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Four Traps That Will Stunt a Credit Union's Success
Wednesday, January 27, 2016 6:30 AM

By Vicky Salkeld, Vice President of Sales, Credit Union Resources

“If everyone is moving forward together, then success takes care of itself.”

– Henry Ford

Hopefully, the good decisions you make for your credit union will far outnumber the bad decisions, and success will be the result. You want it to succeed. You want it to grow. You want it to serve more members and serve them better. Unfortunately, there's no magic formula for success that will work the same for everyone. Every credit union has different demographics, fields of membership, management, competition, financial requirements, and the list goes on.

Despite the differences, there are many similarities—the traps. Credit unions can fall into many traps that will stunt their success and growth, regardless of the differences in operations. Here are a few:

  1. Being out of touch with members.
    We can’t meet our members’ needs and wants if we don’t know what they are. An obvious way of knowing is to listen to their complaints. Some of them may provide valid concerns that lead to positive changes. They need to be addressed, or the membership’s perception of the complaint needs to be changed.

    Remember, for many, perception is reality. You may want to consider a member survey or focus group to get a real sense of what your membership is thinking. Find out what your member’s experience with the credit union is like. If it's exceptional, great! If not, determine what needs to happen to make it so. Knowing is the first step to doing.
  2. Resisting change.
    Change is uncomfortable for most people. But it's necessary if your credit union is to grow and succeed. Technology is progressing at a pace most of us never imagined. Are you keeping up? If not, why? And when will you catch up?

    Policies and procedures are established to provide the framework within which an organization operates. Are you putting policy before people when it isn’t required? Obviously, policies exist for a reason. But, are there times when employees need to override them? If so, do they have the authority to do so?
  3. Reducing employee training.
    If your employees don’t have the knowledge necessary to do their jobs well, your credit union is going to suffer. One of the areas that credit unions often cut when trying to reduce expenses is employee education. While it isn’t an expense required to keep the credit union doors open like compensation, core processing, or utilities, it is very important.

    It has been said that nothing costs a business more than ignorance. How many members or potential members have been run off by an ignorant employee? How many loans have been lost or charged off due to employee negligence? Not properly training employees may very well cost you more than the reduced educational expense it's saving.
  4. Being led by an uneducated board of directors.
    Let me start by saying we are very grateful to the men and women who give countless hours to serve on our credit unions’ boards. These volunteers give a lot of themselves to serve. But they need to be educated. Being elected to the board does not automatically give them the knowledge needed to do their jobs.

    The majority of board members do not have any experience running a financial institution. Credit unions are generally run by untrained board members who oversee the authority of the trained CEO who is tasked with the credit union’s day-to-day operations. Therefore, CEOs must see to it that boards are educated about their responsibilities for the credit union to succeed.

What is stunting your credit union’s success? What can you do about it? Let’s get started!

Credit Union Resources strives to be the leading provider of business solutions for the credit union community. The organization is a wholly owned subsidiary of Cornerstone Credit Union League. Whether you're looking for an effective advertising campaign, sales materials, new lending products, technology solutions, auditing services, a hands-on compliance partner, strategic planning assistance, a shared branching presence, or staffing and operational support, Credit Union Resources has what you need.