1. finance
2. bank
3. bank account

S T R A TE GI C
P LA N N I N G
P RI M E R
MARK ARNOLD
Helping mark credit unions for success.
INTRODUCTION
Successful businesses and credit unions need to conduct strategic planning sessions
on a regular basis. Organizations that consistently plan well enjoy success more
frequently. As author Jim Collins notes in his book Good to Great, “…good is the
enemy of great.” Certain times, credit unions settle on a good strategic plan, rather
than building a great one.
When looking at ways to help guide your strategic plan for your credit union, we will
focus on the following aspects:
• The Strategic Funnel
• Is Your Strategic Plan Really Strategic?
• Ten Questions to Ask at Your Strategic Planning Session
• How to Put Zing Into Your Planning Sessions
• Five Reasons Your Strategic Plan Could Flop
Testimonial:
“Mark is terrific! We
can’t say enough good
things about Mark.
We would definitely
recommend him and
we are so happy to have
had the benefit of his
expertise to help us craft
our marketing strategy.”
—Mignhon Tourné, CEO
ASI Federal Credit Union
($300 million, LA)
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S T R A TE G
P IR
C OP LPA N
O NSI NA G L P R I M E R
MARK ARNOLD
Helping mark credit unions for success.
THE STRATEGIC FUNNEL
Strategic planning is one of the most important things a credit union’s leadership
team can do to sustain the organization long-term. The decisions made in those
sessions should ensure that a credit union is prepared for tomorrow’s challenges.
“Every credit union does strategic planning. The question is, do they do it well?”
The best strategic planning sessions work like a funnel or an inverted triangle. They
start with the big picture and work down into the specifics. When you incorporate the
components of the funnel into your strategic plan, you should have a clear strategy
at the end. There are four components to consider.
Industry Updates
You have to know what is going on in the industry before you can adequately access
the direction of your own credit union. Start with CUNA’s E-Scan. You should
also consider an outside facilitator or speaker who can provide additional insight.
“Every credit
union does
strategic
planning.
The question
is, do they
do it well?”
Mission/Vision Review
Your mission and vision statements help determine the strategic decisions you make.
Your mission statement explains why your business exists. Your vision statement
speaks to what your organization is trying to accomplish. These reviews can take a
long time. Resist the urge to do a complete overhaul.
Situation Analysis
This is the analysis that will help you with your budget numbers. A situation analysis
helps you identify trends and conditions that can influence the perfor-mance of your
credit union. It encourages your credit union to take a good hard look at how well you
are performing in various markets, how your products and services are performing with
your members, what you are doing well and what you should not be doing at all.
Five Star Analysis
Traditionally, credit unions use the SWOT analysis. Throw it out and use tools that
are more current and comprehensive, like a five star analysis.
Every credit union strives for greatness. But oftentimes we settle for mediocrity.
How can credit unions go from good to great? They can strive to be a “five star”
credit union.
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MARK ARNOLD
Helping mark credit unions for success.
But what does having a “five star” rating really mean and what does it look like? A
true “five-star” credit union will achieve success in five key areas: member service,
staff, operations, finance and marketing/branding. To truly accomplish that high
rating, successful credit unions examine those areas from a strategic perspective with
a five star credit union analysis.
“Completing the five star credit union analysis enabled us to quickly identify our areas
of focus,” said Cindy Beauregard, CEO of Heart of Louisiana FCU. “We had positive
strategic discussions with executive staff and board about what we needed to do in
each area to move our credit union forward. Our credit union is executing our strategic
plan much more efficiently now because we used this tool.”
Testimonial:
“It has been my experience
that the shortfall of
many consulting firms
is that they focus almost
exclusively on the national
averages and normative
figures without taking
into account the unique
community in which
my credit union operates.
Mark’s attention to detail
in learning about our
credit union and members
is what sets him apart
from the rest. The end
result of our experience
with Mark is a detailed
plan tailored to meet
our specific needs and
members.”
—Brian Leger, Marketing
Director, Lafayette Schools
FCU ($148 million, LA)
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The key with each area is not to look at them tactically or with a “gut feel.” Rather
answer this question in each area: “What should our credit union’s strategic priorities
be with _________ ?” (insert key area). The five star analysis involves each person in
the planning session rating on a scale of one to five (one the lowest; five the highest)
how they would rank the credit union in those five areas. The consensus becomes the
score.
Next, we employ the five areas and specific items and questions you should consider.
1 Member Service
Your credit union is only as strong as the sum of its relationships with its members.
No matter how strong your credit union is financially, if you’re not giving great
member service you will eventually die.
“Service is not a dead model,” says Tim Wackel, a sales training guru. “Not everybody
is really competing on service.” But how is your credit union when it comes to
competing on member service? Examining member service means looking at:
• Service levels—What kind of service are your members receiving? Is it average
or over the top? Are you doing anything to wow your members?
• Service channels—What is your service like at your branches and in your call
center? Is there consistency?
• Convenience issues—Honestly, how convenient is your credit union? Are you
offering multiple channels and ways for your members to receive your products
and services? How mobile is your credit union?
In other words, look at member service strategies from the members’ perspective.
Would you bank at your credit union if you didn’t work there or weren’t on the board?
When thinking of member service strategically, you must ultimately ask what our
credit union needs to do to score a five in this area.
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MARK ARNOLD
Helping mark credit unions for success.
2 Staff
Successful credit unions focus on employee retention and morale. You cannot have
a strong credit union without a strong staff. Many companies (like Southwest Airlines
and Adobe) make employee retention a powerful tool in their strategic arsenal. They
believe happy and satisfied employees deliver great service. If their customers receive
great service then the customers come back for more business. Repeating customers
means increased profits, which in part go back to those happy employees.
As Nicholas Ind, author of Living the Brand, says, “It is the collective power of
individuals in an organization that provides and sustains a competitive advantage.”
In other words, staff is a huge positive in an organization’s overall success. So how is
your staff doing? Examining the staff strategically means looking at:
• Staff development—How are you training your staff? How are you investing in
their ongoing learning?
• Sales and service culture—Do you have a true sales and service culture in
place? What is your credit union’s philosophy when it comes to sales?
• Size—Do you have too many employees, not enough or just the right amount
(sorry for the Goldilocks reference!)?
In other words, examine staffing issues at a high level.
3 Operations
The underbelly of the credit union—operations—is often overlooked or under appreciated. But if areas like accounting, IT, and back office support are not functioning at a
high level then all sorts of problems will occur.
“Continuous process improvement is one of the most important ways operations and
technology can support the credit union and enhance its effectiveness,” said Rudy
Pereira, senior vice president of operations and technology at Alliant Credit Union,
in a recent Credit Union Magazine article. Examining operations means looking at:
• Branching system and philosophy—What is your facilities plan? Do you know
where you want to be in five years with your branches?
• Efficiencies—How efficient is your credit union? What are your processes like
when opening an account or getting a loan?
• Technology—What is the back office technology like at your credit union?
Does your core processor do everything you need?
Is operations a strength or weakness at your credit union? If your back office area is
strong it can raise your entire credit union. If it is weak, it bring you all the way down.
Are there strategic steps your credit union needs to take improve its operations?
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S T R A TE GI C
P LA N N I N G
P RI M E R
MARK ARNOLD
Helping mark credit unions for success.
4 Finances
“The budget, the budget, oh we hate the budget.” So goes a popular tune in many
credit union circles. In some credit unions the CFO is the most hated person in the
organization. But the reality is he or she is probably the most important.
According to a study done by ACCA, a global association of professional accountants,
83% of senior financial executives surveyed said the finance chief’s role is more
important today than it was a year ago. Examining credit union finances means
looking at:
• Financial strength—What does the overall health of the credit union look like?
• Profitability—Is your credit union making money or losing money?
• Net worth—Is it declining or increasing compared to previous years and why?
How is your ROA?
Testimonial:
“Mark’s breadth of
knowledge of issues facing
credit unions, learned
from real world, hands
on experience, allowed
him rapidly understand
and relate to the issues
and trends challenging
our credit union. Using
Mark to facilitate our
planning session allowed
us to quickly identify and
focus on viable solutions
relevant to our future
growth and success. I
enjoyed working with
Mark because of his
unwavering commitment
to help us succeed.”
—Jim Hagerman,
President/CEO,
Linn Area Credit Union
($289 million, IA)
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Some may consider the finance area more of a measurement tool than a major
strategic initiative. However, to achieve any type of five star rating, your credit union
has to have strong finances. Are there strategic considerations to undertake (for
example capital levels) when it comes to your credit union?
5 Marketing/Branding
Ultimately, branding is “who you are you.” Who you are as leaders, who you are as
employees and who you are as staff. According to Chief Executive Magazine, CEOs
who recognize the importance of the brand run organizations that tend to be
very successful.
“One of the things we recognized about 10 or 12 years ago was that probably of
all the assets on our balance sheet, none was more important than the brand, even
though it wasn’t capitalized at all,” said Fred Smith, CEO of FedEx.
So strong branding and marketing is good for business. How strong is your brand?
Examining marketing/branding means looking at:
• Brand Image—Do you have a formal brand plan at your credit union? Does your
board, management and staff clearly know what your credit union is about?
• Target markets and market share—Who are you trying to reach? What is your
penetration within your community or SEGs?
• Product offerings—Are you offering a full product suite? When was the last time
you introduced a new product?
Many brand experts say, “branding is everything.” Branding is not a one-time project
you complete and mark off your “to do” list. You should constantly be branding your
credit union. So strategically, how is your branding and marketing performing?
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S T R A TE GI C
P LA N N I N G
P RI M E R
MARK ARNOLD
Helping mark credit unions for success.
Ranking each of those key areas on a scale of one to five gives your credit union
incredible strategic insight. It can help guide your plans for the next several years.
For example, if you are strong (above a four) in operations and finances, but are weak
(below a three) in marketing/branding then you need to spend more time improving
your credit union’s image. Also, if you are just average (three) in member service then
you probably need to have some strategic discussions on how to improve service so it’s
not just “average.”
Regardless of which specific areas need work, every credit union should strive for a
five star rating.
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S T R A TE GI C
P LA N N I N G
P RI M E R
MARK ARNOLD
Helping mark credit unions for success.
“Despite the
ever-changing
financial
services
landscape,
credit unions
must examine
where they are
going in the
next three to
five years (and
not just next
year) with their
strategic plan.”
IS YOUR STRATEGIC PLAN REALLY STRATEGIC?
Most financial institutions focus on their next year’s strategic plan sometime in the
fall of the current year. A lot of rime, work and energy gores into this planning. But is
your strategic plan really strategic?
It’s possible that much of your strategic plan is actually tactical in nature. During
planning sessions, we spell out our overall goals, our action steps for accomplishing
those objectives and our timelines for making it happen. Those are all critical steps to
take—but they are tactical.
Because we live an incredibly fast paced world, the financial services industry is
changing at a rapid pace. That makes planning beyond a year extremely difficult.
Despite the ever-changing financial services landscape, credit unions must examine
where they are going in the next three to five years (and not just next year) with their
strategic plan. How can you do that? Here are nine suggestions:
• Develop a strategic initiative that you know will take longer than a year
to accomplish.
• Identify a target market you currently are not reaching but know you should.
• Craft your facilities strategy (if you think facilities are indeed the way to go
strategically).
• Determine how to align your brand, your culture and your staff.
• Develop your value proposition and ask if it is relevant for the future.
• Examine the payment systems trends and develop a strategy for its evolution.
• Answer the question, “what do we want to look like in five years?”
• Create products and services that will resonate with the under-30 demographic.
• Review your organizational chart and examine if you have devoted resources in
the proper areas in order to achieve your desired growth.
Implementing those suggestions alone won’t make your plan more strategic—but it
does get you started on the right path. The best way to make your plan more strategic
is to change your mindset. Don’t think tactically and next year—think strategically and
long-term.
A part of your strategic plan does indeed need to focus on the tactical items for next
year. But as we make those next-year action steps, let’s also make sure we are moving
our financial institution in the right strategic direction for many more years to come.
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S T R A TE GI C
P LA N N I N G
P RI M E R
MARK ARNOLD
Helping mark credit unions for success.
“Knowing the
right questions
to ask and when
to ask them
can make all
the difference
between a
productive
meeting and
a waste of
several days.”
TEN QUESTIONS TO ASK AT YOUR STRATEGIC PLANNING SESSION
When going into a strategic planning session, focus is key.
Knowing the right questions to ask and when to ask them can make all the difference
between a productive meeting and a waste of several days. Consider the following
questions to ask when participating at your credit union’s strategic planning session.
• What is the one thing we must change about our credit union? What is the
elephant in the room issue that no one wants to talk about?
• What is our credit union’s value proposition?
• What can we do to engage our members better? What can we do to surprise
and delight them?
• What should your credit union say “no” to? What should our credit union
stop doing?
• What type of training program will we invest in this year for our employees?
We say employees make a difference but how are we giving back to them in
the form of training?
• How are we going to align our brand with our people?
• What will our technology efforts be this year?
• What is the spirit or culture of our credit union (fun, boring, tight, etc.)?
What is our credit union’s DNA?
• Where does our brand need help and how can we improve it? Do we have
core values and are we communicating and living those?
• When the annual calendar flips to December, what do we want to say we
accomplished that year?
Those are a few ideas to help you kick-start your strategic planning discussion.
They are designed as open-ended questions to start your executive team and board
of directors thinking.
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S T R A TE GI C
P LA N N I N G
P RI M E R
MARK ARNOLD
Helping mark credit unions for success.
“Aside from
execution,
planning is the
most important
thing you can
do for your
credit union’s
long term.
Why then, do
so many people
dread them?
It’s because
they often
lack the
magic formula:
P = FxF
(Planning =
Focus x Fun).”
HOW TO PUT ZING INTO YOUR PLANNING SESSIONS
Do you look forward to your credit union’s strategic planning sessions?
It’s unfortunate how many people don’t. Aside from execution, planning is the most
important thing you can do for your credit union’s long term. Why then, do so many
people dread them? It’s because they often lack the magic formula: P = FxF
(Planning = Focus x Fun).
This is a formula developed while conducting many planning sessions across the
country. To have a successful planning session you must be focused and participants
must have a great time. Let’s examine this formula by reviewing how this principle is
most effectively employed.
1 Focus
How many times have you participated in a strategic planning session that began with
a focus on strategic issues, but very quickly became a discussion about where you
should put your next branch office (a tactical item)? That’s not uncommon.
“It’s really easy to get too bogged down into processes and lose focus on the big
picture,” said Rory Rowland of Rowland Consulting.
Focus should actually start days or even weeks before the planning session with some
type of pre-work. Use a brief survey that asks each participant to identify strengths,
weaknesses, opportunities and threats (the infamous SWOT), as well as key areas and
key issues for their credit unions.
To really get everyone’s attention, Jeanne Murphy recommends an industry overview.
Murphy is a growth strategist and founder of Strategic Solutions.
“Sometimes I give people a state of the union overview about what’s happening in the
credit union industry and economy. This usually gets their attention fast as the trends
haven’t been great the past couple of years,” she said.
Here are some additional tips to consider:
Use an outside facilitator. If your credit union can’t afford one, consider swapping
CEOs as a professional courtesy. Their CEO can facilitate yours and vice versa.
Facilitators not only help keep you on track, they also have the objectivity to question
things that you might think are okay.
Bring in an expert speaker from the outside to address important topics. For example,
On the Mark Strategies recently spoke at a billion dollar credit union’s planning
session in California on strategies and tactics for reaching the Dot Com Generation.
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S T R A TE GI C
P LA N N I N G
P RI M E R
MARK ARNOLD
Helping mark credit unions for success.
Establish a purposeful vision. Murphy suggests including long-term outcomes for the
credit union AND the communities they serve. Remember to establish measurements,
in addition to goals, to be sure you’re on track with your vision.
Have your planning session off-site whenever possible. It eliminates interruptions and
puts all participants on a level playing field.
Define your planning sessions with one letter sized piece of paper. “Put all of the
goals from the planning session on one sheet of paper, and put them in the board
packets every month. Make it an agenda item to review that sheet at every board
meeting,” said Rowland. “If the planning session does not change behavior, it’s not
worth the time.”
2 Fun
Fun is a proverbial four letter word to some executives. That’s why it’s so important
to incorporate fun into a planning session. If nothing else, it relaxes even the most
intense people.
“When people are laughing, they get to a place where they are having a conversation
and making decisions that are going to affect people that are not in the room,” said
Randy Harrington, founder and CEO of Extreme Arts & Sciences, an organization that
specializes in providing in-depth analysis and customized solutions for change-ready
organizations.
There’s no doubt that incorporating fun into a planning session can yield outstanding
results. The question is, how do you do it?
Testimonial:
“M
ark will provide an
energetic approach that
will make you not want
to end your meeting.
My Board and Management Team can’t wait
to have him back for
our next session.”
—Todd Pearson, President
Arizona Central Federal
Credit Union
($400 million, AZ)
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“I think it’s important to have a team building exercise,” said Rowland. He recommends
two different resources for team building activities - Quick Team Building Activities for
Busy Managers by Brian Cole Miller and The Big Book of Team Building Games:
Trust-Building Activities, Team Spirit Exercises, and Other Fun Things to Do by John
W. Newstrom and Edward E. Scannell. Murphy uses Games Trainers Play by Bob Pike.
While these books offer tons of great ideas, you can also have people play two rounds
of darts. On the first round, instruct them to just throw the dart without aiming. On
the second round, instruct them to focus and aim at the target. In addition to having
fun, the game demonstrates that hitting a specific target on the board is more difficult
when you focus, but it also yields a more fruitful outcome.
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S T R A TE GI C
P LA N N I N G
P RI M E R
MARK ARNOLD
Helping mark credit unions for success.
“Wouldn’t it
make more
sense if we
could go into
a strategic
planning
session with
a little
knowledge
of things that
could derail
the entire
process?”
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FIVE REASONS YOUR STRATEGIC PLAN COULD FLOP
We put a lot into strategic planning these days. We analyze, proselytize and legitimize
them. In short, we agonize over the entire process. Questions like “Who should participate?” “Should we hire a facilitator?” and “Do we order donuts or bagels for the obligatory continental breakfast?” plague planners’ minds for months leading to the event.
Yet, despite all our best efforts (and tasty breakfast treats) sometimes the credit union
strategic planning process fails. We pour our hearts, souls and room temperature
orange juice (ok, we’ll lay off the breakfast wisecracks) into generating initiatives that
fail at an alarmingly high rate.
Wouldn’t it make more sense if we could go into a strategic planning session with a
little knowledge of things that could derail the entire process? Below please see five
sad (but avoidable) reasons why credit union strategic plans fail (and things you can
do to help prevent that).
•L
ack of commitment and budget dollars. This is a basic. If your strategic
planning process lacks the backing of key people (and the dollars to implement
all the neat new ideas you come up with) it’s sunk before it leaves port. Ensure,
beforehand, that senior management is onboard and prepared to commit funds
to the best ideas that come from it. Don’t put an initiative in the plan if you
don’t put the dollars behind it.
• Discipline. It’s wonderful to have your board, management and staff ready to
roll with the new strategic plan. But do they have the necessary discipline to
see ideas to fruition? To make the rubber meet the road? Think about it this
way: you may be totally ready and excited about your New Year’s Resolutions.
Most of us are. But what happens to most New Year’s Resolutions? January 2nd
happens. The same thing applies to companies and organizations (including
your credit union). Unless you’re ready—really ready—to make this thing
happen, all the best intentions will fly out the window.
• Staying focused. Strategic plans tend to follow one, three and five-year models.
One year is hard enough when most of us have a hard time remembering what we
had for dinner last night. You can easily see why a strategic plan can fail when
we don’t stay motivated over the long-haul. Try to establish road-markers and
rewards along the way as you check progress versus goals. Some might see this
as the “carrot on a stick” approach. Try to think of it as funneling power into your
credit union’s flux capacitor. To get back to the future, we need plenty of steam.
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S T R A TE GI C
P LA N N I N G
P RI M E R
MARK ARNOLD
Helping mark credit unions for success.
• Follow-up and measurement. If your favorite football team is 0-8 halfway
through the season, odds are someone is going to shake the branches. For your
credit union strategic plan to succeed, you must keep tabs on its progress and
ask for input along the way. If something isn’t working right, or not working at
all, don’t be afraid to make changes and alter course along the way. While the
journey of 1,000 miles may start with a single step, odds are those single steps
won’t be a straight line from points A to B. Be prepared to take detours.
•B
ad luck with past strategic plans. If your credit union has a history with
strategic plans, it’s possible that some elements, if not the entire plan, failed at
some point. Rest assured, your staff will remember these failures. It’s difficult
to get people hyped about your super-cool new strategic plan when they’re
snickering in the back row about how badly the last one (or two) bombed-out.
You may find their lack of faith disturbing, but history shows otherwise, at least
from their perspective. Be mindful of this if previous plans have met less than
glorious ends and be prepared to address past shortcomings honestly, while
building authentic excitement for this go-round.
Testimonial:
“Mark is absolutely
focused on defining and
obtaining goals and he’s
one of those rare people
who will ALWAYS make
your day better. He
provides amazing insight
and crystallizes a tangle
of ideas.”
—Eve Hernandez,
VP Marketing,
River City Federal
Credit Union
($157 million, TX)
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S T R A TE GI C
P LA N N I N G
P RI M E R
MARK ARNOLD
Helping mark credit unions for success.
CONCLUSION
Developing a strategic plan is serious business for credit unions. Countless hours and
dollars go into the process. Often, the successful outcome of this investment stems
primarily from forethought, execution and subsequent review. By following these
simple steps, your credit union will produce and execute a superior strategic plan that
benefits both your internal and external customers.
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