Add Inspiration to Your ‘Tough Times Playbook’

Many are concerned that the next few years could be financially tough for credit unions, even if we avoid recession. Tight liquidity, escalating cost of funds, inflation-driven operating expense increases and accelerating loan losses are just a few of the strategic challenges the industry faces.

Raise your hand if you’re tired of disruptive industry events. OK, noted. Now, what to do about it? You’ve survived shocks before, probably some pretty big ones. Take a moment to remind yourself of the takeaways from those times and how they can be used to adapt to the current environment. That knowledge can serve as a deep source of optimism, inspiration and energy, especially through tough times. Read on for more ideas to add to your “tough times playbook.” 

Should We Adjust Our Strategic Plan?

Depending on your situation, plans may need to be adjusted, which can be incredibly disappointing. The important thing is to keep strategy as the guiding light as adjustments are made. Whatever your strategy is—perhaps it’s becoming a leading choice for payments, offering top-notch multi-channel experiences with personal guidance when needed or building a business banking experience that rivals local competitors—continue to work toward it.

Envision the Cost of Delay

How adjustments to the plan are chosen is also critically important. Consider these three decision drivers:

1. Strategic and competitive impact in the longer term
2. Financial position--capital and earnings
3. Financial impact in the short term

It’s easy to see how going full speed ahead on strategic initiatives and spending in a tough financial environment could result in an unfavorable financial position. It’s harder to see the costs of delay. Picture your competitive environment in three years. Many others will have continued to push their strategies forward. How do you feel about where you’ll be in comparison to the competition if you pull back or push forward? A dramatic pullback on operating expense and strategic initiatives to wait out the storm saves money in the short run but could cost more in the long run if it causes you to fall behind. But it could be the right decision depending on your capital, interest rate risk (don’t forget rates can go down), and profitability. 

As you work to find the balance, consider whether the measures of success should be revisited. For example, if continuing with strategic initiatives will result in a return on assets under goal because the environment has changed, would the board prefer to accept less-than-stellar financials with great competitive positioning for the future or hit the goal and delay competitive progress? The answer will depend on many factors, including the capital level.

Strategic Flexibility Is Not the Same as Defeat

Strategic flexibility does not necessarily represent a drastic change in strategy—it means that you need to recalculate the route to get to the same destination. Assuming that changes to the plan are necessary, how they’re handled is more important than ever. 

We keep hearing that the past few years have left people stressed with more fragile mental health. Presenting the changes as a failing does not promote engagement nor help with stress and mental health, but working together to overcome obstacles does. The fact that the plan needed to change and the reasons behind it need to be acknowledged. Stakeholders should understand the brutal facts, then shift the focus to what the organization can do and how it’s making strides toward the strategy while adapting. Presenting the adjustments as the new battle challenge, rather than a retreat from the battle, helps energize and engage talent. 

Find the Opportunities

Tough times can present unique opportunities, too. Think about how you can help members with advice, information, products and services that they need and value during this time. Brainstorm other opportunities for the organization. Here are a few ideas to get started:

• Gain talent while others are cutting back (they can help the organization become stronger faster)
• Market when others are cutting back
• Implement automation, process improvements, and other projects in areas with excess capacity (e.g., due to slower mortgage and consumer lending) while those employees aren’t as busy
• Take time to think strategically, plan, and brainstorm—even if you can’t execute at this moment
• Proactively look for unique ways for your members to save money and tell them how
• Think of creative and intentional ways to add fun to the workplace to help offset some of the stressors in employees’ lives

Throughout it all, report on successes. Don’t ignore the reality of the situation but celebrate the good things that are happening. That’s always good practice and is especially important in tough times.

Inspiring your team through difficult situations can be a challenge but continue to use strategy as a guiding light. While it’s important to be realistic and adjust as necessary, find new opportunities and emphasize what can be done rather than what can’t. Many employees will relish the problem-solving mode and feel that they’re part of the solution can provide a big boost to engagement. Even if you can’t do everything that you wanted to, highlight the successes of the new plan as you continue to work toward the vision of your future.

c. myers helps financial institution decision-makers uncover opportunities and continuously optimize their business models. Their depth and range of experience in linking strategy, talent, desired financial performance and successful execution enables them to work with their clients as strategic collaborators. They have the experience of working with over 600 financial institutions, including 200+ of those over $1 billion in assets. C. myers helps financial institutions think to differentiate and drive better decisions through strategic planning & business model optimization, strategic solutions and implementation, strategic leadership development, real-time ALM and financial forecasting, education, and thought leadership.