DES MOINES, Iowa-It's time for transformational-not incremental-change, and that will be the biggest issue facing credit unions during their strategic planning sessions, according to The Members Group.

EVP Jeff Russell contends that during 2009 credit unions weren't plotting a course as much as simply attempting to survive the storm brought on by the economy, the corporates' troubles, and regulatory changes. "Everyone was shell-shocked. So the planning in 2009 was highly reactive."

Even though such change has now become the norm, Russell warned that it could be easy to fall back on conducting yet another strategic planning session that addresses incremental change only. He said sessions should shift from discussions about topics such as whether unemployment will be 9.5% or 9% next year to what if unemployment remains high for the next five years and how will the CU will change for the long haul.

Credit unions that have longstanding boards could hinder transformational change, cautioned Russell. "The tough issue with experienced directors-and having an experienced board is good-is that these type of boards often want to improve the credit union through incremental change, such as tweaking programs and maybe creating a fee for checking. Strategically, from a board-level position, it must be about how do we re-examine the business model and how do we take a look at what the fundamental shifts are in the financial landscape."

Leveraging Scale

Transformational change, stated Russell, must occur because the rules by which credit unions are playing have changed. It also has to happen because scale has become critical to remaining in the game. "It takes more scale to compete in the new environment," Russell added. "That does not mean credit unions have to get bigger for the sake of getting bigger, they have to figure out how to do things even more efficiently."

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