By Lisa Hochgraf
"Your economist cannot forecast the next recession," Bill Conerly, Ph.D., told participants in CUES' Execu/Summit in March. "What are you going to do about that?"
Conerly, an economist and president of Conerly Consulting, Lake Oswego, Ore., suggested that credit unions can deal with this reality by having flexible goals and a flexible stance. According to Conerly, Usain Bolt--the fastest man in the world--stays completely focused on making a straight and fast dash to the finish line. Such a set focus does not work for businesses in today's world, Conerly said.
"The old approach to corporate planning was, 'We come up with the one true vision of the future, and do plans for that one true vision of the future,'" Conerly said.
Then he asked attendees to think back to doing planning in December 2007 and asking, "What does 2008 hold?" To decide, most businesses looked back at 2007. They also asked economists, "What do you see in the future?" The average of what was predicted was nothing like what actually happened.
"In 2008, we got slapped in the face by the future," Conerly noted. A flexible stance about strategy and goals will be much more effective, he suggested, likening the position credit unions should take to the stance used by base-stealing great Michael Bourn, now with the Cleveland Indians. "He is ready to run," Conerly said, "knees bent, ready to steal second if he gets a chance. If he starts running, the pitcher may try to pick him off, so he’s also ready to dive back to first."
Conerly said credit unions can develop a Bourn-like flexible stance by looking at their operating plans and asking themselves, "What would I do if a recession hits?" and also "What would I do in a strong economy?"
Another key question Conerly identified was, "If you believed that the environment for your credit union would be less predictable, what would you want to change?" He suggested looking at sales/marketing, deposit gathering, loan underwriting, small business lending, staffing, and the balance sheet as potential areas of concern. What expectations do you have for the future of the economy and how it will impact your credit union? How will you be flexible?
Lisa Hochgraf is a CUES senior editor.
Read another post about Conerly's session, "How Current Economic Trends Impact Credit Unions." D
Register for next March's Execu/Summit.
