"Strategy is not the final answer–it is the result of asking quality questions," said Myers. "Thinking strategically means you have to ask and address thought-provoking questions and be flexible in your thinking."

She says it starts with asking the right questions and the why behind it all.

"Credit unions need to step back and answer why they are in business and it needs to be defined more than 'to serve our members' that is a given. Identifying the why and target market they choose to focus on can be very uncomfortable and difficult to do," said Myers. "It is also important to reconsider how to measure success to avoid measuring the wrong things. The past blanket definition of credit union success being measured by factors such as asset or member growth may not mean much without the why of it. Member growth can happen easily enough if you want, but additional questions should be asked, for example, what type of member are you attracting, how long will they stay with you, will this membership growth be profitable or take value away from existing members?"

She adds that once board and management agree to a clear vision how to achieve that vision will change over time and the current business model must constantly be re-evaluated and updated as necessary.

"To be competitive, in addition to addressing technology, compliance, talent and leadership issues, credit unions have to pick and choose what their focus will be," said Myers. "It is okay to be selective as to who to target or not. Once this is decided it helps bring focus to product mix, delivery channels and service. For example, it is important to keep in mind that the definition of service depends on who you are targeting. So you have to look at what service means not only today, but what it may mean five years from now and start thinking about how to adjust today for the long term because it will be here before you know it."

For example, with regard to aging members, Myers encourages credit unions to look at the deposits held by certain age groups to start thinking about the potential strategic risk.

"As these members pass away track what happens to those deposits. If it is walking out the door then the action necessary depends on the credit union's exposure. If the aging members hold heavy balances in your credit union then what is the pipeline to younger members to make up for those balances and how many younger members are needed to make up for the older generation? If you need seven to nine younger members for one older generation member then what operations need to be changed today to handle more members to get the same balances?"

Myers says focusing on analyzing the credit union's sources and sustainability of earnings provides an early warning of a possible sustained reduction in the performance of any core business lines. In addition it gives credit unions time to think strategically about new lines of business.

"You don't want to focus on the short term and not enough on the long term. People find it hard to discuss the long term because change happens so quickly. The key is to have a direction that is clear enough in the board and management's minds to use that as a decision filter because you can't do it all," said Myers. "It is also okay to try something new and not have it work as long as you realize that once it isn't working you stop it and move onto the next thing. Invest as much time deciding what your credit union will not do or stop doing so that the board, management and staff can be focused on achieving objectives that are imperative for their unique situation. The nature of the economy, shift in demographics and behavior means that different questions need to be asked in terms of analyzing risk."

She says it boils down to the board and management having difficult conversations about what can happen and looking at how global and local factors could impact each credit union's members. If the credit union strategy is headed in one direction yet the decisions made are in another the result is a strategic disconnect and the credit union may not be able to move forward.

"The world around you is changing. You don't control it but have to live in it and the factors that effect each credit union are unique," said Myers. "Spend more time during each board meeting focusing on strategic outlook and strategic thinking placing the credit union in different futures and determining how the credit union would respond. Ask questions such as what if our interchange income is threatened or what if our members view the Internet as their primary financial institution? The scenarios may never come true but if the series of questions is structured well it can lead to innovation–for even today. These discussions help people become more imaginative in finding solutions as to how to better serve members that ties into the overall vision and credit union desire for financial performance."
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