KETTERING, Ohio—One of the biggest mistakes small credit unions make is trying to be just like their larger brethren, when they should instead be “purposeful.”
Bill Burke, CEO of Day Air CU here, will make that point during his presentation at the CUTomorrow Conference in Austin, Texas, in September. He will stress that while it is OK to model some of the successful aspects of larger CUs in the market, the only way to really succeed is to focus on differentiation.
“If you try or be the same as your competitors, who probably have more resources than you, you will fight a losing battle,” Burke said.
Burke, whose $386-million CU has earned an average of more than $4 million in net income annually in the last five years, will cover many aspects of what it takes for small to medium-sized credit unions to compete and grow in a session titled “Preparing Your Credit Union for Success – Now and in the Future.”
Burke said his remarks will focus on how one high-performing medium-sized credit union achieves success year in and year out. He plans to speak to a wide range of topics, including governance, culture, strategy versus tactics, relevancy, differentiation, cooperative principles, being mission-driven, and being purposeful about a core value proposition.
“Linkage between high level, esoteric concepts and tangible execution will be discussed. You’ll leave with effective ideas, strategies and tactics to improve profitability, enhance organization culture and maximize credit union performance,” Burke said.
Conference In September
The CUTomorrow Conference (cutomorrow.info) is scheduled for Sept. 9-11 at the Omni Hotel in downtown Austin. The meeting was put together for credit unions that are not seeking to merge, but instead want to be a part of an old-fashioned credit unions-helping-credit unions collaboration. Sessions are focused on practical, pragmatic real-life examples of successful programs from peer-group leading CUs.
Addressing why it’s critical for small and medium sized CUs to differentiate, Burke described how Day Air approaches the issue.
Bill Burke
“We are approaching $400 million in assets, and in our market is Wright-Patt CU, the biggest credit union in the state, 10 times our size,” said Burke. “I see what they do and I like a lot of it, and I try in part to emulate their success. But Day Air is successful, too. So whenever I can I try to do things a little differently than Wright-Patt.”
Day Air’s efforts to be unique are not driven by Wright-Patt CU’s presence, noted Burke. Instead, his attentions are focused on the banks, which have about 92% share of the local market.
“Targeting credit unions just does not make sense,” he said. “I’d rather go after the banks and their big market share. So we try to differentiate against the banks as much as possible.”
Burke emphasized that during his presentation attendees will hear a great deal about being “purposeful.”
“I will talk about being purposeful in your value proposition,” he said. “So many credit unions are not purposeful—like they are trying to tackle and cut down each tree as they come to it as opposed to seeing the forest. We will discuss things like governance, the primary value proposition, strategies versus tactics, are we doing things right, are you being relevant in the lives of your members, and more. The session will be highly interactive.”
Burke said that he expects attendees will take away several “nuggets” and go back to their credit unions with something tangible to think about and then execute on. He noted that while some meetings address a great deal of high-level theory on what a credit union needs to do to succeed, his session is about getting down to business–which is precisely what the CUTomorrow Conference is all about.
“I know I talk to a lot of credit union people who shake their heads and say, ‘I hope things get back to the way they were. I hope we can start making a lot of loans again.’ I always tell them hope is not a strategy and that you have to figure out what makes you different,” Burke said. “We will talk about the things you need to do actually do to execute and start making a difference.”
'Well-Reasoned' Chances
Burke stressed that too many smaller credit unions aren’t willing to take some well-reasoned chances.
“They can be a little too quick to follow the regulators’ edicts,” he said. “I have nothing against the regulators, they play an important role in credit unions. But they cause credit unions to be extremely risk-averse. And if everyone is going after high-net-worth A-paper and price is your primary value proposition you won’t go too far unless you have scale.”
And smaller credit unions also need to collaborate more, Burke said.
“The smaller credit unions need to reach out to the bigger CUs and ask for help more than they do,” he said. “I know there is a little bit of fear on the part of smaller credit unions in doing that, as they think they might become merger bait. So they keep their distance from bigger credit unions because they view them as predatory—and unfortunately some of them are. But we have to collaborate to succeed—we are a cooperative movement. Even the big credit unions need to collaborate—at $4 to $6 billion in assets, that’s a drop in the bucket to the big banks.”
Registration information for the CUTomorrow Conference is available here.