Look Up and Out

In Competitive Strategy, Michael Porter writes, “The essence of strategy is choosing what not to do.” To truly be strategic in your planning, you need to look up and out. This means that the focus of your strategic planning sessions should not be just on watching the bottom line but on growing the top line.

Strategic planning is an important process for your CU. In this article, we’ll examine how to ensure your strategic planning process stays strategic. We’ll explore the three essential areas—core purpose, vision and mission—about which boards and executives must agree to ensure you are meeting your members’ needs today, tomorrow and well into the future.

Core Purpose: Strategic Community

“Preserve the core. Stimulate progress,” writes Jim Collins in Built to Last. The concept is that great, enduring companies understand the difference between their core purpose, vision and mission—which are constants—and operating strategies—which must endlessly adapt and evolve.

Specifying your core purpose is an essential concept for the strategic direction of your CU. This is a short, one-sentence statement that defines the community you serve. An example might be “serving those who serve our country” if your CU serves the military, or “serving the residents of South Florida” if your CU serves a specific geographic area.

In documenting your core purpose, it’s important to understand what it is and what it is not. It is not “to grow” nor “to provide exceptional service to members” nor “to provide quality products at a great price.” Although these statements might be important, they don’t inspire an emotional connection and don’t provide a sense of belonging. Your core purpose is also not a list of all those you can serve, nor is it an explanation of your charter. It is a simple statement that defines the core community to which you and your members belong.

The key to a core purpose is for it to be broad enough to be inclusive, yet defined enough to be relevant to those who are part of the community. Your ultimate goal is to define the community you will serve and, just as importantly, be comfortable omitting the communities you will not pursue.

It should also define who you serve today and who you are committed to serving in the future. Your core purpose needs to be unique to your organization and answer the question for your members and your potential members of why they should choose you over another financial services provider.

Defining a core purpose may be difficult if a CU’s membership has changed through adding select employee groups or merging. You can approach this challenge by learning what the commonalities of your significant member groups are. What do they care about, where do they live, what do they do, what are they passionate about, or what gives them a sense of community? Remember, communities can be defined in many ways. This is about bringing people together and creating an emotional connection between your CU and its members.

Vision: Strategic Destination

A good vision allows you to control your destiny. It’s your road map to where you want to go and what you want to be to your members and your markets. Without a strong vision, it’s easy to get distracted by day-to-day challenges and putting out fires.

Your vision is what your business will be known for in the future. It is the strategic destination at which you will arrive if you lead by your core purpose and your mission. Your vision statement should be future-minded, forward-thinking and might be constructed like this: to be the financial services provider of choice for your community.

What do you want your CU to be recognized for? Your vision is your aspiration and is comprised of the stuff of dreams. As Simon Sinek, author of Start with the Why, explains in his TED talk, “Dr. Martin Luther King Jr. gave the ‘I have a dream’ speech. Not the ‘I have a plan speech.’” The dream—the vision—is your strategic direction. The plan is tactically how to get there. Have fun envisioning your CU’s future. Allow yourself to dream big. Then write a clear and focused statement.

Most companies will take years, even decades to reach their envisioned future, if they ever do. If you can see yourself arriving at your vision in just a few years, think bigger.

Mission: Strategic Rallying Cry

Mark Zuckerberg, Facebook co-founder and CEO, explains the importance of mission like this: “Building a mission and building a business go hand in hand.” Your mission is the ultimate expression of passion, purpose and drive for everything your CU does.

Your mission gives action and direction to your core purpose. When writing it, include your community and your core purpose. Ask yourself, what is your value proposition and what makes you unique and different? What do you want to do? What is your CU’s ultimate goal? Your mission might look something like this: to help members of your community live financially well by providing products and services to meet their unique needs.

Don’t underestimate the value of focusing  on purpose and mission. In 2013, Gallup found that mission-based businesses had increased employee and customer engagement and company performance.

Employee engagement also is essential. In 1962, when President Kennedy visited a space center, he reportedly asked a man carrying a broom what he did at the space center. The man responded, “I am helping to put a man on the moon.” That employee understood NASA’s mission and connected his contributions to helping achieve it.

Ask your executives before your next planning session to answer questions that make the connection between your mission and your strategy. For example: How does your job connect to the CU’s core purpose and mission? What recent initiative put the CU’s mission into action? What makes the CU different from competitors? The answers will be telling. Your goal should be for everyone on your team to answer as concisely and confidently as the NASA employee did long ago.

Planning: Strategic Gut Check

Warren Buffet is quoted as saying, “The difference between successful people and really successful people is that really successful people say no to almost everything.” The same is true for organizations.

Your core purpose, vision and mission should be the basis for how you move forward, including whether you merge, what SEGs you add, how you shape your service delivery and what new product lines you support. If any new idea doesn’t align, don’t do it. It’s that simple.

Each planning and executive discussion should reflect this basic question: “Does this strategy or tactic align with our core purpose, vision and mission?” Your employees and your board must understand and be committed to these statements. If your core purpose, vision and mission aren’t clear or your team doesn’t agree on what they are, you need to come to consensus. Otherwise, your strategic plan will be built on an unstable foundation.

Once defined, your core purpose, vision and mission do not change year-over-year. These are the guide to your business decisions for the long haul. Revisit them for 30 minutes during the strategic planning session each year to ensure that everyone remains on the same page and that all strategies and initiatives for that year come back to these foundational building blocks.

Take the time this year to clearly define or refine your core purpose, mission, vision and values. You will reap the benefits for your organization for years to come by having the board and executives aligned with your true strategic direction.

A long-time member of the credit union community, Bryn C. Conway, CUDE, principal of BC Consulting, LLC, helps credit unions define their brands, develop their leaders and grow their market share.