Shortfalls in strategy development and execution

Many credit unions struggle to develop and execute a transformation strategy. Common shortfalls in this area include a lack of strategic clarity and support to execute the transformation. Additionally, organizational culture and mindset play a vital role in supporting transformation — and falling short in this area may prevent your credit union from achieving its goals.

It is crucial to take the right steps to mitigate each of these shortfalls during the development and execution of your transformation strategy. This will help your credit union achieve and sustain a successful transformation — enabling it to thrive as the financial services landscape continues to evolve.

Strategic clarity

Transformations often involve large, cross-functional areas of an organization. This makes framing the strategic vision of your credit union’s transformation at the appropriate level one of the most challenging tasks during the transformation process.

Brian Harris, CEO of Beem Credit Union, shares how involving the board of directors and staff during the transformation process helped to frame the strategic vision and purpose of Beem:

It is important to remember that the transformation not only needs to align with your credit union’s broader direction. It also needs to be sufficiently specific, actionable by the individuals involved in the process, and sustainable over time.

The gap widens between your leadership and delivery teams if your credit union does not begin the transformation process with strategic clarity. If this shortfall is not mitigated, it may cause transformation initiatives to differ from original specifications, diluting the intended outcomes and benefits.

Transformation execution

Transformation programs are often complex, multi-disciplinary, and involve a significant investment of resources beyond your credit union’s regular business operations. Ideally, credit unions will establish a central transformation management office to support these initiatives, which is a temporary structure established for the duration of the transformation.

A central transformation management office is necessary to carry out complex programs with purpose, coordination, and the support of dedicated resources.

However, many credit unions fail to establish a dedicated central transformation management office due to the demands of daily operational activities. This shortfall in transformation execution frequently causes resources that already have full-time tasks and departments with varying priorities to carry out large-scale transformations. This causes a general lack of focus — creating significant risks to the delivery quality, run-time, and costs of the transformation program.

Organizational culture and mindset

Fostering positive, transparent, and entrepreneurial mindsets in your credit union is crucial for a successful transformation. These mindsets will help support the ongoing reiterations of change management, communications, and employee engagement activities often required throughout the process.

“First West transitioned to an enterprise agile team structure in 2018, which has changed how we achieve organizational goals. The agile approach enables us to prioritize more effectively and execute our strategy with increased focus, through self-managed work teams who are empowered to make decisions that create value for our members,” says Shelley Besse, Chief Credit Officer at First West Credit Union, about the important role that cross-functional collaboration plays in a successful transformation.

“We’ve also brought our corporate purpose and values to the forefront in an even more compelling way, through a process of engagement with our teams. Now more than ever, our purpose is what propels us — especially as we develop strategies to help our members and communities flourish in the midst of challenging times.”

However, large-scale transformations often cause unfounded fear and resistance to change. It is vital to provide clarity of mindset, suitable working environments, and foster associated culture and behaviours during the transformation process. Shortfalls in this area can cause negative feelings and emotions to spread quickly through your credit union that are counterproductive for a successful transformation.

How to mitigate shortfalls in transformation strategy and execution

It is necessary to mitigate shortfalls during the development and execution of your transformation strategy to achieve successful outcomes. The first step is to provide clarity throughout all steps of the process. This includes strategy setting, implementation and execution, and long-term sustainment.

Additionally, the execution of your most important / complex transformation initiatives must be carried out with intent, requiring all key members of your team to act in concert throughout the process. Therefore, it is critical to clearly relay the intended benefits, changes, and delivery expectations throughout each layer of your credit union. This will help provide the strategic clarity necessary to achieve the planned outcomes of your transformation.

Sandra Meinig, Chief Risk Officer at Innovation Federal Credit Union, says:

The following steps can help you further mitigate shortfalls during the development and execution of your credit union’s transformation strategy:

Articulate your transformation strategy

Clearly communicate your transformation strategy to all your credit union’s stakeholders. This includes its executive and senior leadership teams, divisional and functional leads, front-line business owners, and subject matter persons.

Set up a transformation management office

A transformation management office (TMO) will help ensure appropriate governance for your credit union’s transformation. It helps govern activities from integrated project planning to the regular reporting of project delivery achievements and challenges.

Frame the benefits of transformation

Define the benefits of your credit union’s transformation for each layer of your organization — from strategic to operational. These benefits should be backed by realizable metrics for ongoing tracking purposes both during and after the transformation.

Conduct a cultural assessment

A cultural assessment can help you understand existing sentiments, ways of work, and overall engagement within your credit union. This helps identify potential concerns, gaps, and areas that may be resistant to transformation. It can also help your credit union build and/or facilitate desirable values and behaviours to support its transformation objectives.