By James R. Schenck
As a credit union, we pride ourselves on making a “credit union difference.” Our passion for and connection with the communities we serve enables us to offer our members the kind of service and rates that for-profit financial institutions often can’t provide.
Even though all credit unions are relatively small compared to our competitors, we can dream big. We can set bold goals. Prioritizing stability and member loyalty is important—but so is ensuring our credit unions will be here to serve members in the future.
After several years of rolling three-year plans at PenFed, we decided it was time to look further and aim higher. We laid out what’s known in the business community as a BHAG – a Big, Hairy, Audacious Goal. The concept comes from Built to Last: Successful Habits of Visionary Companies, a 1994 book by Jim Collins and Jerry I. Porras that has become a classic in the business community. Though Collins and Porras make no mention of credit unions in their book, we’ve found their approach to be incredibly helpful for us as we’ve developed and cast our vision for the next 10 years.
A Helpful Approach
Here’s why the approach has proven so helpful for us, and why it may be the right fit for your credit union as well:
BHAG pushes everyone to the edge of their comfort zone. One of my favorite things about credit unions is the loyalty of our members. We get to partner with families over many years as they buy a car, a house, or save for their children’s education. This loyalty gives us a sense of consistency, the feeling that we know our members and rely on them in the same way they rely on us.
Without action, however, consistency and stability can slide into complacency. This is the benefit of the BHAG: By its very nature, it forces everyone to push themselves day in and day out. If we set our sights high, everyone has to bring their A-game each and every day if we want to make it happen.
BHAG deprioritizes short-term satisfaction. A big, hairy, audacious goal can’t be accomplished in a day, in a week, or even in a few years. By definition, it forces us to think for the long term. It makes us sacrifice short-term ease, comfort, and gratification for long-term growth.
In this respect, it’s an ideal model for credit unions. Because we’re accountable to our members and not to shareholders, we’re less focused on the ups and downs of the stock market. We can resist the temptation to be reactive and focus our energies on what will benefit our members down the road. It narrows our focus and sharpens our vision, so that we’re not sidelined by distractions or trends that prevent us from accomplishing our mission.
BHAG drives us to take perfect care of our members. Credit unions exist because of our members. Unlike for-profit financial institutions, which rely on investments of shareholders and pocket any profit, credit unions return earnings to our members and strive to offer better rates and world-class service.
This approach means that we cannot grow unless our members grow with us. A credit union will not be able to increase its assets unless its members willingly choose to entrust their finances to the credit union. This incentivizes our employees to provide best-in-class member service, empowering our members not just to manage their finances, but to make the most of their financial potential.
Rally Point
At PenFed when we rally around a BHAG, we can feel the energy as employees form teams to brainstorm new strategies working together to meet our far-reaching goal. We move forward with a shared sense of purpose, confident that we can make it happen. I’m eager to see the collaborations and changes that will continue to unfold as we chase our dreams.
There’s a popular proverb that says, “If you want to go fast, go alone. If you want to go far, go together.” Powered by the trust of our members, the strength of our employees and big, hairy, audacious goals, credit unions can go very far together.
James R. Schenck is president and CEO of PenFed Credit Union and CEO of PenFed Foundation.