Wednesday, December 8, 2010

Strategic Plan #1 – Increase Member Loyalty

CUNA News Now carried a story yesterday titled, Report: Increased loyalty leads to higher loan volume

The article reported findings supporting the fact that member loyalty is directly associated with lending volume. The December 7th article reads, “Credit unions that want to improve their lending volume should look to increasing their member loyalty levels.” It points out that members classified as truly loyal fulfill three characteristics:

“1. They definitely would recommend their credit union to others;
  2. They definitely would contact their credit union the next time 
        they need a financial product or service; and
  3. They choose the credit union as their primary financial institution.”

That third characteristic caught my eye the most; choosing the credit union as the primary financial institution. I’m wondering, what does it take to make the credit union the primary choice?

Suppose you were to survey your members today, what percentage of them would be using your credit union as their primary financial institution? After reading the article, (can’t afford the cost of the full report) it seems to me that including an initiative in one’s strategic business plans for 2011 to increase member loyalty might make good sense.

As for tactical applications, let’s be serious and not fool ourselves. Increasing loyalty requires much more than making donations to local charities or serving cake on member appreciation day. I’m of the opinion that it involves taking the credit union to a whole new level; a whole new experience for both member and staff. 

This means that the credit union must not only be on parity with its chief competitors when it comes to products, services, ease of use and access, low fees and high yield, it also must provide the member with an experience that excels beyond his or her experience of other similar institutions. Let me explain.

When I worked at The Ritz-Carlton, I learned what it means to create an experience, one that, "enlivens the senses, instills well-being and fulfills even the unexpressed wishes and needs of our guests." For The Ritz-Carlton, guest loyalty was built on guest satisfaction and that satisfaction was delivered, consistently, day in and day out, throughout all the hotels of its chain, worldwide. Satisfaction was not a tactic existing externally of the “Ladies and Gentlemen” forming The Ritz-Carlton team. No, the desire to provide satisfaction and anticipate guest needs existed deep within each of us. We were trained in it. We discussed it every day at line up. It defined our culture. It was our brand. 

If credit unions are serious about increasing member loyalty, perhaps a simple lesson taken from The Ritz-Carlton might prove to be of value as a starting point. How we define our culture and how we express our brand will determine the quality of the experience we wish to give our members.

While I believe we already have all the ingredients to take credit unions to the next level, I wonder if we’re ready to let go so we might rediscover the common culture and brand we all share, the same one to which Filene himself was so impassioned.

Tuesday, November 30, 2010

Let’s not give consumers any good reasons to choose a bank over a credit union

If there was ever a “KEY” message that should be included among all those promoting credit unions to consumers as the best choice for managing financial services, it’s this — Text "MYCOOP" to find a surcharge-free ATM near you.

All too often, I hear consumers say that one of the primary reasons they use a bank is to have convenient access to ATMs, particularly when they travel. They believe credit unions do not offer such widespread access.

So knowing what we know, what are credit unions doing to eradicate such misconceptions?

I recently came across this post on the home Web site of Xceed Financial Credit Union (Xceed Financial Credit Union). There it was, plain as day on the home page. Text "MYCOOP" to find a surcharge-free ATM near you. So I tried it out and it worked perfectly.

What a convenient tool I thought! So why is this message not plastered all over the place? Why aren’t other credit unions promoting it as well? Certainly we are cooperatives and in this particular case what is good for one is good for all.

Then I thought that perhaps it might be that we have forgotten one of the fundamentals of effective communication and brand marketing; you have to tell them again, and again, and again . . . and, not just on one channel, using one medium, but across all media and all channels.

Let’s not give consumers any good reasons to choose a bank over a credit union.

*  *  *
Text "MYCOOP" to find a surcharge-free ATM near you.

The next time you're out, about, and short on cash, you can now
use your cell phone to find any of 25,000+ surcharge-free CO-OP ATMs.

Simply send a text from your cell phone to "MYCOOP" (692667).

In the body of the text, enter your address (with city, state, and zip)
or intersection (with city and state).

In about 30 seconds, the service will reply with the nearest
CO-OP network surcharge-free ATM.

If you need to find additional ATM locations,
simply reply "MORE" to the message and another
listing of surcharge-free ATM locations will be sent to your cell phone.

The locator service is free but standard text messaging rates do apply.

*  *  *

Thursday, October 28, 2010

Suppose Credit Unions Had the First Say in Resolving Corporate Credit Union Failures

During a recent dinner conversation with a couple of fellow cooperators in Washington, D.C., the topic turned to corporate credit unions. There’s no denying it, corporate credit unions have to be one of the hottest topics within the credit union community.

Ever since March of 2009 when the National Credit Union Administration (NCUA) took U.S. Central and WesCorp into conservatorship, corporate credit unions have dominated the headlines like never before. NCUA’s actions prompted the entire credit union industry to take a much closer look at all the corporates, eventually leading to a deeper scrutiny of the management and composition of their investment portfolios. The exercise continued further to include review of their value in comparison to other providers, their structure, organization, and their role within the credit union system. Today, a number of leagues are hosting executive committees to evaluate the role of corporates and how they might be structured going forward, that is, if there can even be a future for them within the framework of the revised corporate rule.

However, in retrospect, suppose there was a different process in place for stepping in to rectify the failing organizations? Suppose the insurance fund resided in the hands of credit unions and credit unions themselves were authorized to remedy the situation before it was passed over to the regulator as a final backstop?

OK, I realize that to operate as a legitimate financial organization in the United States, there are federal and state rules governing how the organization is structured and allowed to operate. But just suppose with me that the equation was different.

Suppose NCUA only existed as the last resort and it was left to the credit union system to have the first crack at resolving the crisis. How would a course of action by the credit union community differ from that exercised by the NCUA? Would it differ or would we all be out of jobs at this point in history?

When one considers the cooperative business model and what it requires of those who are engaged in it as owners, one has to wonder how credit unions might handle such failures if the responsibility resided first in their hands.Is such a reality even possible?

Saturday, October 2, 2010

12 Ways to Observe National Co-op Month

October is National Cooperative Month. Since 1930, Cooperative Month has celebrated the fact that cooperatives are different and make a difference in the community because of their businesses model defined by seven cooperative principles:

Voluntary and Open Membership
Democratic Member Control
Member’s Economic Participation
Autonomy and Independence
Education, Training, and Information
Cooperation among Cooperatives
Commitment to Community

This year’s theme highlights trust and member service and characterizes the cooperative difference. 

As you look for ways to make your observance of Cooperative Month and International Credit Union Day (Oct. 21) a memorable success, here are 12 ideas that can help.

  1. Make your members feel like owners. Host an Owners’ Day Party.

  1. Review and closely examine the definition of a cooperative. Understand the meaning of the business model it describes. Ask yourself what makes your organization a co-op?

  1. Have a meeting with staff to identify the Seven Cooperative Principles and evaluate how your organization embraces each one. Are they posted publicly for all to see?

  1. Invite the local business reporter to the credit union to meet and greet the staff and your members. This is a great way to help the reporter develop a deeper understanding and appreciation for credit unions and the cooperative difference.

  1. Participate in the International Credit Union Day webcast, Celebrating Our Cooperative Heritage. It is scheduled for October 21 at 3 p.m. EDT. Encourage your board and executive staff to view the interactive discussion. Registration to participate opens soon at

  1. Develop special messaging to your members talking about co-ops, the cooperative difference, and what co-ops stand for in the community. Display the messages in your lobby, in electronic statements, in your mobile banking application, on your credit union’s website, and on your social media channels like Facebook and Twitter.

  1. Sponsor an art competition for youngsters of the credit union asking them to draw a picture of a cooperative. Publicly post the images in your lobby and your website. Offer awards to the best drawings.

  1. Leverage your relationships at the local chamber of commerce or rotary club to serve as a presenter during the month of October to talk about the cooperative business model and the values and principles on which it is built. As part of this community education effort, talk about your credit union as one of the many organizations built on that model.

  1. Sponsor an essay contest in collaboration with the local high school. Offer a grand prize of $1,000. Make the essay topic: How cooperatives and their distinct business model deliver better value to the American consumer.

  1. Host an open house of your credit union. Roll out the red carpet and invite folks from the community to stop in and have a coffee, have a donut and find out what a credit union is all about. Include a local radio station to broadcast LIVE from the credit union branch to further attract public participation in the open house. And don’t forget to invite the public to bring along cans of food for donation to the local food bank!

  1. Cooperate with other co-ops in your community to create an organized referral effort where each cooperative helps to promote awareness of one another.

  1. Organize a community day where the staff of your credit union goes into the community to help low-income and underserved families do repair work, painting and cleaning on their homes. Invite your members to join with staff, shoulder-to-shoulder in providing these services on Community Day as a way to mark National Cooperative Month—People Helping People.

Also be sure to plan your Co-op Month activities during the week of October 17 - 23 to help create a nationwide cooperative awareness week. And, don’t forget to make use of informational resources and prepared materials available from:

Credit Union National Association—CUNA

The National Cooperative Grocers Association—NCGA

The National Cooperative Business Association—NCBA

The International Cooperative AllianceICA

Sunday, September 5, 2010

Lip Service or Conviction

I submitted a blog exclusive to the Credit Union Times last Friday. In this posting, I opine on what I see as an irony—two major issues are concurrently knocking at the doors of credit unions, seeking a response. One issue requires credit unions to decide whether to maintain settlement and investment services within the cooperative credit union system. The second is a global opportunity to promote the value proposition of credit unions (our cooperative business model and its values and principles) during the United Nations Year of Cooperatives in 2012.

The convergence of these two issues at the same point in time will undoubtedly require credit unions to re-examine their understanding and support of the cooperative business model. I just think it would be an embarrassment if a decision on one issue was contrary to the other. 

When all is said and done on this pivotal point in time, I wonder if history will record credit unions as only paying lip service to the principles they so boldly profess? Or, will the decisions credit unions make on these two issues reflect the convictions they hold for the distinct value that can only come from a cooperative enterprise? 

How do you see this scenario unfolding? Share your thoughts on the Credit Union Times website at Living the Credit Union Legacy.

Wednesday, September 1, 2010

What Kind of Professional Are You?

I had a conversation with a dear cooperator friend of mine yesterday that focused on credit union philosophy. As we chatted, she shared an insight that made me suddenly pause and reflect on what credit unions really mean to me.

I’d like to share her insight with you as well, so you may also consider how you value credit unions.

She said, “Are you a communications and PR professional working with credit unions, or are you a credit union professional working in communications and PR?”

After a brief reflection, I had to admit that when I first started out in the credit union industry more than 10 years ago, I was the communications and PR professional. Today, however, there is no doubt. I am first and foremost a credit union professional practicing communications and PR.

A lot of factors contributed to that conversion, most especially my becoming a development educator and participating in the Emerging Co-op Leaders program sponsored by NASCO (North American Students of Cooperation).

However, I’d have to say the greatest influence came from befriending many individuals within the movement, national leaders and rank and file executives alike who believe wholeheartedly that the credit union/cooperative business model we espouse makes sense, delivers value and makes for a better world community.

If you believe you are first and foremost a credit union professional, don’t be shy about sharing your convictions. You never know how you might influence another person’s life’s journey or for that matter, the industry you have come to love.

Wednesday, July 21, 2010

A Question of Balance

I recently participated in a meeting of credit union development educators in Las Vegas. “DEs,” as we are affectionately known, are at times referred to as those who drank the “Kool Aid.”

Well, I’m not sure if it was Kool Aid I drank, but one thing is certain. When it comes to DEs, never underestimate their passion for credit union philosophy and the cooperative values and principles that define our credit union business model. Such enthusiasm contributes to the ongoing vitality of the credit union system, helping us to maintain our roots in all that makes us distinct within the financial services marketplace.

Yet, passion alone for cooperative philosophy and values should not be seen as the summation of what makes credit unions tick. Let’s also remember that as co-ops, credit unions are first and foremost a business.

Without efficient business strategies, objectives and plans tailored to deliver services to the owners of the credit union as intended, our ability to care for the community, to help the underserved, and to exercise social and environmental responsibility would be curtailed, if not, disabled.

Both business operations and cooperative philosophy must go hand-in-hand. They must constantly influence and challenge each other if we are to produce the “credit union experience.” However, bridging the business aspects of a credit union with its distinct philosophy can be quite a task.

I see it as a balance.

Credit unions require a healthy balance of financial business principles and acumen with a philosophy defined by a set of seven cooperative principles and values. Tilt too far toward the business side and we become no different than a bank; too far to the other and, well, you get my point.

And just as it is in riding a bike, balance becomes a lot easier to achieve when moving forward than standing still.

This might explain why at times we experience a certain level of tension and uneasiness within the credit union community. (Could it be from trying to maintain a balance while standing still?)

For example, our movement has staunch co-operators, individuals who live and breathe credit union values and philosophy. We also have folks who at times appear like they belong more in a banking office than within the credit union environment. Stand still and the differences in philosophies between both groups may be startling, but move forward, together in cooperation, and something wonderful occurs—a natural balance of the philosophy and operations begins to take shape.

However, what happens should we find ourselves standing still, refusing to cooperate, focusing on the differences, and forgetting that credit unions are cooperatives?  I am of the opinion that is where we as a credit union community are. We have fallen “out of balance.”

In recently talking with a variety of leaders from throughout the credit union community, along with reading news articles and letters to the editors as published in the trades, I feel that this “out of balance” impression I have is growing more prominent each day.

Many of the executives with whom I spoke said that trust among one another today is at an all-time low. Chapter gatherings, once an opportunity to network, share and learn from each other are far from what they used to be. A growing number of volunteers and executives alike are forgetting their cooperative roots and the principles defining the business model entrusted to their care. Cooperation with one another is being supplanted by walls of separation where one ego is pitted against another, one credit union business against that of another. This is not what credit unions were meant to be!

All anyone has to do is talk to some of the veterans in our movement and he or she will quickly hear them say how we have changed and lost our sense of direction as a movement, or as I maintain, our balance. I’m afraid that if left unchecked, this will all eventually fester, contributing to the demise of credit unions sooner than later.

Today, we find ourselves at a critical point in our history, unlike ever before. If we are to survive, I believe we desperately need leaders with the charisma of Filene and Bergengren. And, we need a rallying cry! We have to find a way to come together in cooperation so we can harness the strength one unified movement produces, for only this level of strength will help us overcome the challenges we are facing.

And, we ought to start moving forward right now because in less than two years, we, within the credit union sector, will join with our cousin cooperatives throughout the world to celebrate the United Nation’s Year of the Cooperative.

With 2012 right around the corner, will the testimony we bear for ourselves and our movement reflect a unity of strength and cooperation? I can only say for now that how we mark this occasion remains a question of balance.

“See the writing on the wall, hear the mirror's warning call . . . Time is now to spread your voice; Time's to come there'll be no choice.” (From the album, “A Question Of Balance” by The Moody Blues, 1970)

Monday, June 14, 2010

Make Members Feel Like Owners: 10 Ways to Get Started

In a recent blog submission to the Credit Union Times, I discussed my thoughts on making ownership the credit union value proposition.

I related some personal experiences at credit unions I joined, recalling that none of them ever made me feel like an owner. Why owner? Well for me, being assigned member status is both overused and overdone in our culture. Everyone is offering membership of one kind or another; from hotels to grocery stores.

On the other hand, if the emphasis was placed on being an owner, a whole new sense of loyalty and allegiance would come into play.

I see ownership as a way to create a more profound and vibrant bond, albeit one that also requires me to relinquish a certain level of complacency, becoming more engaged in the enterprise. The dynamic ushers me to the front and center of the organization, creating for me a vested interest in seeing the organization succeed and prosper.

You can read the entire blog submission at Credit Union Exchange

In the meantime, since I’ve proposed discarding the term “member” in favor of “owner,” I’ve put together a list of 10 ways to help you get started in making your credit union users feel like owners. E-mail me for a PDF copy.

10 Ways to Get Started

I. Key to the Credit Union
At sign up, give the new owner the Key to the Credit Union. Like the Key to the City, the Key to the Credit Union is a symbol and gesture, representing a special bond of affinity between the recipient and the credit union.

II. Honorary Welcome By the CEO
Upon joining, extend the new member a personalized welcome by the CEO or another Chief Executive. As an example, at the start of orientation at The Ritz-Carlton, the entire leadership team of the hotel, the General Manager to Head Chef, personally greets all the new employees. They made the time to do it because they viewed the new employees as important, and what an impression it made!

III. Owners’ Meetings
Hold monthly meetings for the owners (not to be confused with Board Meetings) focusing on informational and educational topics pertinent to the owners, and use multiple channels to attract participation; in-person venue, podcast, webcast, video recordings, etc. In addition to hearing from the CEO and CFO, other presenters may include a board member, city council rep, police chief, local doctor, state senator, etc.

IV. Monthly President’s Summary
Include a summary of the month’s operations with the owner’s monthly statement

V. Referral Dividends
Provide some type of dividend to an owner when he or she gets a new owner to join the credit union. The dividend may take the form of money, a service, or a donation to their favorite charity.

VI. Recognize Owner Birthdays
Acknowledge an owner’s birthday by sending a card, or giving him or her two movie tickets or a discount coupon for groceries at a local food co-op, or a dinner at a local restaurant.

VII. Owner’s Lounge
Within each branch, create an owner’s lounge, a workplace away from home for the owners. This would be akin to Delta Airline’s Crown Room.

VIII. Concierge Service
Provide owners with a concierge service to handle routine services such as making dinner reservations, ordering flowers, etc.

IX. Owner’s Hotel Discount
By working together with other credit unions and co-ops (cooperation with other co-ops), establish an “owner’s rate” with a hotel chain. The rate is low and consistent at all of the hotel’s locations.

X. Ownership Card
In cooperation with other credit unions and co-ops, as cited in number IX, present the new owner with an Ownership ID Card. Upon presentation at other co-ops, the owners receive a discount for their role as owners of a credit union.

By Walt Laskos, CUDE
June 2010

Wednesday, June 2, 2010

The Key to Consistency in the Brand Experience of Credit Unions

Most marketing and advertising execs would agree that a brand is the total experience one has of an organization. This includes its history, reputation and the caliber of its staff; its products and services, how they are packaged, priced and named; its style of communication and advertising.

Let’s now apply the same definition to credit unions.

If the very nature of a credit union’s brand is the experience we have of the credit union as previously defined, can we ever possibly hope to establish a national branding campaign for America’s credit unions? Such an effort would appear to remain forever evasive to our grasp simply because there could be no consistency. Credit unions are all over the map when it comes to providing one common, consistent experience of what they are and what they stand for within America’s financial services marketplace. Or, is the achievement of consistency much simpler and accessible than we think?

My personal experience of brand development and management came when I was employed by The Ritz-Carlton back in the late nineties, when the hotel company was seeking to capture its second Malcolm Baldrige Service Quality Award. As a member of the leadership team, we all worked very hard to earn that second award. By doing so, we proved the first Baldrige award was no fluke. We proved that The Ritz-Carlton was by far the best, par excellence, when it came to lodging accommodations and service.

One of the branding lessons I learned during my employment at The Ritz-Carlton was the importance of consistency. It was extremely important for a guest to receive the same, exact, five-star Ritz-Carlton experience whether the guest was staying at our Dubai property, the Marco Island resort or at our Marina del Rey, California, property where I worked. Consistency meant that a guest always knew what to expect and what to count on when walking into any Ritz-Carlton hotel, anywhere.

That consistent emotional feeling associated with pleasurable memories of the finest quality in accommodations coupled with attentive and personalized service, are at the foundation and strength of the Ritz-Carlton brand. Delivering that value proposition was drilled into us, over and over again as “Ladies and Gentlemen serving Ladies and Gentlemen.” We all lived by the Ritz Credo, “The Ritz-Carlton Hotel is a place where the genuine care and comfort of our guests is our highest mission. . .” Such efforts further defined our brand and the Ritz-Carlton way. And, the experience was exactly the same for every property, everywhere throughout the world.

Can the same be said of consistency across America’s many credit unions?

Certainly there are credit unions distinguished for having a very strong presence among the underserved, compelled to provide an alternative to the local payday lenders. Others venture down a different path, being known more for their ability to deliver a greater rate of return or perhaps valuable educational programs aimed at ways to save or how to purchase a house. Some credit unions carry a reputation for their devotion to serving their members, while others for their spirit of cooperation in the community and among other cooperatives.

While I see no departure from such healthy diversity among credit unions, all of which, of course, results from the corporate or civic nature inherent in the membership segment served by the credit union and the management style of their executive team, I have to wonder if such diversity prohibits anyone from having a consistent experience of a national credit union brand, from one shop to another.

At first glance, it may appear not possible but if we look deeper we will discover that consistency is possible provided credit unions fully recognize and adhere to a value proposition that’s inherent in their nature and business model. It’s a value proposition that’s common and consistent to every shop regardless of the seg they serve. The value proposition I speak of is our cooperative principles.

I believe a national branding campaign for credit unions is possible and would be highly achievable if we based it on our cooperative principles. Emphasizing our not-for-profit status or even member ownership does not adequately approach the pervasive power of our distinct cooperative nature, defined as being,
- Democratically controlled by the members;
- Offering a return based on a member’s economic participation;
- Maintaining an autonomous and independent structure;
- Having voluntary and open membership;
- Providing education to members;
- Extending a hand of cooperation to other cooperatives; and,
- Demonstrating a genuine concern for the community.

Let’s face it; we all don’t have to be exemplary in how we practice these cooperative principles or measure our performance or allegiance to the movement by the depth of our adherence to them.

All I’m suggesting is that they will always remain the bedrock by which the very nature of credit unions are defined. While they may and should be hung publicly in our lunch rooms and board rooms, I believe they can also serve us very well as providing the framework for a national branding campaign.

So the next time there’s talk about a tagline for your credit union, consider one that other credit unions could use, one that offers consistency in message and values, and one that would certainly embrace our common cooperative value proposition.

My suggestion: “A Member of America’s Cooperative Family.”

Tuesday, May 18, 2010

Why Must Credit Unions Resemble Banks?

Your credit union offers financial (a.k.a. banking) services to people, right? Then why is it that the venue where those financial services occur resembles a typical, run of the mill, bank branch? What kind of a perception does that setting communicate to those who use your credit union?

Seriously, can the same functions occur without teller windows and a teller line? Does the building have to be called a “branch?”

If I recall correctly, the now defunct WAMU some time ago introduced a different design and layout for all of its “branches.” Tellers sat at small cube-like desks. The atmosphere was much more informal and comfortable. The change was widely heralded among WAMU’s diverse customer base.

In the mid-nineties, back when I was working for KeyCorp in Cleveland, Ohio, the bank introduced a campaign to redesign its branches into “financial centers.” Key undertook the initiative to appeal to small business entrepreneurs, offering them work stations, Internet access, and even in certain locations, an adjoining Starbucks kiosk. The move was intended to better acclimate customers to an atmosphere supportive of much more than teller transactions. Key’s Financial Centers were meant to be your office away from home.

While Key Bank may not have succeeded in following through with transforming all of its neighborhood locations to “your office away from home,” Starbucks, on the other hand, certainly has filled the void. Today, Starbucks is much more than a location to purchase coffee! Just look around next time you stop in for a latte. Now suppose a credit union were to support that same kind of environment?

With credit union locations all across America, how should we be re-designing and re-positioning our physical locations to be more than a venue meant to simply deposit money or withdraw cash?

Maybe we can start by making them look a lot less like “bank” branches? I don’t know about you but the last time I walked into a bank branch followed by my credit union, I didn’t see much physical difference outside of more smiling faces at the credit union.

Is it because financial activity dictates a certain look which we are obligated to use without question? Maybe it's so. You tell me.

All I know is that credit unions stand for so much more than banks. If that be true, then let’s start to find ways to creatively make our credit unions look more like “Owner-Centers,” clearly recognizable as being part of America’s co-op family.

Tuesday, April 27, 2010

A REAL Solution For Service

I participated in a webcast today where a number of folks provided valuable information and commentary about the REAL Solutions program ( ).

In case you haven’t heard about REAL Solutions, it was established by the Filene Research Institute in 2004. It is a dynamic program providing credit unions access to tested business models and strategies in order for them to better reach and serve new (or developing) consumer markets. In 2007, REAL Solutions became the signature program of the National Credit Union Foundation.

The primary goal of REAL Solutions is to increase the number of credit unions that attract and serve young adults, immigrants, minorities, disabled citizens, seniors, and other low-wage and low-wealth working families. To be successful in meeting the needs of these consumers, credit unions must offer attractive products that are mutually beneficial to both the credit union and the consumer. To assist the credit unions in that effort, REAL Solutions transfers programs, information and skills to senior staff of state credit union leagues and associations. From there, each state league or association further adapts the program to meet its own unique priorities and that of its member credit unions as well.

Today REAL Solutions supports the outreach efforts of 650 credit unions in 34 states. Oh, and lest I forget, “REAL” stands for “Relevant, Effective, Asset-building, Loyalty-producing” Solutions.

Sounds good, doesn’t it?

So, why is it then that in a movement obsessed with a mantra of people helping people; a movement motivated by a distinct set of values and principles (See Rochdale Principles, particularly member education and concern for community); a movement which takes great pride in its ability to serve the underserved, there are only some 654 credit unions out of thousands and 34 out of 50 states participating?

If the programs and expertise provided by REAL Solutions are tried and tested, the best of the best, then wouldn’t one think it’s a no-brainer to see credit union folks eagerly lining up to tap such a valuable resource? Or, are the remaining shops already maximizing the effort with their own initiatives?

After all, the REAL Solutions program not only enables a credit union to LIVE the business philosophy it preaches everyday, but to add to its bottom line by reaching out and attracting many new members in a manner that will enhance its brand identity, both in the financial services marketplace and in the local community as well.

Wednesday, April 14, 2010

Maintaining Our Edge

I came across a Tweet the other day that startled me. It was a re-tweet from James Lay in Utah, a credit union social media expert. It read:

“Listen up Houston CUs RT @adrienne78 I did not feel a warm greeting by more than one CU in my area but bank smiles and knows my name.”

Could this be so? Are credit unions starting to slip in the gains they achieved during the recent recession?

There’s a saying among surfers that once you climb to the crest of a wave you have to work all the harder to stay there!

Are we working harder to maintain the edge we realized during the past two to three years?

To do so, we have to continually look for new and exciting ways to maintain the buzz about the value credit unions have to offer, not only all the good things we delivered during the recession but the benefits we still can provide today and into the future. We have to do everything we can to hold on to those new members who walked through our doors the last couple of years, deeply frustrated by the behavior of banks.

There should be no doubt among us in knowing that right now the banks are shoveling tons of money as well as sweet, sweet honey — BIG TIME — at consumers to win them back.

Are we just going to sit there?

Tuesday, March 16, 2010

Is This “Owner-Thing” Really Lip Service?

I was in Las Vegas last weekend on a family outing and from all that I had observed I’d have to say we’ve emerged from recession and are on the road to recovery!

Although there seemed to me to be a lot more penny slots on the gaming floors, all my other empirical observations—crowds of people gambling, dining, and going to shows—suggested that either all these folks, representing a cross-section of America, were out for their last binge or they all had their fill of the recessionary blues. My guess is the latter. It’s time to move on. Anyway, who would want to lag behind and wallow in the pain of the past few years?

Yet, amidst all the encouraging signs I witnessed, I still couldn’t help but think about my own recessionary pain and how it had gnawed away a sizable chunk of my 401k savings. "Should I really be in Vegas," I thought.

Yet, the truth of the matter is this—life goes on.

There’s nothing more I can do about the losses in my 401k account now. What’s done is done. Surely I can’t point a finger at CUNA Mutual, even though they manage the various portfolios that make up my 401k account. Nope, that’s not going to work. I just have to accept the fact that I sat there like a lug and did not take any precautions like rearranging my investments, placing them in the safest portfolios before the world was rocked by the financial collapse. Why is it always so hard to come to that conclusion—to accept the responsibility and do what needs to be done, no matter what.

I read the Wall Street Journal every day. I follow the commentaries of many economists. All the trends pointed in a negative direction. Yet, I just sat there.

With ownership comes a price—responsibility—and in this particular case, I failed to exercise it. You can now bet going forward, though, that I won’t be making that mistake again. I promise you.

And, I’ve also come to conclude that the same lessons I learned about ownership and responsibility also apply to a world governed by the principles of the cooperative business model. In that world, should it not be true that the responsibility for the governance of the organization extend well beyond a board of directors to the owners as well?

If indeed those who participate in a co-op are considered its owners, then shouldn’t they enjoy a primacy in determining how the business is run? At what point should they exercise that responsibility?

If that is not the case, particularly among credit union owners, why then are the owners willing to surrender that right? Or is it that this "owner" thing is really lip service?

Come on now, how many owners showed up at your credit union’s last annual meeting? Or, maybe I should ask, how many owners did you want to show up at your credit union’s last annual meeting?

Ownership brings with it a level of responsibility; a responsibility for the end-results and for the performance of the board and management. Ownership by the members is a critical distinction that makes a cooperative business model different from an investor-shareholder model.

Put yourself in the shoes of a restaurant owner. While you might hire a chef and perhaps someone to manage the business for you, I’d be willing to bet that you would still not sit idly by but make sure your expectations for what’s on the menu, for how customers are treated, and for how the business is earning a profit are all met. After all, it’s your restaurant. You are the owner! Ultimately, you are responsible. If something goes badly wrong, you know whose phone will be ringing off the hook.

Perhaps this is why I have become more troubled than ever these days when I read articles in the credit union trades calling for an investigation into the causes that fueled the losses within our industry. Who’s to blame? Would any investigation serve as an indictment of the owners as well?

While I agree it’s vitally important to understand what contributed to the demise of so many portfolios (so that we can take the proper corrective action to ensure this does not occur again), I hear nothing being discussed about the role of ownership at a financial cooperative. What are the owner’s rights, responsibilities and yes, even the expectations? How does that get passed on to the board? And most important, should the board at a credit union function in an identical manner to a board at, let’s say, a bank?

Has the role of the member/owner in the credit union segment of all the world’s cooperatives been reshaped where today the responsibilities of ownership are no longer viable; no longer reflective of the Rochdale principle by which a credit union is defined?

Monday, February 22, 2010

The Seven Cooperative Principles: How Committed Are We?

I’m quickly learning that any calls for credit unions to pause and rediscover their roots might prove to be a futile exercise if we credit union folks don’t also stop to consider how much we are truly willing to embrace and actualize the real essence of being a cooperative. I’m referring to the Seven Rochdale Principles associated with the cooperative business model (

How committed are we to the principles, or do we find ourselves picking and choosing what fits best to meet our own particular needs?

I’m willing to bet that many draw a sharp distinction when it comes to credit unions versus cooperatives. It would be cool to hear arguments supporting the thesis, but quite honestly, is there really a distinction? In my mind’s eye—no.
Yet, there have been numerous occasions when I’ve heard tenured credit union officials shutter from sharing their thoughts and beliefs about co-ops and our defining principles and values, acting as if such discussion was reserved for the hippy communes and flower children of the ‘60s.

Why is that so? A wealth of factual evidence supports the cooperative business model and everything it stands for—its principles and values—as being a solid and successful manner of conducting business.

Such success accounts for the move by the United Nations to recognize the valuable attributes and contributions flowing from the cooperative business model, and the value we bring to both the marketplace and lifestyle of millions. The UN’s proclamation that 2012 be The Year of Cooperatives sets the stage for all the eyes of the world to look at us—yes, credit unions as well. What will folks see?

In the Nov/Dec 2009 issue of the Cooperative Business Journal (, Dan Mica, President/CEO of the Credit Union National Association, talks about the relationship between credit unions and cooperatives in a full-page article. One bright spot he points to is the Cooperative Alliances Committee, formed to foster mutually beneficial business- and advocacy-related partnerships between credit unions and other cooperatives.

Just imagine how much we all could benefit and grow from such partnerships? For instance, imagine the power of one unified cooperative voice in all cooperative-related advocacy initiatives.

So what’s stopping us?

Mr. Mica summed it up quite directly, saying, “The Cooperative Alliances Committee has discussed that more of these partnerships can form if we overcome a persistent hurdle: the lack of a shared identity between credit unions and other cooperatives. I am convinced that if credit unions and other co-ops had a greater recognition of our shared principles and history, we would see greater interaction between these cooperative sectors.”

And, “greater interaction” for me spells out greater prosperity for us all.

Mica strikes an important chord. So, how committed are we to the Seven Rochdale Principles? Are we willing to accept everything that they stand for?

The question reminds me of a story I heard quite some time ago. It helped me to better understand the price of commitment and how much further I had to go attain the price.

Remember a high-wire acrobat from back in the 70s named Karl Wallenda? He was the founder of The Flying Wallendas, an internationally known daredevil circus act famous for performing death-defying stunts without a safety net.

Well, on one of Karl’s famous walks across a high wire strung between two towering structures, a young fan named Peter was on the ground standing among the crowd, viewing Karl’s carefully calculated steps across the sky. In watching, he became so mesmerized and excited by Karl’s skill that he sought him out after the walk, proudly professing his deep esteem for Wallenda and the unique abilities he embodied.

“Peter,” Wallenda said, “If you really believe I’m as good as you say, come back tomorrow when I plan to perform the walk again. This time I’ll be pushing a wheel barrel and I’d like you to be in it.”

Now ask yourself, “How committed am I to the Seven Rochdale Principles?

I know I still have work to do!

Monday, February 8, 2010

The Time Is Right To Re-Discover Our Roots

When future generations of credit union folks look back to the Great Recession of 2009and the havoc it created for credit unions everywhere, what do you think will be their ultimate assessment?

Now lest we forget, credit unions are financial co-ops based on a business model predicated by seven cooperative principles. Membership is voluntary and without discrimination. Co-ops are democratically controlled—-one member, one vote—-formed to be an aggregator where the benefits of membership come in the form of lower fees and better rates, not soaring profits. Co-ops are autonomous, self-help organizations that educate their members, cooperate with other cooperatives, all the while focusing on member needs and demonstrating a concern for the community.

But what was the reality of U.S. financial cooperatives during the first decade of the new millennium?

OK, let’s not kid ourselves. Can we be honest? Although credit unions still demonstrated a strong presence with the underserved, I am of the opinion that the push was on to see where the best yield could be achieved on many credit union investment portfolios. One investor was shopped against the other to see which could deliver the higher yield. All along, we failed to realize the consequences induced by the competition this practise created, affectionately dismissing it as co-opetition.

All the while, credit unions focused their attention on the bankers who were constantly trying to undermine credit union business, pushing for limits on the range of products and services that we might offer, in addition to advancing calls for taxation.

Bankers, increasing regulations, decreasing margins, and now the need to compete for members with the credit union up the block all mounted a formidable pressure on everyone, prying our focus from where it rightfully belonged——on the cooperative values and principles that are at the heart of credit unions. Why should we care about a national branding strategy we asked ourselves when our first obligation is locally to our members and the success of our own credit union?

In retrospect, it’s ironic to think that the more our business flourished, the more our behavior became like the bankers we so firmly abhor. To me, it appears we as an industry drifted from our real intrinsic nature as defined by those seven cooperative principles.

So, I only can wonder if future generations will be of similar opinion. Today, somehow, some way, I believe we have to find our way back to those principles and values that truly distinguish us within America’s financial services marketplace. I believe our survival depends on it. Wouldn't you agree?