The Agility Imperative: Tune Up for Future Success

The future belongs to the agile.

August 23, 2010

The unprecedented events of the past few years have made all of our jobs even more demanding, forcing us to become harder-working, harder-driving executives.

Yes, gross domestic product is on the rise and many financial markets are once again delivering strong returns. While this would normally bring a sigh of relief among credit union executives, the fact is, we still have quite a few issues to work through.

Many of our members are suffering from unemployment, underemployment, or worries about employment, and the nascent rise in values of the homes that collateralize many of the mortgages on our books seems to have stalled.

Here’s the thing. We’re never going back to the easy, good old days, even if the government successfully manages a graceful end to quantitative easing and other massive government intervention in the financial markets.

We operate in a hyper-competitive, highly regulated industry. Yes, credit unions are more positively portrayed than our bailed-out counterparts in other parts of financial services, but we are under no less pressure to continually improve our products and services in the face of multiple uncertainties.

Members demand more, technology is moving at lightning speed, and pressure to keep down costs is relentless.

I would argue that constantly being prepared to identify and adapt to change—agility in today’s parlance—is what will separate the wheat from the chaff in the months and years ahead.

And perhaps that’s as it should be—those with vision, a strong member focus, and the willingness to see things in new ways will be the leaders, and the operationally effective ones will be those who can bring their organizations along with them.

Next: Changing the game



Changing the game

For credit unions, agility is the ability to consistently recognize and capture business opportunities before our competitors do. It’s the power to constantly think and draw conclusions, and then quickly take action.

The question becomes, “To what degree is my credit union agile, and how do I build the necessary skills, talents, and drive into my organization’s culture?”

In “How to Thrive in Turbulent Markets,” published in the Harvard Business Review in February 2009, Donald Sull indicated that organizations can achieve agility in three ways:

1. Operationally, through focused business and quick action;
2. On the portfolio level, by shifting resources into more promising business lines, and;
3. Strategically, by seizing game-changing opportunities.

While these three issues are in many ways interrelated and depend on similar approaches, let’s focus on the operational aspects—dealing with five primary areas to evaluate whether you have the agility to effectively deliver products and services in the face of so many unknowns.

Within each area (organization, market, delivery systems, technology, and operational support) there are a number of questions you must consistently ask, assess, and answer if you are to lead a truly agile organization:

Organization (people, teams, division of labor, and structure):

  • How effective are managers and vice presidents in change management?
  • Do managers and vice presidents have the requisite skills of tomorrow to be effective leaders? Do I know the skills I need tomorrow?
  • Are vice presidents leaders or doers?
  • What skills do team members need to fulfill member needs in the future? Have we identified these skills and equipped the team to be successful?
  • What are the roles and responsibilities of each unique department/branch? Have we set expectations and clearly conveyed these expectations, and are they understood?
  • Have we organized teams in an efficient and effective way, both functionally and synergistically? How is the credit union structured for effective risk management?
  • Are all goals and targets in departments/branches aligned to the organizational goals & targets?
  • Are metrics in place to understand performance and early warning issues/flags?
  • Are we measuring the right things?
  • Do we reward the right results/behaviors? Do we have clear performance goals for teams and individuals?
  • Do we have focused and few organizational priorities?

Market (market intelligence, products and services portfolio, marketing effectiveness):

  • Do we understand the marketplace?
  • Do we know what members think and want?
  • Do we do surveys or research?
  • Do products and services exceed members’ needs?
  • Should some products be retired/decommissioned?
  • What is our value proposition to members?
  • How successful are we at getting the value message out to members?

Delivery systems (branch, phone, Internet, mobile):

  • How long does it take to implement new products and services?
  • How effective are we at knowledge management?
  • Can our teams easily and quickly learn/absorb/use new information regarding members, products, services, and changes to systems and operations?
  • Are our delivery systems intuitive to our teams and members?
  • Are we doing necessary work and eliminating unnecessary work?

Technology:

  • Is the structure of our technology built for performance, speed, and change?
  • Do we consistently know and understand the changes in technology and evaluate if an emerging technology is adaptable and beneficial to members?
  • Do we know what technological advances competitors are using?
  • Are we managing too many projects and priorities, or too few?
  • Do our technology plans align with business needs and plans?

Operational support (adaptability, automation, regulatory compliance):

  • How quickly can operations adapt to changing products, services, and regulatory changes?
  • How automated are we?
  • Are we allowing regulatory compliance to be an excuse for excessive operational burdens or lengthy implementation?
  • Are we effective in implementing regulatory changes in a way that is in the best interests of our members?

Next: Times change, leaders lead



Times change, leaders lead

Of course, this might feel like an exhaustive list of questions, but if you’re not making them part of a regular self-evaluation process, chances are you’re falling behind instead of leading the way forward.

The information (not just data) you incorporate into each of these key agility assessments must be reliable, timely, and current.

Next, focus on which among these many issues is most relevant and critical to your organization, and, after prioritizing them, build teams accordingly.

Too many priorities lead to a lack of focus—too few priorities leave you behind your competitors. As in all things, striking the right balance will manifest better services, products, and pricing for your members, and more success for your credit union.

Finally, instill a sense of urgency in others. You can’t do this all on your own, so look for qualities related to agility at all levels of your team.

Your team must consist only of professionals who want to be part of the best, most successful, and agile credit union in America.

Opportunities abound

Some wistfully yearn for a return to the “good old days.” But from my perspective, these are the golden days.

Trust in almost all institutions is down, giving credit unions some advantages we’ve never had before. With that comes a chance to speak the truth about what we stand for and how we’re different.

We’re being given a rare opportunity to effect change in the lives of many people who have been through serious financial trauma. For the agile, the visionary, and the strong, the best days lie ahead.

ERIN MENDEZ is executive vice president/chief operating officer for SchoolsFirst Federal Credit Union, Santa Ana, Calif., and vice chair of the CUNA Council Forum. Contact her at 714-466-8109.