The signs and headlines are everywhere: Banking customers prefer mobile; branch visits are down; and new technologies such as voice bots will change member behavior even more dramatically. Many credit unions have come to realize that they need to engage with their members on new, innovative levels. People want speed, transparency and precision that can’t be delivered through traditional branches and phone banks.

Understandably, credit union executives are exploring new ways to become more innovative and allocating higher percentages of their overall budgets to innovation. Some credit unions have established innovation teams or departments. Others are partnering with business accelerators and startups.

These create a lot of attention in the trades and deliver positive PR. They also help to excite credit unions and their employees, feeding new energy into traditional companies. These innovation initiatives have advanced to the pilot stage but it’s rare that any of them are scaled up and released to the bigger public. That’s not a credit union problem. We see this with banks, automotive companies, food and beverage empires – it’s a problem for all traditional companies because they are not designed to be innovative.

What made credit unions successful in the past, makes them ill-suited to be disruptors.

The business culture of successful traditional companies, including credit unions, values consistency, reliability and predictability. These values are a terrible fit for a new marketplace that requires quick response, agility, and action plans that change monthly – if not weekly. This cultural disconnect is the biggest challenge for credit unions that hope to innovate and to embrace a continuous innovation approach the way companies like Amazon and Apple do. Are we saying credit unions are destined to fail the digital challenge? Absolutely not.

Credit unions and their partners build new products and services all the time. They do have well-established processes to do this that are well tested. To translate these processes to innovation propositions, the same approach has to be applied to innovation. It requires an executive sponsor, a collaboration with stakeholders, buy-in from members and a well-researched business case.

It’s imperative that an innovation team create a delivery process that allows it to run several experiments/pilots at the same with margins for failure and plans for successes to scale up quickly. It requires agile testing with members, quick decision-making from stakeholders and sponsors, and confidence in the innovation strategy. Margins for failure are important because slim allowances for failure indicate a risk-averse strategy. Costs should be kept at a minimum and project times should be cut to a minimum – which may be exactly the opposite of the current credit union innovation approach. Failure has to be affordable: Investing too many resources on one project makes failure an unacceptable option.

The digitized world is changing credit unions and banking forever. Effective innovation teams help credit unions to understand and accept the changing world. The more innovative ideas are being executed, fail and succeed, the faster your credit union will change.