The second day of CU Direct’s Drive 18 included sessions that shed light on the secrets to sustainable growth and underscored the importance of preparing for what’s to come.
In the day’s first keynote address, corporate strategist and best-selling author Nicholas Webb whose books include The Innovation Playbook, The Digital Innovation Playbook, and What Customers Crave, among others talked about the link between disruption and innovation.
According to Webb, for disruption to occur, an organization must deliver a delicious and beautiful experience. Leading organizations ensure relevant, personalized, and curated experiences for their consumers.
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The speaker offered five steps credit unions must take to become disruptors:
- Live by the philosophy that members matter.
- Understand member personas and journeys.
- Out-invent the competition.
- Put formal customer experience strategies in place.
- Build infrastructures for innovation.
In the day’s second keynote address, nationally acclaimed bowtie economist Dr. Elliot Eisenberg provided an economic overview and discussed how credit unions can thrive over the next 15 months while preparing for a recession in late 2019 to early 2020. Eisenberg was deemed the Kramer of economics by Drive ’18 emcee Andrew Davis, and Eisenberg did not disappoint with a presentation that included hopping from table to table.
Today’s economy is part of the second-longest recovery in history, and Eisenberg says it will likely break the record over the next one to two years. According to Eisenberg, the economy is in a solid state household consumption, corporate spending, and government spending are all up but it won’t stay that way
It’s unusual this late in a business cycle to see government spending going up, the economist said. Households are repairing their balance sheets and re-leveraging. We are borrowing differently now than we did 10 or 12 years ago. Mortgage debt is not quite as big as it was at the peak. There is no housing bubble, although there are some problems. Student debt is going up like mushrooms after a frigging rain storm it’s more than credit cards and automobiles.
By and large, Eisenberg says the data is good but cautions credit unions to stick with their lending standards and don’t let up. Go after that market share, but don’t reduce FICO requirements.
Eisenberg’s presentation mixed humor with hardcore data, such as in this slide titled Taller Fed Chair, Higher Rates?, which shows a correlation between the height of the Fed chair and the federal funds rate. For example, rates were low during the tenure Janet Yellen, who is 5 feet 3 inches, but expect rates to continue rising under the watch of Jerome Powell, the current Fed chair who stands nearly 6 feet tall.
In his keynote address at Drive ’18, Dr. Elliot Eisenberg correlated height and rates at the Federal Reserve.
Although Eisenberg predicts a recession in the next couple of years, he doesn’t expect the negative implications to be as drastic as during the Great Recessions. Still, he urged credit unions to prepare for an economic contraction.
Read more coverage: Hacking The Rock Star Attitude For Credit Union Land; Disruption And Table Jumping At Drive 18; How To Ace A Disruptive Future.
