Fancy, corporate bullshittery for the strategy our most successful credit union clients already employ: focusing on a target market, serving them well, and being okay with not being all things to all people.

I was recently on a flight to visit a credit union client, and Jim Cramer was interviewing the CEO of KeyBank, Chris Gorman. In terms of marketing strategy, KeyBank is in a weird limbo. It is too big to be a community bank, but far too small to be considered a megabank. Interestingly enough, it’s actually in a sweet spot, according to Gorman. That’s where their “targeted scale” strategy comes in.

KeyBank’s “targeted scale” strategy focuses on achieving growth and efficiency by concentrating resources on specific client segments and business areas, rather than pursuing broad, indiscriminate expansion. This approach enables KeyBank to offer differentiated services tailored to the unique needs of its chosen markets, setting it apart from competitors.

Gorman emphasizes that growth should be strategic and client-focused, rather than simply increasing size for its own sake. On a recent episode of the Evergreen Podcast, he states, “I don’t think scale just for scale’s sake makes a ton of sense. It would have to have a very high bar strategically.”

An example of this strategy in action is KeyBank’s recent $2.8 billion minority investment from Scotiabank. This capital infusion is intended to strengthen KeyBank’s balance sheet and enhance its capacity for growth in targeted areas, such as investment banking, payments, and wealth management. Gorman notes that the investment, “creates greater capacity for growth by enabling additional investments in targeted scale across our franchise and increases Key’s strategic agility.”

By focusing on targeted scale, KeyBank aims to deliver unique, holistic solutions and nontraditional services to its clients, thereby enhancing its competitive position in the financial industry.

While KeyBank may be much larger in size than HopeSouth Federal Credit Union ($31million), the “targeted scale” strategy has been just as successful for this small, boutique credit union. Located in a rural, South Carolina county filled with predatory lenders and the abandoned branches of banks that deserted the area through the years, HopeSouth continues to fulfill its mission.

They continue providing financial hope by focusing on people who need a fresh start with their finances. It has paid off big over the last decade with an average of 2% ROA, double digit loan growth, and steady membership growth. Recently, in their strategic planning session, the board and leadership team committed to doubling down on their targeted scale strategy with some bold decisions and innovative tactics over the next few years.

In the interview with Jim Cramer, Gorman summed up KeyBank targeted scale strategy like this: “Know where we win, how we win, and why we win.” In this new year, if you find yourself stuck, perhaps your strategy needs a reset. Through some tough, strategic conversations and finding your own targeted scale strategy, growth is possible.

Over the last two decades, we have helped hundreds of credit unions get unstuck and find pathways to sustainable and meaningful growth. We can do that for you, too.