5 Things To Learn From 1Q 2015 Strategy & Performance

What do screen doors, Uncle Sam, and David Fincher all have to do with credit unions?

 
 

It's late July, and many readers have likely experienced the good (vacations, road trips, BBQ) and bad (sunburns, mosquitoes, bored children) of what summer offers.

In all that hustle and bustle, the unread mail pile is also no doubt growing. But don't overlook one valuable item — the 1Q 2015 issue of Callahan’s Credit Union Strategy & Performance, which mailed earlier this month.

The print version is perfect reading material for lazy days at the beach, long car rides, and camping trips. And remember, Callahan clients can access this publication electronically anytime on CreditUnions.com.

As a sample of what awaits within the issue, here are five things we here at Callahan learned while producing it.

1. Good Leaders Do, Great Leaders Teach

Jon Hernandez is the full-time CEO of three credit unions— Mattel Federal Credit Union ($27.3M, El Segundo, CA), CalCom Federal Credit Union ($63.5M, Torrance, CA), and Nikkei Credit Union ($67.4M, Gardena, CA) — but he can’t be everywhere at one time. That’s why he empowers employees to own problem identification and resolution.

“I have a ‘screen door’ policy,” he says. “By the time someone comes to me with a problem, I want them to also provide a possible solution. More than likely, the proposed solution will be the right thing or require just a little tweak. That helps them do things that they might have doubted themselves capable of in the past.”

2. Uncle Sam Can Be The Ultimate Business Ally

Member business loan growth at the now $550 million Greater Nevada Credit Union (Carson City, NV) was up 202.7% year-over-year as of first quarter 2015, compared to 10.8% growth among its comparable peers. Approximately 30-40% of that growth came from referrals from government agencies, says Jeremy Gilpin, vice president of business services.

“We’ve become the go-to source for United States business and industry loans, so now those agencies are driving business into our credit union,” Gilpin says. “That allows us to focus on member service instead of taking the typical approach and hiring several originators to beat the streets.”

Even better, many of these loans — including SBA 7(a) and 504 as well as industry loans and USDA business loans — carry up to 80% guarantees, shielding the credit union from taking on too much risk.

3. There’s Always A Better Way To Connect The Dots

In 2015, Warren Federal Credit Union ($546.6M, Cheyenne, WY) shook up its traditional executive lineup with three new non-traditional roles or divisions of responsibility as well as three entirely new vice president-level positions, a first at the organization.

One of these was the vice president of risk, who not only has oversight of compliance, enterprise risk management, internal audit, and other traditional roles but also took over responsibility of the collections department.

As a result “the role now better encapsulates all types of risk,” says CEO Stephanie Teubner. This might be a reason why Warren cut its reportable delinquency nearly in half between fourth quarter 2014 and first quarter 2015; charge-offs also dropped precipitously over those three months.

4. You Can’t Challenge Your Membership Unless You’re Willing To Challenge Yourself

When AmericaFirst Credit Union ($6.8B, Ogden, UT) set out to build a mobile app that supported five kinds of loan applications on three different platforms, it knew it was making a huge investment of dollars and staff hours. But in the end, working just a little bit harder to make it right the first time has paid dividends.

“People don’t want to have to enter a lot of information for a loan on mobile,” says mobile services manager Brice Mindrum.

Instead of putting the burden of a longer application process on the membership, the credit union tapped into its core system to autofill many portions of these forms. This greatly reduced both the number of questions asked and the time needed to answer.

“It makes those procedures more complicated for us but much easier for the end user,” Mindrum says. “That’s what has to happen if we want this to be successful.”

5. Too Many Cooks In The Kitchen Is The Death Of Great Ideas

As Callahan's own Leigh Anne Terry notes, when director David Fincher was tapped to create the screen adaptation of Gillian Flynn’s popular novel Gone Girl, he recruited and kept close council with previous partners in crime — including cinematographer Jeff Cronenweth and composers Trent Reznor and Atticus Ross — he knew he could trust to understand and protect the integrity of his vision.

Like Fincher, a credit union’s board and executives are often charged with finding the right person or people for the job. But they must also trust these individuals enough to relinquish some control and give them the autonomy and authority to work their magic.

 
 

July 28, 2015


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