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Navigating Safely Through the Fog
Wednesday, July 26, 2017 6:40 AM

Dean Borland, SCMS, CUDE, VP Product Development, Credit Union Resources

Back in June, I took a few days off to tour the Oklahoma Kiamichi wilderness and northwest Arkansas on my motorcycle. There’s a something special about touring on a bike. We tend to ride the “road less traveled” to minimize the intrusions of modern life while enjoying the natural beauty of our surroundings. I don’t even have a radio, leaving plenty of time to think, or simply clear the mind...

The last night of the trip was at 2,753 feet atop Arkansas’ tallest peak at The Lodge at Mount Magazine. We climbed the mountain under a cloudless sky and watched the sunset while enjoying the company of friends and a cold beverage on the overlook above the Petit Jean River Valley. The view would be quite different in the morning.

clear view

Overnight, a cloud bank settled over Mount Magazine’s peak, promising to make the steep and twisty downhill trek into the valley a challenge. Morning fog is common on the mountain, and it was not my first rodeo, as we say in Texas. I knew that we would likely drop below the cloud deck midway down the mountain and that the rest of our 300-plus mile trip home would be under partly sunny to sunny skies. But that first step was a doozy as we navigated the switchbacks and steep grade in the fog.

foggy view

“So, what does this have to do with anything?” you ask. Well, there may be similarities between motoring in the fog and navigating toward your credit union’s future.

NCUA regulations (§701.4) states, “the board of directors is responsible for the general direction and control of the affairs of each federal credit union.” The Regulations require the director to “carry out his or her duties as a director in good faith, in a manner such director reasonably believes to be in the best interests of the membership of the federal credit union as a whole…” and taking into account what's best for the credit union’s membership over the long term rather than the short term.

Those of you who know me know that I am an advocate of board planning at the 35,000-foot-level, or in this analogy at the 2,753 foot level. I believe boards should chart vision and strategy as a component of their regulatory responsibility of general direction and control, leaving tactical (operational) planning to the process owners who will be executing the plan. But, it occurs to me that as boards and senior leadership teams formulate the organization’s high-level vision, the vision may become cloaked in fog, limiting the long-term vision. When that happens, boards need to briefly drop down below the cloud deck to assess the credit union’s value proposition, current and future, through the eyes of members and potential future members.

Many credit unions are blessed with legacy leadership, both volunteer and staff, who live and breathe credit union philosophy. But in most credit unions, tomorrow’s members have little in common with legacy members (and directors) whose common bond was linked to the credit union’s founding sponsor.

As founding sponsors have gone away or shifted allegiance away from credit union sponsorship, conversions from single common bond to multiple common bond or community charters have afforded “orphan” credit unions with the opportunity to serve broader and, in many cases, more diverse fields of membership.

Obviously, gaining approval to serve an expanded field of membership enhances a credit union’s ability to enroll members who had previously been ineligible to join, but credit unions sometimes fail to ask an all-important question, “Why would anyone leave an existing financial relationship to join your credit union?” Or more specifically, what value does your credit union offer that would make a consumer go through the hassle of moving their business away from their current provider? Enter the fog…

What will attract those potential new members to your credit union? What can you do that is so much better than the competition that consumers will be willing to go through the hassle of moving their account? What are you really good at doing? What are you really not good at doing? What do you need to get really good at in the future? What do you do now that you could stop doing? And, first and foremost, what are the most important one or two things you need to focus on to move the organization forward?

You need a vision, but you also have to know how to navigate the path. Sometimes you may need to briefly drop down off the mountain to get out of the fog and regain your bearings...