The Power Of 4

This week, CreditUnions.com is all about benchmarking and the power of data.

 
 

How do you measure success?

Those five words pose one daunting question that has innumerable answers, none of which are 100% wrong or right. That’s why this week, CreditUnions.com is all about benchmarking, performance measurement, and data mining. The best practices, tips, and case studies we cover are meant to inspire and challenge you to push how you evaluate your institution to the next level.

In 4 Ways To Benchmark Credit Union Performance, Callahan analyst Janet Lee breaks down four traditional ratios credit unions use to evaluate performance by discussing the factors that influence each ratio and the potential drawback of using one over another. After reading this piece, you’ll understand the pros and cons of the financial ratios and know better what questions to ask in different situations.

In 4 Ways To Re-Examine Traditional Benchmarking Metrics, Callahan EVP Jay Johnson builds off Lee’s wok by delving into how to build context into your benchmarking strategy. After all, measuring your credit union’s performance against a broad set of standards overlooks important factors that make your institution distinct. Johnson focuses on personalizing benchmarking strategies according to two central questions: 1) How do we know if our credit union is performing well? 2) What metrics should we use to gauge our effectiveness?

In this week’s Q&A, Proper Benchmarking Is The Key To Effective Competition In Any Market, Kevin Cole, chief financial officer for Maps Credit Union in Oregon, discusses how benchmarking against the right institutions using the right metrics is a vital component in determining how successful a credit union is performing and how effectively it is competing. Maps evaluates its financial performance through the lens of what other local bank and credit union competitors have been able to achieve. It’s this type of well-rounded benchmarking that helps the credit union avoid tunnel vision and better understand its entire market.

In 4 Ways To Build A Better Balanced Scorecard, writer Erik Payne outlines how balanced scorecards help credit unions link long-term strategy to short-term decision-making. Using real examples from credit unions, Payne shows how powerful and creative a well-constructed balanced scorecard can be.

And for those credit unions out there that are confident in their benchmarking and performance management strategies, writer Aaron Pugh shows you how to take your data to the next level in How To Become A Data Macgyver. Pugh’s profile of Heritage Federal Credit Union shows how the Indiana-based institution pulls together a wealth of internal and external information, including third-party membership surveys and institutional performance comparisons, core and ancillary system resources, credit bureau reports, and even some demographic and lifestyle data.

“It doesn’t cost a lot to get this information,” says Steven Bugg, the credit union’s chief marketing and member service officer. “In fact, we found a lot of it was already at our fingertips.”

And now you can learn how Heritage weaves this data into narratives to help it understand its positioning in the market and inform future goals.