GALVESTON, Texas-Credit unions looking for their next growth strategy should look to the example set by the Vermont Cheese Council.
In this case, a group of cheese makers from Vermont decided they would be better off working together than separately. They formed the Vermont Cheese Council, which soon created a recognizable brand that garnered national shelf space and lifted the fortunes of all involved.
Their example was cited by Lisa Renner, co-founder and managing principal of the Renner Group, Overland Park, Kan., who told attendees of the Texas league's Annual Meeting here that collaboration by companies that otherwise compete with each other is becoming the new normal in today's business climate.
"The next growth strategy for credit unions is collaboration," Renner declared. "Collaboration creates new value and it changes operations. Many credit unions have wanted to offer student loans to their members, but it was not cost effective. Just like the Vermont Cheese Council, Credit Union Student Choice came together to help bring positive change."
Other advantages of collaboration: topline growth from access to new markets, improved asset efficiency, and lower operating expenses. Renner said all of these were demonstrated when Procter & Gamble was looking to expand its successful Swiffer cleaning product line into electrostatic dusters. P&G had been beaten to market by a Japanese company, but rather than spending four or more years reverse engineering the Japanese duster and working around its patents, P&G realized the small company had limited manufacturing and distribution capability. Procter & Gamble collaborated with the Japanese company, offering royalties on sales in 60 countries the smaller operation never would have been able to reach.
"Working with competitors is contrary to what people have been taught about business," Renner observed. "In school we were taught to color within the lines-but until we color outside the lines the picture never gets any bigger. Credit unions need to go where there are no boundaries."
A Five-Part Formula
In Renner's five-part formula for successful collaboration, the first step is to find like-mindedness. Second is identifying and overcoming hurdles. Third is developing an action roadmap, a timeline of all steps that need to be done and risks that need to be mitigated. Fourth is implementation, which she said involves the entire team of both CUs understanding why collaboration is important. Fifth: evaluate and realign, and account for any changes.
Renner offered a dramatic proposal: what if CUs collaborated on a single, nationwide branch network? She pointed out the current shared branching model puts the number of shared credit union branches at 6,500, roughly the same as bank leader Wells Fargo. If all CU branches were in together, she said, there would be more than 21,000.
"This is finally possible because CO-OP and FSCC have merged," she said.