Enhancing the performance of our credit union is always in the forefront of our minds as board members. Board members have duties and responsibilities that should be taken very seriously. One of the primary functions of a board member is to set policy, plan the credit union’s course and make sure the credit union maintains its sound financial condition. 

credit union strategic planningOne specific duty includes working with the president and management team to develop objectives and goals for the credit union. Bottom line, it’s your responsibility and duty to formulate a strategic plan for the future success of the credit union. A strategic planning session is not only an opportunity to enhance the performance of the credit union, but it’s also an opportunity to strengthen the knowledge and performance of the board.

Three major components of any strategic plan are mission, vision and core values.  “Strategy” is the leadership’s sense of vision for the overall course and direction of the credit union for future potential. The purpose of strategic planning is to assure that the course and direction is well thought out, sound, appropriate and to assure that the limited resources (time and capital) of the credit union are sharply focused in the support of that course and direction. The process includes both strategy formulation and implementation.

A strategic plan is for credit unions that are serious about growth, building competitive advantage, prioritizing financial needs and providing focus and direction to move from planning to action.

Here are some common questions I get about strategic planning:

Does every credit union need a strategic plan?

Every credit union has a strategy which may range from a vague sense of direction to very sophisticated plans.It’s important to determine if our plan is vague or is it well thought out, sound, appropriate and do-able.A strategic planning session will assist us in making that determination.

We are already successful, so why should we plan?

Success is an indicator that the credit union has been sound and has had an appropriate strategy.It’s critical to determine if yesterday’s strategy will continue to be successful in the future.There is a great danger in assuming our past strategy is adequate without research and evaluation.

Can credit unions afford to formulate a strategic plan?

Experience reveals that management will devote approximately 2-4% of its time to practical strategic planning. In reality, structured strategic planning is not something more to do, but rather a better way of doing something already being done.

Most successful credit unions follow a systematic strategy development process. They start by developing or reaffirming their mission, vision, and values. From here they identify and perform an analysis of key issues, including the external and internal forces that will affect the credit union’s strategy. This is followed by the formulation of the new strategy where they determine the concrete goals and objectives that will represent the achievement of their vision. 

There are three steps of strategic development:

1. Crafting Mission, Vision, and Value Statements

The mission is a brief statement that defines the fundamental purpose of the credit union.It should include what the credit union provides to it’s members and inform management and staff about the overall goal they have come together to pursue.

The vision is a concise statement that defines the mid- to long-term (three- to ten-year) goals of the credit union.The vision statement is a guide for strategy development.It should be aspirational and inspirational – it could also be measurable.The vision statement provides a clear set of directions and expectations within which the entire strategy can be framed.

The core values of a credit union prescribe its desired behavior, character, and culture.

2. Strategic Analysis

With a clear picture of what it needs to achieve, the credit union must now perform an external and internal analysis that includes assessing the impact of industry trends and its own performance and positioning itself relative to competitors, as well as developing a detailed understanding of how it presently delivers value.This is done with external analysis, internal analysis and a SCOT (Strengths, Challenges, Opportunities, & Threats) analysis.

3. Strategic Goals and Objectives

With an identified planning horizon a credit union is now ready to identify objectives and strategies.These objectives and strategies will be formulated based on four perspectives which include financial, member, internal, and knowledge and growth.

In today’s world of high uncertainty, why plan?  Uncertainty is, indeed, a major problem in forward planning.  However, to make the decision not to plan is an ostrich-like approach.  In today’s world of greater uncertainty, there is a significant need for good strategic planning.

This guest blog post was written by Howard Bufe, AVP, Credit Union Resources, Inc.

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