Credit Union Magazine - January 2009 - (Page 16)

GAME PLAN Emerge with a stronger image and increased respect from members. The economic crisis and its impact on consumers, small businesses, big businesses, and the financial services industry is the news right now. It’s likely to continue to be the No. 1 news story until the nation sees material improvement. Yes, the media, lawmakers, regulators, and, hopefully, credit union members recognize credit unions aren’t part of the problem. But the impact of increased unemployment, business failures, depressed real estate values, and an investment market that’s completely irrational and resulting in illiquidity and losses has created—or will create— challenges for every credit union. And those located in California, Nevada, Arizona, and South Florida particularly are exposed due to declining real estate values, exceeding 30% in some areas, according to Standard & Poor’s/Case-Shiller Home Price Index. Self-help books on how to survive an economic crisis are big sellers right now. I don’t have a book, but here are some pointers: uDon’t make quick decisions that will have strategic consequences. Be sure cost-cutting actions and pricing changes don’t conflict with your mission or your stated commitments to members and staff. Focus on core values and core products. uLook really hard at nonrevenueproducing areas. Back-office operations, administrative functions, and human resources are important areas, but they also can be overstaffed, wedded to old processes, and focused on making their tasks as easy as possible at the expense of the revenue-producing areas. Management should review processes 16 CREDIT UNION MAGAZINE Take Control in Crisis John Franklin to be sure nonrevenue-producing functions don’t shift detail work to revenue-producing areas, diverting resources from making or saving money to shuffling paper. There are huge opportunities for credit unions to collaborate on these functions and reduce operating costs. uChange marketing messages to emphasize the credit union’s differences and values. Portray your credit union as part of members’ Create marketing messages portraying the CU as part of the solution to members’ financial challenges. solutions to cope with their financial challenges. Highlight headlines from articles in newspapers, magazines, and media reports advising consumers to seek and use credit unions to save money and get credit. In the face of this adversity, opportunity lies in gaining market share, new members, and consumer loans. The “flight to safety” from troubled banks offers a great opportunity to grow across the whole gamut of consumer financial services. uCut back on bonuses, pay increases, and new hiring. uHold meetings such as board planning meetings and retreats at reasonably priced locations. (Demonstrate that uJANUARY 2009 ucuna.org the credit union is “sharing the pain.”) uEliminate unnecessary travel. Don’t, however, eliminate needed training and education affecting compliance, member service, improved operations, or revenue generation unless there’s a real crisis as opposed to a problem with earnings. And, finally, the one tip that covers it all: Make all decisions as if you personally own the credit union. Pretend it’s your personal money on the table, and make each decision after analyzing the pros, cons, rewards, and consequences. In my 40-plus years of experience within the credit union system, I’ve been through a number of “hard times.” Ultimately, well-managed credit unions survive and emerge from crisis with a stronger image and often increased respect from members. Hang tough. Stay true to your mission. Think before you act. JOHN FRANKLIN is executive vice president and chief operating officer for the Credit Union National Association in Madison, Wis. Contact him at 608-2314266 or at jfranklin@cuna.com. http://www.cuna.org

Table of Contents Feed for the Digital Edition of Credit Union Magazine - January 2009

Credit Union Magazine - January 2009 Contents On My Way Leading Edge Spotlight President's Perspective Game Plan Washington Insider Wright Stuff Executive Suite Reverse Mortgages Come of Age Six Merger Myths Leading-Edge Lenders TwentyFour/Seven Bankruptcy Compliance Tools of the Trade Trendlines Rates & Ratios Council Corner Shoptalk System Scan Marketplace Branching Out Advertiser Index

Credit Union Magazine - January 2009

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