Four Crucial Questions

Strategic planning is meant to spark a flame and inspire action, but too often this process becomes a routine exercise by senior management. The end result is adoption of a plan that reads too much like industry boilerplate. A way to break out of this mold is to invite employees to think strategically and contribute ideas—from their unique vantage points—about what the credit union could and should become.

Strategic thinking is a skill employees learn by doing. A good place to start this education is introducing the way your credit union does strategic planning—the process, the terminology and the planning calendar. Each organization approaches strategic planning a little differently and uses its own language to describe the process and outcomes. The CFO can be well suited to orienting staff about the credit union’s process, the annual planning calendar and all the working parts—from planning with the board and senior management to adoption of the formal plan, followed by development of a capital management plan and operating budget.

Four Crucial Questions

A straightforward explanation of the hows, whys and whens of strategic planning can help to demystify the process. In Cornerstone Advisors’ work with credit unions on strategic planning, we aim to keep it simple by relying on a framework that boils down to four essential questions: Where are we? Where could we be? How do we get there? What will the impact be?

A key advantage of anchoring strategic planning on this framework is that any staff member can apply these questions directly to his or her branch or department. Let’s look at how guiding employees to explore these questions can help transform strategic planning.   

1. Where are we? There are two components to this question. The first is to consider what’s going on externally in the marketplace and the wider industry and where the credit union stands among its peers and competitors. What’s changing, and how might those changes affect the credit union?

For individual employees, the answer to the question of where the credit union is now will take many forms. For example, a teller might be struck by the changing demographics in the market area served by her branch, where she serves an increasing number of Hispanic members. An operations specialist in the card division might ponder the acceptance rate of remote payments and crypto-currencies. A business analyst might focus on the rise of mobile banking. From those diverse views, credit union leaders settle on the external trends likely to have the greatest impact on their organizations and the best responses to those influences.

The second component of this question looks inward with a mini-SWOT analysis, an honest assessment of the credit union’s strengths, weaknesses, opportunities and threats today. Encourage employees to conduct this analysis from the perspective of an outsider. The goal is not to find reasons for self-congratulations. Instead, consider: How would someone outside the credit union look at the organization?

2. Where could we be? The aim in answering this question is to picture the future state of the credit union over the next five years. Employees can describe that future state in such quantitative terms as financial performance, change in assets and/or number of members, and fluctuations in sources of revenue or loan growth. But they can also envision “softer” aspects: What will the credit union’s culture look like five years from now? What will its delivery channels look like? How will the member experience be different? Each department head can also be challenged to create a vivid picture of the future. An HR specialist might focus on new forms of talent management, while a call center employee might think about how conversations with members will change when communication shifts from phone calls to text and online chats.

This stage illustrates the importance of giving all departments a voice in the strategic planning process. Today, for example, it’s crystal clear that the competition for talent and the effective deployment of technology are crucial. Therefore, IT and HR staff need to be involved in the formation of strategy.   
 
3. How do we get there? This is the stage of defining key priorities. A useful approach for credit unions is to structure these priorities in a way that moves past bland generalities to tell a story. Ultimately, the leadership team and board will agree on three to five priorities. It can be helpful to give these priorities a catchy title or a theme. An executive team might say, “Digital 2.0 is one of our priorities,” or “Service Leader for Small Business.”

In explaining this stage to employees, it may be useful to distinguish between strategic and tactical priorities. Strategic priorities differ in three ways from the day-to-day fundamentals of running the credit union. They require: (1) additional resources, (2) management attention and decision making, and (3) collaboration across different functions and departments. In combination, those requirements elevate a need to the level of strategic priority.  

4. What will the impact be? In answering this final question, the credit union formulates its “big, hairy, audacious goal” to accomplish over the next five years. Beyond measuring organizational growth in terms of assets and number of members or some other metric, ask staff members what key performance indicators they think relate to that goal and how those indicators might change over the span of the strategic plan. Relevant metrics might include penetration on a key product like checking accounts or increasing the Net Promoter Score from 45 percent to 65 percent.

These four questions provide a practical means for all employees to widen their view of what is happening throughout the credit union and, at the same time, to get a concrete feel of how they contribute to the business. And in return for inviting the participation of employees in strategic planning, senior leaders have a wonderful opportunity to view the business from the perspectives of frontline staff. What is the member experience really like? What are members saying about the credit union? What offers from competitors seem to resonate most with members?

Internal Intelligence

Managers may believe they have a good handle on the pulse of the credit union if they walk around their departments regularly and chat with employees. But it’s always good to measure this pulse formally with a short confidential survey that poses straightforward questions about strengths and weaknesses at the credit union. These surveys can pose questions like: What key issues do you think we should try to address in our plan? What’s something we could deliver to members that we are not doing today?

Using a web-based survey tool can be a really efficient way to get some great suggestions to pore over. We use surveys when we facilitate strategic planning with credit unions—at least a survey of middle management, senior managers and directors, and occasionally a questionnaire for all staff.

Opening up the strategic planning process can alleviate concerns about the direction in which management is steering the credit union and the reasons for those decisions. Some employees may view strategic plans more with fear than with hope about what strategic shifts might mean for them and their departments. By sharing the planning calendar and process and, more importantly, by getting the word out as the strategic vision takes shape, senior managers can better ensure everyone in the organization understands why the credit union is taking on new challenges. We recommend that all senior managers commit to sharing the same material about the strategic plan throughout his or her department to help solidify shared understanding and buy-in.

Hit the Books

As managers introduce staff to the strategic planning process and their role in it, they may benefit from a refresher for themselves. Harvard Business Review subscribers can find a wealth of articles there. The book Strategic Planning for Dummies is well written and offers a solid introduction to the subject. It’s an inexpensive synthesis of all the strategic planning work that has been done in the last 30 to 40 years. Classics such as Good to Great by Jim Collins and Good Strategy, Bad Strategy by Roger L. Martin are also terrific reads.

From the C-suite on down, every credit union employee should get in the habit of devoting at least an hour a week to reading industry publications (like this magazine) and online sources about financial services, especially with a future bent, like GonzoBanker; The Financial Brand, which focuses on marketing and the customer experience; and the work of Brett King on “Breaking Banks”.

One of the most positive benefits of finding formal ways to involve staff in strategic planning is an increased commitment across the organization to follow through to implementation, especially when the goal is to change the credit union as much as run the credit union. Most staff have no problem coming in and doing their jobs to run the credit union. Getting them to commit to changing the way the credit union operates and serves members can be a much more daunting challenge. Involving employees in the process that leads to those changes goes a long way to increase buy-in.

Steve Williams, CIE, a partner with CUES Supplier member and provider of strategic planning and ERM services Cornerstone Advisors, Scottsdale, Ariz., leads the firm’s strategic planning practice.