Tradition says that strategy starts with your SWOT analysis. What are the Strengths, Weaknesses, Opportunities, and Threats to your credit union strategy? The longer you have used the SWOT analysis as the basis for your credit union strategic plan, the less helpful it will be to building your strategy as most SWOT analyses don’t change much from year to year.
A little history before I share my recommendation. SWOT dates back to the late 1960’s and was developed by Albert Humphrey of the Stanford Research Institute. It usually consists of a long list of items without a hierarchy of import, and, worse, without validation from external data. Some observations and opinions may very well be valid, but it is usually driven by the loudest voice in the room.
So, what should you replace SWOT with at your next credit union strategic planning session?
- Start with perspective. We use the 13 vital signs of a healthy credit union from TCT Risk Solutions. The simple “red, yellow, green” approach helps us understand where the credit union is winning and where the weaknesses are. This is straight fact with no emotion and helps lead the discussion on what good growth looks like.
- We ask the following two questions: “Where do we want to compete?” and “How will we differentiate?” This starts with understanding your legacy member and your ideal member. Having an ideal member and understanding their problems will help you build a strategy and set of tactics that helps you differentiate your credit union from the long list of competitors.
- What does the next-level look like? We break the credit union into several areas and define a next-level statement that is not true today, but we want to be true of that area of the credit union in the next 12-24 months. This keeps negativity out of the room, and it helps us build a vision and talk about how we can achieve that next-level vision.
Some credit union strategic planning facilitators live and die by SWOT. They are neither wrong nor right. I simply believe that, to have a healthy conversation and build a strong strategy for your credit union, you need to remove emotion and cognitive bias from the equation and focus on facts and vision.
If your traditional SWOT analysis isn’t working for your credit union strategic planning anymore, I have a time-tested strategic planning formula that has worked for many credit unions over the last 15 years, and can help yours too.
