Having just returned from NACUSO’s 2011 Annual Conference in Las Vegas, I thought it would be appropriate to share some perspective on current issues and trends that will impact your credit union and its ability to survive and thrive.

Gigi Hyland, Board Member, NCUA, spoke about the unprecedented challenge of addressing the worst economic recession since the Great Depression and how the NCUA has responded with a huge array of regulatory changes and proposals.  She discussed the importance of the NCUA obtaining increased vendor and enforcement authority as well as the increasing regulation coming to CUSOs (33.2% of financial institutions now participate in at least one CUSO, which is up from 27.8% at the end of 2008).

Both Gigi and George Hofheimer, Chief Research Officer, Filene Research Institute, spoke about credit unions needing to change their model to survive in light of diminishing interest, loan and fee income.  George went so far as to provide a visual curve that shows the credit union industry past the point of maturity and moving on the path of decline.   His focus was on how credit unions can “Re-launch” themselves by pressing forward and innovating, despite the coming increased regulation designed to eliminate silos of risk.

This brings me to my overarching question – How can credit unions learn as fast as the world is changing?

This past year IBM released it’s fourth edition of their biennial Global CEO Study series entitled,  “Capitalizing on Complexity.”  Over 1500 global CEOs were interviewed in person, throughout 60 countries and across 33 industries.   The insights gained from this study have major implications for how leaders should view strategic planning, valued leadership qualities and decision-making processes.

The results of this study identify the following insights:  The biggest challenge confronting CEOs is the rapid escalation of “complexity.”   80 percent of CEOs expect it to continue and accelerate in the coming years. Surprisingly, most CEOs seriously doubt their ability and their enterprise’s ability to cope with this effectively. They  identify “creativity” as the single most important leadership competency for enterprises to navigate through this complexity.

What does “creativity” mean to these CEOs?   It means encouraging experimentation and innovation through a mindset of questioning; pushing for deeper business model changes to realize strategies, inviting employees to challenge existing assumptions and having the courage to reconceive what it takes to be successful; taking more calculated risks; finding new ideas through collaboration and strong team leadership which includes coaching other leaders; continuing to innovate in how they lead and communicate, as well as embracing viral forms of communication; co-creating products and services with members; simplifying operations and products; increasing dexterity to change the way they work, access resources and enter markets; and designing operations for speed with flexible cost structures and partnering capabilities to allow them to rapidly scale up or down.

Let’s now combine this data with the “New Member”.  Saatchi & Saatchi surveyed major customers of leading brands around the world.  Results showed that the six top-of-mind questions for these members are:

  1. What can you offer me beyond price? I’m looking for value added that comes in other ways.
  2. What do you really know about me? Demonstrate that you have a penetrating understanding of what I’m looking for.
  3. What do I know about you? Have you created a mechanism by which I can learn more about your brand and develop a relationship with your brand?
  4. Why do choices that were previously so simple seem to occupy so much of my time? What was once an easy choice between a couple of options has now grown to be a choice between many options, with lots of information about each.
  5. What do we have to talk about?  It is no longer about what we have to tell the member, it’s about what they want to tell us.
  6. Can you keep up with me? The member believes he is in control, out in front, ahead of us and moving quickly.

Peter Hubbell, Executive Vice President at Saatchi & Saatchi, Global General Manager of the General Mills account, describes a time of unprecedented change.  Your potential member’s pace is faster, their demands louder, and they’re driving a major shift in the economy.

With the “New Member” in control, relationships need to be reinvented.  Getting connected to customers is the highest priority of CEOs in the Global IBM Study — to predict and provide customers with what they really want.   CEOs are concerned about addressing what customers now care about and reassessing how value is generated.  The information explosion has provided the greatest opportunity for developing deep member insights. However, CEOs feel that they are data rich, but insight poor – preventing them from capitalizing on emerging opportunities.   Dexterous leaders expect a significant amount of future revenue to come from new sources, which will require innovative thinking and fast responses.

Learning how to strengthen member bonds through communication and translating data into insights to improve members relationships is key. It will be up to the new leader to act, despite uncertainty and to eliminate communication barriers by proactively exchanging knowledge and insights with both internal and external members to build relationships and become even more effective in the marketplace.   Coincidently, integrity was a strong number two after creativity!

Stuart R. Levine is Chairman and CEO of Stuart Levine & Associates LLC, a strategy, leadership and governance consulting firm. For more information, please call 516-465-0800 or visit www.stuartlevine.com.