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Strategic planning has served as the inspiration for a wealth of insightful quotes, often traced to distinguished statesmen and captains of industry. But the inimitable Yogi Berra probably said it best: “If you don’t know where you’re going, you’ll wind up somewhere else.”
Three credit union executives share their formulas for effective strategic planning in concert with their boards of directors. Their methods might differ, but they share a similar goal, as consultant Clark Crouch so aptly put it: “Do the right thing for the right reason in the right way at the right time with the right resources.”
The foundation of a productive strategic planning meeting is simple: “There’s no ‘I’ in strategy; it’s a team effort,” says Jim Updike, CEO of Honda Federal Credit Union in Torrance, Calif., which has nearly 60,000 members and $635 million in assets. “It’s not the board’s strategic plan. It’s not the management team’s strategic plan. It’s our strategic plan.”
The CEO plays a vital role in the process, Updike says, by structuring the agenda and providing information the team can use to make educated choices about the direction of the credit union. But Updike also uses a facilitator—John Gregoire of The ProCon Group—to guide the team to consensus and avoid the perception that the CEO might control any outcome.
Honda Federal has a multistate field of membership (FOM), so its directors come from multiple states as well. As such, monthly financial updates and other board meetings oft en are held via videoconference.
Updike’s senior management team usually meets for a two-day session each fall to develop the credit union’s operational goals. The full board and key management staff then convene each February or March to discuss the credit union’s overall vision and strategy.
Typically, some Honda Federal directors can’t attend the annual planning meeting because of commitments in their credit union branches across the country. But this year, the lead item on the agenda was so important, Updike wanted his entire board physically present at the two-day planning meeting in California.
The task: Develop a succession plan whereby Honda Federal would ultimately appoint Updike’s successor.
Updike thought about stepping down this May but decided to give his board time to develop the credit union’s long-term vision, which will define the future CEO’s ideal qualities and qualifications.
Concentrating on a goal for multiple years is the norm at Honda Federal. The past two strategic planning sessions focused on the credit union’s branding efforts and how to become its members’ trusted adviser. The planning team read the book “The Trusted Advisor” by David H. Meister to focus those discussions.
“It’s tempting to sit down at a strategic planning meeting and say, ‘What’s our next great strategy?’ ” Updike says. “But you need to maintain a consistent purpose. You can’t be jumping around from pillar to pillar, because all the stakeholders will get confused about who you are and what you’re all about.”
Updike took over as CEO in 1986 when Honda Federal had only $16 million in assets and 7,000 members. Since then, he has maintained a strong relationship with the credit union’s sole sponsor—the American Honda Motor Company.
The credit union’s FOM includes employees of the auto manufacturer and its affiliated companies, but not Honda dealerships. The credit union hasn’t seen a need to seek a community charter or add other select employee groups (SEG) due to Honda’s consistently strong performance.
Updike periodically invites Honda senior executives to the credit union’s annual strategic planning meeting. Updike feels so strongly about the bond between the credit union and Honda that in 2009 he and his executive team voluntarily took an 18% pay cut because that’s what Honda required of its senior management team.
With a fiscal year that concludes in June, Honda Federal reduces its strategic planning expenses. Facilitators oft en charge less to conduct planning sessions held in February or March when they’re not as busy. Honda Federal also saves money by holding its planning sessions in Orange County near the credit union.
“As much as I’d love to take the board out and treat them to something extravagant, directors are pretty adamant that anything we do passes the ‘stand-up-in-front-of- the-members-at-the-annual-meeting’ test,” Updike says.
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