
Purpose drives everything from resource allocation to decision-making at the shift supervisor and assistant branch manager levels. Aligning strategy with purpose is a key success factor in preserving its value as a guideline for major decisions and its effectiveness as a motivator.
This leads to the second element of the strategy review, which is to assess the relationship between the credit union’s articulated strategy and the choices leaders have been making over the past year. Evaluate those choices from a strategic perspective and ensure they align with the credit union’s established long-term objectives.
If choices align with strategy, great. If choices do not align with strategy, then the credit union has some work to do. Maybe the credit union needs to review its decision-making process to make it better reflect strategy and not just operational exigencies. Or, maybe the credit union needs to reconsider and possibly adjust its strategy.
Finally, a strategy review offers the chance to review the credit union’s strategic objectives and the initiatives planned to achieve them. Do they still lie on the critical path between where the credit union is today and where it wants to be in the future?
If the credit union doesn’t have a clear direction for the next couple of decades, if it can’t explain to staff and members why it is relevant to them and how it will remain relevant in the future, set aside the time for strategy. It's the perfect time to fix this.
This article appeared originally in Credit Union Strategy & Performance. Read More Today.