Reconn Radio – Podcast #4 (Week of 12/30/2013)

Happy New Year! We end another year and begin another. Life rolls on and work continues. We are delighted to bring you our final installment for 2013. We hope you enjoy it! Cheers!

Reconn Radio – Podcast #3 (Week of 12/23/2013)

Happy Holidays! This week we go deep. Influence and what it can be…and what it should not be. This is Reconn Radio.

2013Q3 – CU Data Visualization Extravaganza! Branches

The nature of FI branches is a hot topic right now. Many are discussing the demise of branches, the reemergence of the same, and the plethora of technology that should go into the modern branch. Oh, and the talent and process to support customers. That is why this post considers the status of credit union branches.

Histograms

A little on histograms will go a long way in reviewing the dashboard below. Histograms show the distribution of a population over a given metric. We’d like to thank SNL Financial for the data.

Number of Credit Union Maintained Branches (for institutions having less than 20 branches)

04 - Number of CU Maintained Branches (20 branches) - Histogram Dashboard

Build a branch? Move a branch? Maintain a branch? Kill a branch? These questions are floating around the industry these days. Some of our peers absolutely believe that branches should go away with the investment directed towards other channels. Check this blog post out by our friends over at Optirate. It raises some very interesting questions based on sound research.

The graphic above demonstrates that the overwhelming majority of credit unions have very few branches. This group, which is represented by credit unions having less than 20 branches, comprises the vast majority of credit unions. The questions are tough ones for this group. There likely needs to be some optimization work done once you get to the 10-branch threshold. Below that, there may be branches that just need to be shuttered. They’re not carrying their weight. No studying, no analysis. Shutter.

Will branches go to zero? I don’t think so. Not in my lifetime and perhaps not in my daughter’s. I think an environment with zero branches likely drives the entire industry towards a much smaller number of institutions. Technology is a commodity. In our way of thinking, more so than brick-and-mortar channels. The guidance: Be careful what you ask for because ultimately it all leads to a very limited group of players, an oligopoly of sorts.

Number of Credit Union Maintained Branches (for institutions having 20 or more branches)

05 - Top CUs - by Asset Size (# of branches greater than 20) - Histogram Dashboard

 

The group above – those credit unions with 20 or greater branches – is a small group. Some might say it is an elite group. The burden of optimization is the greatest at this level. Systems and talent are more complex, more dynamic at this stage. However, there must be the added burden of looking at acquisition along with optimization should the individual credit union’s culture and focus permit it.

There are 107 credit unions in this group. The size of the circle represents the number of branches as compared to the others. The color gradient represents asset size. This group, though larger, still lacks elements of scale if you look at the group without considering other dynamics (e.g., market size, membership diversity and size, merger history, etc.).

We hope these dashboards have raised some questions and perhaps answered some questions. If you need to dash, and don’t have your own board on which to make it to shore, then do give us a call. Custom reconnaissance, analysis, and direction are just a click away.

No. Really. Just click here.

We thank you for your patronage. Happy holidays!

Executing your strategy: 2014 communications plan – all hands

In this final installment of our communication series, we want to stress three components when communicating to the entire team, to all hands. Managers and supervisors are responsible. Objectives are tied to goals. Initiative first, incentive to follow. Frontline communication should follow on the heels of a general message to all employees from the CEO and/or senior management team. This video introduction explains it in just 33 seconds. Go.

Managers and supervisors are responsible

After the general message is released, it is up to managers and supervisors to deliver the message to the next layer in the organization. It is important that they understand the art and science of communication. As we discussed in our post last week, there should be special care given to training and mentoring this middle tier of your organization when it comes to the business plan. You can find that post here.

Tie objectives to goals

Goals and objectives are confusing. I always like to imagine the goal as the target and the objectives as the air between the target and the shooter. It’s just air, right? Well, not really. It’s the distance, the drag coefficient, and the humidity that we have to overcome to reach our target. This needs to be made clear to all hands in the organization. As we have discussed during this series, the project management office (PMO) elements that relate directly to a certain group of employees should be described if not shared. More on PMO philosophy and culture here. Additional information on PMO tools and talent here.

Initiative then incentive

Work precedes reward. Focus on the former and not the latter. We have said this time and time again. This recent Forbes article drives home the point of the lack of engagement. Money is certainly a part of it, but the work must be at the center – the heart – of our commitment to fulfilling mission and purpose.

This is the last article of nine in a series on executing your strategy. We welcome your feedback, so drop us a line or give us a call. Operators are waiting and we’ll even throw in a set of Ginsu knives. Well, not really. However, we are ready to listen.

2013Q3 – CU Data Visualization Extravaganza! Net Worth Growth

At Reconn Consulting, we like to preserve things for future generations. Our commitment to providing information to those we serve compels us to keep on writing, keep on informing. It’s what we do. We preserve. And we know, as a credit union, you are out to grow and preserve capital. That is why this post considers the growth in net worth.

Histograms

A little on histograms will go a long way in reviewing the dashboard below. Histograms show the distribution of a population over a given metric. We’d like to thank SNL Financial for the data. Enchanting people over at SNL.

03 - Net Worth Growth - Histogram Dashboard

Nearly 26% of credit unions included in the graphic above realized negative net worth growth. If this were an EPS-driven environment, there would be dramatic changes in the makeup of management teams and the industry. It is rare for a board or group of shareholders to wait for their stock to go to zero. Let’s hope it’s not the case in this industry.

For the holidays, we don’t want to be seen as scrooges and naysayers. So, the flip side of the story is that the other 74% saw growth in their net worth. That is good news.

We hope this dashboard has raised some questions and perhaps answered some. If you need to dash, and don’t have your own board on which to make it to shore, then do give us a call. Custom reconnaissance, analysis, and direction are just a click away. Right here in fact. Ask for the one and only Beth.

On Monday, we will provide you with our final dashboards for the year. Stay tuned.

2013Q3 – CU Data Visualization Extravaganza! Loan-to-share

At Reconn Consulting, we get a little excited about data. Our commitment to reconnaissance and data analysis helps us bring industry insight to our clients. It also helps us give them a sense of where they fit in against their peers. However, our data analysis really shines a light on what, when, and why our clients should do something about their current position in the industry.

This post considers the Loan-to-Share ratio.

Histograms

A little on histograms will go a long way in considering four out of the five dashboards discussed herein. Histograms show the distribution of a population over a given metric. The classic use of histograms, which many of us would prefer to forget, is the showcasing of test scores. We’d like to thank SNL Financial for the data. Awesome group.

 

02 - Loan-to-Share - Histogram Dashboard

Even with the recent positive press regarding loan growth for credit unions, loan-to-share ratios have not yet made the turn. The shift from investment-club culture to lending culture has been going on for some time now. Some may say for too long. We fall into that camp. It is time to seriously consider your talent and your systems to reimagine and recast your lending operation, front to back.

Furthermore, don’t be lulled into complacency by the potential of higher rates. Some may survive if a high-rate environment returns, which is not guaranteed, but what will happen next time around? It will likely be the same bedtime story only with different characters. This demand for performance must come from the top.

Want to talk histograms? Hyperbole? How about setting a strategy in place for loan growth? Please give us a call or drop us a line via our contact form. Now, go make some loans.

Executing your strategy: 2014 Project Management Office – Your PMO tools and talent

People use hammers to encourage nails into a solid material, such as wood. Not always easy. Not always successful. And it is not always without pain. Practicing good project management requires good tools. Executing great project management requires dedicated talent. Success is not always painless as you steer a project to completion. Thinking through tools and talent helps. So, let us explore in more detail.

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Tools

  • Methodology
    • The PMBOK is the classic methodology used in the project management universe.
    • I studied something slightly different, VPIC. Originally offered by the folks at Franklin Covey, this has since been modified into something that resembles the PMBOK.
      • Visualization – using information gleaned from key stakeholders, develop a vision for the project that includes qualitative and quantitative goals and objectives. Be sure there is a specific tie-in with the strategic plan.
      • Plan – create a work breakdown structure (WBS), identify hot spots, and automate all that is the plan.
      • Implement – get to work, holding everyone accountable.
      • Close – determine success and failure by conducting a post-mortem; identify changes to be implemented into the next round of projects.
  • Technology
    • Choose a tool that will enable better project management. The tools should provide for collaboration, document management, and reporting.
    • Provide the tool to the organization. In doing so, the tool should be easy-to-use and intuitive.

Talent

  • Dedication

In choosing your project manager, there are two items to consider in the context of dedication: your own and that of the person you’re putting in this role. Dedication to, if not downright enthusiasm for, the strategic plan as well as the project management office are paramount. To that degree, this individual or team must be brought into the strategic plan communication loop (see our posts regarding communication here and here).

  • Organization

The individual or team for this job must be organized. Now, they don’t need to be militaristic about their organization. However, they must a particular mindset for living a clutter-free life. This also extends to their minds.

  • Candor

This is likely the most important factor of all. Candor. We talked about it earlier (see our post on communications here). Action is the mainstay of the project manager and/or project management team. To get action out of others, sometimes there must be straightforward communication. Demands must be put forward. Demands must be met. If not, then things falter.

This is the last in our series on the project management office. If you’d like to see our earlier posts, then please proceed here for information on driving strategy to projects. For information on PMO philosophy and culture, click here. If we can help your firm execute a project or assist with setting up a PMO, then please reach out to Beth Bumgarner via our contact form.

2013Q3 – CU Data Visualization Extravaganza! ROAA

Okay. Perhaps extravaganza is more hype than this deserves. We believe that Reconn Consulting must bring sound data reconnaissance and analysis, topped off by direction, to the industry. This post will give you (1) a sense of where you fit in against peers, which is an okay reason in our book to continue reading and (2) a sense of what, why, and when you should do something about your current position, which is a reason to be in leadership in the industry.

This post considers ROAA.

Histograms

A little on histograms will go a long way in considering four out of the five dashboards discussed herein. Histograms show the distribution of a population over a given metric. The classic use of histograms, which many of us would prefer to forget, is the showcasing of test scores. Yeah, that’s what we thought.

In our reconnaissance and analysis, we’ve used data from SNL Financial to show the distribution of the number of institutions as well as the percentage of total that each “bin” of the distribution represents. This is akin to the concept of percentiles. Are you still with us? Good. Further, in most instances we have taken out the extremes to simplify the reporting. In each of the presentations, we shall provide the data visualization first so that you can interpret without our sublime yet subtle dissection. You knew that was coming, didn’t you?

ROAA (%)

01 - ROAA - Histogram Dashboard

Let’s talk about the good and then the bad. Overall, over 75.6% (100% – 24.4%) of credit unions are making money. The bad: the rest are not. Pick your poison – the economy, lack of scale, location, sponsor group woes, planning and execution trials, the dreaded assessment, and the list goes on. It’s time to face facts, however. With our nonprofit clients, there is a saying in the world of board development – give, get, or get out. It’s harsh. But, it’s spot on with what needs to be done in that particular space with existing and new board members. In the credit union space, we submit it is merge, grow (geometrically), or fold.

If we can help with how you look at your data, please contact us. And by all means, if you need help with what to do after you have looked at the data, then please give us a call today or drop us a line by clicking here. Ask for Beth. She likes to chat, certainly, but she loves to listen.

Reconn Radio – Podcast #2 (Week of 12/16/2013)

Welcome back, folks, to Reconn Radio. This week we discuss:

  • Focus. Urgency. Organization. Communication. From 2013 to 2014 and beyond.
  • Dashboarding. No, not snowboarding.
  • A tribute to Peter O’Toole.
  • Thinking about and creating around your purpose during the upcoming holidays.

Enjoy!

Executing your strategy: 2014 Strategic Plan Review – The Living Plan

There it sits. Shelf #2, row #5. Doesn’t it look nice? Isn’t the cover the tops? Isn’t it grand? And what about the weight?

We’ve all written them or seen them. The strategic business plan. Dead on arrival? I hope not.

In the first two installments on this particular topic – the close out meeting, which can be found here, and the welcome back meeting, which can be found here - I discussed closing out the planning continuum as you head into 2014. Executing in 2014 requires that the plan be a living plan.

Here are four guidelines for keeping the plan alive:

  1. Hold the two meetings discussed. It’s simple and doesn’t take an inordinate amount of time.
  2. Transfer critical projects and tasks to a project management office. And then follow through with it. Put some one in charge.
  3. Refer back to the plan in at least every other management meeting and/or staff meeting (assuming you are having weekly staff meetings).
  4. If you are really daring, have your supervisory committee or a third-party consultant review the plan to date and report back to the board monthly, or worst case, quarterly.

It is my belief that planning is just the beginning. Quality should prevail over quantity. However, the arc of quality should not forestall the advancement of the plan. Where will you be in 2016? 2020? It is imperative that there be an urgency to your business planning. Whether your are on top or whether you are climbing back from the edge, there must be an urgency. This will give your plan life.