MADISON, Wis.-Planning for 2013 means more than just "We plan to grow loans by X%," says one person.
Barb Kachelski, SVP/COO at the Credit Union Executives Society (CUES), told Credit Union Journal that while in recent years CUs have focused internally on things like expense ratios and meeting the demands of regulators, now is the time to turn the focus outward. "I would recommend that they consider scenario planning so they're taking a thorough look at what the future could bring, and positioning the credit union to survive and thrive, regardless of what the future is."
Kachelski explained that scenario planning forces CUs to examine market conditions, succession issues and the impact of unknown outside forces to better prepare for what might happen. She offered the example of Enron FCU (today known as StarTrust FCU), which had included a scenario in its planning for what to do on the off chance that Enron wasn't around anymore.
"It makes the leaders of the organization stretch themselves and their vision of what they can be, and it takes a little bit more time," said Kachelski. "It's easier said than done-it's comfortable to say 'We want to add this many members or unveil this new product.' That's a way that doesn't really force you outside of our comfort zone. But in a situation where you're looking at 'What if our primary sponsor is gone?' or 'What if there are only X number of credit unions left? What would that mean to us?' it makes you question all of your assumptions."
Helpful Materials Available
Kachelski pointed out that there's no real wrong way for CUs to do scenario planning-but CUES has materials available to its members to help them get started-but she did note that it takes time to get the hang of it. "What I find is if credit unions continue to do it, they usually do it at a deeper level as they get their staff and their board used to it. ...When I look at the credit unions that are doing things that make you sit up and say wow-like purchasing a bank or doing something that's a bit more unusual-when I look at their leadership team, lots of times they've been trained in scenario planning."
The executive summary to the CUES report "2015 Scenarios for Credit Unions in North America" is available for free.