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There is a rumor going around that NCUA wants credit union planning to be strategic. NCUA might even like credit unions to prepare two-to-three year financial projections supporting their strategic plan. There’s another rumor that some credit union leaders don’t really like regulators telling you how to run the business. But, given the uncertainty that lies ahead, why wouldn’t you create a longer-term plan and financial projections even if NCUA had not suggested it?

credit-union-strategic-planningOne of the things we typically do as part of Credit Union Resources’ strategic planning facilitation is to conduct a pre-planning survey to get a feel for what planners are thinking. Some people are more willing to offer feedback in private than speaking up in a group. And, it helps us prepare for planning discussions. In a recent survey, credit union planners were asked, “What will be the the most important issues facing the credit union in the next few years?” Answers included some typical concerns like “attract and retain staff,” “compliance and regulation,” “Federal taxation,” and “improving loan volume.” There were also some “global” concerns – “possible collapse of our economy within the next year,” “devaluation of the dollar here and abroad,” “runaway inflation,” and the inevitable “increasing interest rates.”

There was no survey feedback relating to world war, drought, or pestilence but we might as well throw them in also. After all, political and religious unrest continues in Ukraine and the Mideast, cloud seeding has begun in the region around Wichita Falls in an attempt to stimulate rainfall, and an exterminator is fighting a losing battle with fire ants and grasshoppers in my back yard!

With all that is going on, strategic planners should consider a variety of factors; external and internal / good and bad, the probability of an event happening, and how the credit union should respond to maintain safe and sound service to members. For most credit unions, if the planning horizon is only six months to a year, you may not see a threat or an emerging opportunity until it is too late to respond.

Strategic planning should engage participants to look into the future. NCUA’s rumored request for a two-to-three year view is appropriate, even down to a multi-year financial projection. The board of directors is responsible for setting the strategic vision for the credit union. Armed with strategic direction from the board, credit union managers are responsible for establishing an annual operational plan (strategies and tactics) and budget to move the credit union toward achieving the board’s vision.

If you are a director, and if you are more concerned about the color of the wall behind the teller counter or the stripes in the parking lot than you are about the credit union’s long-term viability, you are not thinking strategically. Step back and take a longer view. The economy may be on the mend, or maybe not. Either way, your long-term, strategic insights will help the credit union prepare for future success.

By Dean Borland, SCMS, CUDE, VP Product Development, Credit Union Resources, Inc.

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