Operations

Eliminate Three Barriers To Cooperation

Cooperation and collaboration will be the competitive advantages that sustain this industry.

April 01, 2006
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By Lisa Renner

Our credit union forefathers were truly visionary in developing the cooperative model.

Cooperation and collaboration will be the competitive advantages that sustain this industry, and these are being revived by the National Association of Credit Union Service Organizations (NACUSO).

NACUSO is providing a host of resources for CUSOs to re-engineer the collaborative business model. Many credit unions and CUSOs are finding success by joining together, but collaboration isn't always easy and is not being embraced quickly by the industry.

Learn how to overcome these common barriers to cooperation:

• Fear of acquisition. Acquisition and merger strategies have been abundant in ourindustry for the past 10 years. The number of credit unions is shrinking at an alarming ratebecause many smaller institutions can't compete.

Small and mid-sized credit unions fear thatworking with bigger credit unions will position them as 'merger bait.'In addition, egos get in the way. Why is it that every time we meet someone in the industry,the first question is, 'What's your asset size?' And why does this set the tone for theremainder of the conversation and the relationship?

Solution:  We exist to serve our members, and their needs should come first. Without members,none of us--large or small--will survive. Let's put aside egos and make decisions in members'best interests. Our members need us to work collaboratively to develop creative solutions tosustain credit unions as a viable financial alternative.

• Loss of defined barriers to competition. Charter expansions have created overlapping fields of membership, increasing competition among credit unions and hinderingcollaboration.

Solution: By analyzing share of wallet and market penetration, you can quickly see creditunions aren't the problem--credit unions fall short compared to banks every time.

Refocusing credit unions on capturing market share and share of wallet from the banks would keep themmuch busier than worrying about the limited market share other credit unions hold.

• Cooperation requires additional effort. It's a lot harder to work together than dosomething by yourself. I have a great business partner, but both of us have admitted that wecould have built our company faster and with fewer headaches if we'd done it alone. Yetneither of us would choose differently today because we realize the value of our partnership.

Solution: NACUSO is providing the platform for those of us with successful multi-owned CUSOsto tell our stories--both good and bad--to help others understand the value and opportunitiesmulti-owned CUSOs can bring.

Perhaps others won't make the same mistakes we did. Perhaps itwill launch more joint ventures in which we can participate.

Lisa Renner is CEO of Beyond Marketing LLC and CU Holding Co. LLC, Lenexa, Kan., credit union service organizations owned by Mazuma Credit Union, Kansas City, Mo. Kansas City, Mo. She's also a NACUSO board member, and the organization's chief marketing officer.

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