Credit Unions DON’T Need a GenY Strategy!

Recent headlines across the industry are playing up the need for credit unions to have a specific strategy for reaching out to and/or attracting GenY. Some references go so far as to say that credit unions should have members of GenY serving on the board of directors so that policy discussions adequately support GenY interests. I think this concern and advice is somewhat misguided, and I will tell you why.

Let’s consider the basics of a strategic plan. A strategic plan begins with the end in mind. That is, what the organization is trying to accomplish. It is important that the end result of any organization’s strategy be tied to the value desired by key stakeholders. In the case of credit unions, key stakeholders includes both the membership and those making up the field of membership.*

Why the field of membership focus for strategy? When a credit union takes on a field of membership (when chartered or when expanding a charter), it does so on behalf of those making up the field of membership, essentially making a promise to them that, on the whole, they will be served by the credit union.

Field of membership is very important when defining organizational end results/vision. Too often credit unions base strategy solely on the needs of the membership, and do not include the field of membership when deliberating strategic options. When this happens, strategy often leads to myopic, self-serving decisions that fail to consider the broader needs of the credit union’s market. This then leads to low/no growth, declining market share, and competitive disadvantage. A vicious cycle.

With regard to GenY, if a credit union is having a hard time attracting younger members it probably doesn’t mean it needs a dedicated GenY strategy as much as it needs better overall strategy for fully tapping the field of membership. I believe that many credit unions that have a “GenY strategy” likely have one because at some point they were told (or read) that a GenY strategy is what is needed to combat an aging membership – not because they identified a strategic opportunity in the market. This is wrongheaded thinking. If a credit union has a GenY strategy, if there is such a thing, it should be because the credit union’s market contains a lot of GenY member opportunities in need of credit union service.*

This approach to planning, and market segments such as GenY, does mean a change for boards, but it does not necessarily mean swapping out current board members for GenY alternatives. A credit union board, as policy maker and elected representative of both the membership and field of membership, should be proactively aware of the needs present in both the membership and the field of membership. A credit union board must define its expectations regarding how much of the “needs opportunity” within the field of membership is available to be mined (or should be mined – some mines are too dangerous). A credit union board must review organizational progress/successes in meeting these needs.

If a board is not functioning as such a body, then changes to board composition may be necessary.

When making such changes, if a member of GenY capable of identifying the strategic opportunities to serve and grow that exist in the market is identified as a possible board candidate, then they should be nominated for a spot on the slate. Their inclusion, of course, should not be based on their GenY status but on this identified strength of personal capabilities.

Many existing boards do not have a direct enough connection to the broader fields of membership their credit unions are chartered to serve to really know what the market demands. In the absence of such knowledge is where we find the root cause of ineffective strategic plans; boards that try to turn operational decisions into strategic decisions, or boards that draft irrelevant and/or uninformed strategic mandates.

The answer to reaching GenY, really, is to start with a board connected to the field of membership (both members and potential members), a board capable of identifying market needs and defining long-term expectations with regard to the credit union meeting such needs. The answer to the growth challenge is not GenY for the sake of GenY – but market awareness for the sake of opportunity identification and strategic decision-making.

For those looking at GenY as a membership growth and age-reducing panacea, embracing a generation without regard for its composition in the field of membership is a misguided approach.

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* Key stakeholders also include regulators, volunteers, and staff, among others.

** If a credit union does have an aging membership AND field of membership, then a strategy to expand the charter to ensure credit union longevity is very much appropriate. This is not a GenY strategy as much as it is a market expansion strategy.

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