Companies that successfully reinvent themselves have one trait in common: they tend to broaden their focus – tracking the basis of competition, renewing their capabilities and nurturing a ready supply of talent. In essence, they turn conventional wisdom on its head and learn to become experts in fixing what doesn’t yet appear to be broken. It’s daunting. It’s counter-intuitive. It’s doable!
Here’s how to start:
Closely Monitor the Market
How are other credit unions changing – or changing with – the industry? And let’s not just look at credit unions. We have the ability and opportunity to gain greater market share from other financial institutions. Competition in the financial industry comes now from all directions. In addition, explore how consumer needs are changing, building the next basis of competition. For instance, ask yourself if or how the Starbucks payment app will change your business?
Continually scan the periphery of the market for emerging threats and opportunities. Who manages this for you at your credit union? Is it part of your culture?
Create Distinctive Capabilities
Dell introduced the direct PC sales model, Wal-Mart is a master in supply chain capabilities and Zappos.com delivers on their unparalleled service promise. When you deliver over-the-top service, people will talk about it. When you offer unique products, people will talk about. Still, distinctiveness in capabilities is fleeting: mobile banking was progressive last year; now it’s a necessity. So, credit union leaders must invest in developing new capabilities for their institutions. Your best opportunity might be to deliver on best-in-class service for the touch points that are important to your most profitable members. This will transform members into advocates. In order to truly be considered best-in-class, expand the scope of who you compare your service experiences with. Chances are your members are already doing so.
Develop and Retain Talent
Exceptional employees – people with the will and talent to drive new business growth – are extremely rare and can never be taken for granted. Often companies feel the need to be leaner because they’re under pressure to boost margins. They reduce both head count and investments in talent, which simply drives away the very people they could rely on to help them reinvent the business. Have a steady commitment to cultivate talent creation.
Strategies for Company Reinvention
In their recently-published book, “Rethink, Reinvent, Reposition: Strategies to Renew Your Business and Boost Your Bottom Line”, Lee Hopf and William Welter provide a range of reinvention strategies based on customer relationships (existing vs. new) and hard and soft company assets (existing vs. new).
By examining different combinations of customer needs and company assets, some of the strategies found in the book can be described briefly as follows:
New Concept Group of Strategies: Existing Customers/Existing Assets
- Catch the New Wave: Shift your current business into areas that are hot.
- Put Old Wine in New Bottles: Repackage/rebrand your offerings to make them seem fresh and original.
Business Extension Strategies: New Customers/Existing Assets
- Aim Higher or Lower: Move significantly up-market or down-market to serve customers you previously did not reach. Increase their overall engagement.
- Get a Personality Transplant: Focus on new and emerging end-user needs. You can’t communicate with different generations with the same message and brand extension. Different age groups require different communication channels and choices.
Solutions Group of Strategies: Existing Customers/New Assets
- Build Share of Wallet: Meet more of your members’ needs and desires. Are your credit union cards the ones your members use most? Do they really use your credit union services every day? How can you change their usage?
- Shift to the Sweet Spot: Develop new offerings for the best part of the value chain. What value can you offer to members that delivers the highest profit margins?
In today’s changing society, you need to shift a significant amount of focus and resources away from short-term measures of success, such as quarterly returns, to investment in initiatives that will put the credit union on a longer-term growth path. What’s your vision for the perfect financial resource for consumers? Are you set up to deliver?