25 years as a credit union CEO and I realized my dream of living in a small town, with no traffic, on a mountain and as far away as I could get from an ncua (nobody cares or appreciates credit unions) examiner.
Having the time and flexibility to reflect on a career in financial services that spanned 39 years, and the freedom to do what I please allows me a level of introspection not possible while running a large credit union. Having a passion for succeeding can be dampened by onerous regulators and meddlesome board members. It’s understandable that as the CEO of the credit union you can be side-tracked and forget to ask, “What is the primary purpose of your business”?
I have taken the disciplines of strategic planning, my years in credit unions and empathy for your role as CEO to add value to executive strategic planning. The reviews have been great and in many cases, those credit unions had never, or not in years, looked at their vision, values, mission or critical goal categories.
CEO’s come and go, the credit union board has a turnover and things get swept under the carpet.
Inconsistency in the vision of the credit union among all stakeholders can derail its direction. Without values to determine the rightness of the direction, you cannot perform decision making.
For the last 100 years, almost all credit unions have held some variation of planning and usually in the fall of the year. That annual weekend in the woods with the board and selected executive leaders is as much a privilege as a need. It’s planned around golf, meals and keeping spouses happy. There is some work; however, it’s hurried and you as the CEO have an agenda.
The error of fall planning sessions is the time constraints it creates. It is late-October or early November and next year’s budget development is in progress. Suddenly, new initiatives and critical goals categories get inserted and you are scrambling and adding undue stress to incorporate those into a budget that was almost complete.
A better practice is to hold the planning session sooner after the prior year is closed and there are clean financials and a lull in the action so everyone can take the proper time to plan the future of the credit union. Performed earlier in the year provides you and your team the time required to conduct business planning and execution. As soon as you have completed your exercise in visioning and have crystallized a vision statement, selected a base strategy, analyzed both external factors and internal resources, you have basically completed the strategic thinking and planning process.
Now, if that is done in the 1st or 2nd quarter, you have time for every department and branch, as well as all areas of the operation, to digest the plans and submit their capital needs…and that makes you look better. Building the budget prudently and with adequate time to test it before its approval in December wipes away mistakes.
As you go through a process that may stretch over 6-8 months, here’s what it may involve:
- Developing a mission statement.
- Identifying critical success factors.
- Creating goals.
- Creating a marketing plan.
- Developing a sales plan.
- Developing financial projections.
- Creating a dashboard.
The business plan differs from the strategic plan, which focuses on the long-term future, by helping you focus on and plan the present. Your business planning process will help you identify what specific actions must be accomplished, who will accomplish them, how they are going to be accomplished, and by when so that the future you envision becomes a reality.
Here’s what that looks like:
- Vision- Why (strategic); suggested time frame 5-15 years.
- Mission- Why (strategic); suggested time frame 12-18 months.
- Critical Goal Categories (strategy) – Strategies to accomplish the mission; suggested time frame 1-2 years.
- Goals- (tactical) expressed as SMART goals; suggested time frame 1-2 years.
- Action Steps- (tactical) prioritized action steps; suggested time frame 12 months.
Doing the right things right takes time. When you hurry, you are more likely to make mistakes. Mistakes mean rework and haste makes waste. Rework means more time and additional cost, both of which result in lower profits and the possible loss of members.
There is a better way to conduct strategic planning in your credit union. Start sooner, think things through, eliminate errors, improve the bottom line and create the future you and your members, deserve.