With increasing regulation, economic pitfalls, commoditizationof financial services, and foreseeable competition from the likesof Google, Amazon, Apple, and cell phone service providers, CUSOsthat continue to offer products and services in a traditionalbusiness model could become a liability to their credit unionclients.

The symptoms of this potential liability include fatigue, lossof innovation and appetite for risk, blurred vision, and motionsickness. The underlying cause is the institutional status quomindset that keeps us from moving forward faster, thinking morelong term, taking calculated risks, and managing our business withmeasured purpose and intent.

Thank you - Drive thru

In the late 1990s, the NCUA’s Part 712 began the conversationthat now allows federally chartered natural person credit unions tolook at their core competencies and create opportunity fornoninterest income through the development of CUSOs.

I’ve only been a CUSO CEO for a short period of time but myfresh set of eyes tells me service has been our industry mantra.Service as we have known it is dying. Why? Anyone can say it, claimit and sell it. But what is service? These days, it’s the speed atwhich I can get a burger and fries from the menu. I think theanswer should be centered in the ability of the credit union clientto determine what they want; even better, what they actually need.As an industry of CUSO service providers, maybe we need tore-develop our abilities and change our service culture to help theclients get out of the drive-thru mindset and into a moreMatch.com, personalized, solution-driven operation.

Skate to where the puck will be

CUSOs must get more serious about their long-range outlook fortheir credit union owners. Like Wayne Gretzky’s response to thequestion how he was able to score so often, he replied, “I don’tskate to where the puck is, but where it is going to be.”

Where will our puck be in five years? What should we havestarted yesterday in order to be relevant five years from now?Let’s get existential and reevaluate our reason for being? How about beginning an industry and organizational Vision Questsays Matthew Modine – sorry those of you who weren’t around in the1980s to get that – and discover where we really stand and where weactually need to be. Let’s do this now.

In it for the right reasons

CUSOs should be in the credit union space for the right reasons.We should be aligned with credit union principles and philosophies.But CUSOs can’t stop there. We must also provide a compellingmarket differentiation and value proposition for our credit unionowners and their memberships. More often than not, thesedifferentiations are product-based and have already been vettedelsewhere. These differentiations can be easily copied in themarketplace and are short range tactics rather than long rangestrategies.

Examine the recent election. The losing candidate appeared tohave focused his value proposition based upon yesterday’sconstituencies. In 1980, non-Hispanic white persons made up 91% ofthe electorate. In 2012, this demographic had fallen to only 72%.The country will continue to change, not just in demographicdiversity, but also in values, expectations, and needs. If CUSOscannot foresee change, we will be destined to make mistakes thatwill hinder our growth and the success of our industry.

I am not suggesting that a CUSO operation attempt to be allthings to all people, but we must strategically evaluate our futureand execute accordingly. Is it better to be an organization thatdelivers a list of products and services that are a mile wide butonly an inch deep? Or, should it be exactly the opposite where yourCUSO delivers products and services – an inch wide but a miledeep?

The first suggests a significant breadth of opportunity, butlacking in relationship and retention. The latter suggests minimalbreadth, but significantly deeper relationships and retention. Cana CUSO make a go of it either way? Sure, but which do you believehas long term potential? Which can laser-focus resources and ideasto remain relevant and manage with efficiency?

Imagination

Where is my CUSO going? This question should be entertainedseveral times a week. Also, it’s that time of year when CUSOs andtheir credit union stakeholders are putting together 2013 plans andsetting organizational goals. I’ve seen many organizations begin byidentifying expense line items from every department. Next, theyset the needed goals to absorb those expenses. What’s left goes toretained earnings. I believe this is backwards.

For starters, your 2013 plan should align with your five-yearbusiness plan and long term strategic initiatives. If it doesn’t,begin the process and make 2013 year one of your five-year plan.Next, evaluate your mission, vision, value propositions; theseitems define why you do what you do. Ultimately, your brand evolvesout of these. Understand that your organization’s brand is not justmarketing, it’s operations, the people you employ, the cleanparking lot and your tone of voice over the phone. Set in motion aplan to develop next-generation services, financial products,personal financial management tools, calculators, online chattools, consumer education, financial life planning and others thatfit within your CUSO brand lens view.

Think big. We have the time to move forward, but that window oftime is shrinking, so we need to start today. Heraclitus (535 BC –475 BC) was quoted as saying, “Nothing endures but change.” If weprepare for it today we will better ourselves, our credit unionsand clients, and the members they serve. 

Larry Hayes is president/CEO of Beyond Marketing LLC.
Contact 281-705-4841 [email protected]