Putting Your Credit Union Leadership in the Hot Seat: Tough Question No. 2

How can you grow now and tomorrow?

By Shazia Manus, Chief Strategy and Business Development Officer, AdvantEdge Analytics

McKinsey & Company recently proposed a framework of three critical questions for C-level executives in aggressive pursuit of growth in the digital era:

  1. Where is your growth going to come from?
  2. How can you grow now and tomorrow?
  3. How will you set up a strong growth engine?

We examined the first of these questions in a prior post (follow the link above to view). In this article, we’ll walk through considerations for leaders who are thinking about future growth, and specifically the role partnerships can play in achieving long-term prosperity.

Question No. 2: How Can You Grow Now and Tomorrow?

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Just as ambidexterity is rare in humans, it’s an uncommon trait in business. Fully engaging your credit union’s brain trust in future state growth plans can be pretty strenuous – especially when today’s growth plan is in place and performing well.

Exploration requires people to enter uncharted waters in which floating aimlessly can lead to disaster. You do not have the benefit of experience in these waters, nor the data, to keep you moving in the right direction. Yet, standing still is likely to lead to even worse outcomes. Moving forward amid a series of unknowns requires testing, failing, testing again and maybe even failing again. That is uncomfortable for many leaders. But, it is how new discoveries are made.

Among the discoveries many growth-minded credit unions have made in recent years is that collaboration with non-traditional partners can be an ideal way to explore the next frontier. Consider Stanford FCU’s newly announced partnership with Google to formulate a digital checking option. Or, Consumer CU’s collaboration with Apple, Samsung and Google to facilitate the use of digital wallets. Tinker CU has added Amazon Hub Lockers to its branches to make life easier for the online shoppers among its membership.

The examples above are only the headline-makers. Beneath the surface, there are hundreds of lesser known partnerships reshaping the value credit unions bring to the financial lives of members.

Finding Your Credit Union’s Perfect Partner

How can your credit union link up with its own transformation ally or set of allies? It starts by putting the member’s problem or opportunity first (or as our Director of Product Management Jeff Allen says, performing an intense investigation of the user’s problem.)

If you know, for instance, that 60 percent of your membership is approaching retirement age, you may need a partner that understands late-stage investing extremely well. Or, you may be experiencing unprecedented social media engagement with Gen Zers whom you want to migrate into members. There may be an employer group in your area intensely focused on recruiting from this segment that could widen the door for your credit union.

Of course, formulating a partnership is more involved than finding someone with the right product or solution. You’ll also want to ensure there is philosophical alignment. After all, this is a growth strategy, so collaboration that can stand the test of time is the goal.

Getting Inquisitive with Potential Partners

A strategic partnership is like a marriage – you want to know your partner really well before hitching your credit union’s wagon to their star (or vice versa). Here are a few sample questions to consider as you talk with potential partners:

  • Are there synergies between your cultures, and especially, in your treatment of members/customers?
  • Can you agree on specific, measurable (and attainable) goals for years 1, 2 and 3?
  • Do you share a vision for the partnership orientation (i.e., how revenue sharing, branding, operations and leadership will work)?
  • How will scale impact your partnership strategy?

Taking a Closer Look at What Appears to be Working

As you consider partnerships through a future-state lens, you may also want to consider existing partners. Growth today requires leaders to look closer at what appears to be working well while also asking tough questions about what’s broken. Credit unions especially should resist the urge to renew partnerships just because that’s the partner they’ve had for two decades. Visions change over the course of 20 years. Where there was once alignment, there may now be a series of subtle detachments that need to be addressed.

Good growth strategy calls on credit unions to exploit and explore partnerships just as they exploit and explore their own value proposition. It’s a continual process you’ll get better at over time. We’ll explore this idea further in our next post on posing McKinsey’s third question: How will you set up a strong growth engine?