A C-suite executive recently asked me, “One area where we have always struggled is with executives building their comprehensive plans. Have you seen that as a struggle elsewhere, and do you have any suggestions on addressing this?

Strategic alignment and coordination are vital in attaining strategic success. Strategic alignment ensures that all aspects of a credit union’s operations are synchronized and working towards common goals, enhancing efficiency, member satisfaction, and long-term success. This alignment starts by acknowledging that every strategic objective is cross-functional and cross-silo; the strategic objectives touch almost every aspect of the credit union. Here are some best practices to foster strategic alignment within credit unions:

Clearly Define Mission, Vision, and Values

Establishing a clear and concise mission, vision, and values is foundational for strategic alignment. This foundational step sets the tone for all strategic decisions and actions. The mission statement should articulate the credit union’s purpose, the vision should outline its long-term aspirations, and the values should reflect the principles that guide decision-making. These elements serve as a compass for decision-making and create a unified sense of purpose among employees, management, and members. The ongoing communication of these three elements is vital to sustainable success.

Engage Leadership

Strategic alignment begins at the top and is critical in setting the tone. Engage leaders at all levels in the development and execution of the credit union’s strategy. Often I have observed executive leaders focusing exclusively on their silos. A best practice credit unions should follow is to coach senior leadership to feel ownership of the entire organization, not just their silo. This focus correction must be paired with the regular leadership team meetings, identifying the strategic objectives in every session, not just the tactic work progress. These strategic conversations should foster cross-silo conversations where executives can be curious and even prickly about the progress, budget, resource allocation, and priority of projects and how they all fit together.

A best practice is to assign strategic ownership for each strategic objective to one senior executive. The strategic owner must understand that this responsibility is cross-functional and cross-silo and must exercise influence to get the needed priorities and effort with other senior executives. In this ownership role, the executive does not tactically manage the projects but has the following responsibilities:

1. Advocate for the resources and budget needed to achieve the objective.
2. Regularly report on a scheduled basis the progress, delays, and modifications of the strategic objective to the senior leadership team and the Board of Directors.
3. When the tactical teams come to an impasse or a conflict in priorities, the strategic owner is the tie-breaking vote.

Leadership must model and foster a culture of collaboration and teamwork by breaking down silos. Cross-functional collaboration ensures that different departments work cohesively towards common goals. This can be achieved through regular interdepartmental meetings, joint projects, and initiatives that promote a shared understanding of organizational priorities.

Engage Employees and Key Stakeholders

Involve key stakeholders such as employees, members, and community partners. Solicit their input to create a more comprehensive strategic plan considering diverse perspectives. Include all tiers of employees in the process to make them feel the strategic plan is theirs, not just for executives. There are two options to engage staff:

1. Provide a survey to each employee that asks their input on what they struggle with in their job, what they would like changed in their work, what they know the mission and values to be, what they think the vision for the credit union is, and how their manager and leadership behaves, motivates, and engages them.
2. Conduct one-to-one interviews with a broad cross-section of staff from entry-level to upper management and ask for their thoughts on the mission and values, how they perceive leadership, its style, and engagement, what they want to change in their job, what obstacles they face in doing their work, and what they want the credit union to become in the future.

One option fosters an open communication culture where employees feel empowered to share ideas and provide feedback. This ensures that the strategy is understood and embraced throughout the organization.

Align Goals with Member Needs

One of the things that makes credit unions a unique banking option is their core purpose, “People Helping People.” A for-profit focus and shareholder returns do not complicate this purpose. Aligning the strategic goals with the needs and expectations of members is an essential fundamental. In my experience of interviewing thousands of employees from entry-level to executive leadership, the resounding belief in this purpose of serving the member is evident. When the credit union connects the value a strategic objective has on the membership, there is a greater likelihood of top-to-bottom alignment. Regularly communicating this member-centric alignment will sustain this connection between strategy and the employees’ daily work. A side benefit is it also enhances member and employee satisfaction and loyalty.

Utilize Technology Wisely

Leverage technology to streamline operations, enhance member experience, and stay competitive. Ensure that technology investments align with the credit union’s strategic objectives. I have often observed organizations that know an application is not doing what it needs and tolerate this deficiency. Deficiencies in applications and software are even more damaging when they directly or indirectly impact the member. There are three best-practice methods to correct a technology deficiency:

1. Engage the vendor. I have often seen where a vendor has the tools and services the organization wants but were never installed, were not being utilized, were not initially purchased, or the company has added improvements or enhancements to their product.
2. Convert to a system that will better meet the needs of the member and the credit union.
3. In some situations, I’ve seen credit unions make the difficult decision to convert to a better provider even if they have to buy out of their current contract and take a one-time hit to their expenses.

In today’s financial services arena, data is essential to making better decisions and serving the members better. Getting a handle on the data is part of this challenge. This may include implementing a data governance discipline, advanced data analytics, upgrading digital platforms, and adopting innovative solutions (AI and machine learning) to meet evolving member demands.

When the staff knows the strategic decisions and goals are being made with a solid understanding of the members, they will be more inclined to align with the objectives.

Invest in Employee Training and Development

Equip employees with the skills and knowledge necessary to contribute effectively to the credit union’s strategic objectives. Something as essential as understanding the credit union business model, how it makes money, and how this dynamic is monitored through the Key Ratios is often lacking outside of finance and the executive team when employees understand the basics of the balance sheet and income statement and what the primary key ratios mean. Training programs should align with the organization’s goals and help employees adapt to changes in the industry.

A best practice to cascade and align the strategic plan is to train/inform employees how their jobs can impact these strategies and their impact on those objectives. These points of strategic impact are reinforced during the regular one-to-ones, team huddles, and performance reviews. The performance review goals should align with the employee’s functions that impact the strategic plan.

Establish Key Performance Indicators and Project Milestones:

Develop and monitor KPIs that align with the credit union’s strategic goals. Regularly assess performance against these indicators to measure progress and identify areas for improvement. Validate the strategic business plan and pro forma against the identified KPIs to validate that the assumptions made were accurate and adjusted as the data indicates. This data-driven approach enables informed decision-making and ensures the organization stays on track.

When the strategic objective business plan is crafted, it must contain key project milestones. This is critical since there are dependencies in most strategic projects; this must be done before this can be done; the progress of these milestones should be reported to the senior leadership team and, when required, to the Board of Directors.

Collaborate with Industry Partners

Credit unions depend on many key vendors, regulatory agencies, and even other credit unions. These relationships must be leveraged by collaborating with industry partners, regulatory bodies, and other credit unions to:

1. Stay informed about industry trends, best practices, and emerging challenges.
2. Identify how these key partners can support the attainment of the strategic Objectives.

A best practice is to schedule a meeting with these critical partners after the strategic plan has been agreed upon. A credit union I observed set an appointment with all of their key vendors. In this meeting, they shared their strategic objectives. They invited them to review them and provide the credit union with ideas on how these companies would support or achieve these critical goals.

Regularly Review and Update Strategic Progress

The financial industry is dynamic, and strategic plans must adapt to changing circumstances. A credit union I was working with had established a strategic objective to be the mortgage lender of choice in their market. They recognized this objective would require significant effort to review and update their mortgage product offering to make sure their products were relevant to their members, to align all o of their mortgage origination channels to the member experience was consistent and channel agnostic, to streamline the application through funding process to make it as easy to do business with, seamless, and friction-free as possible so the time from funding application could be shortened, and to launch an outside mortgage origination department designed to business development new alliances with realtors, new home developers, and major employers that transferred employees into the market. Shortly after the organization prioritized this, interest rates spiked, and the ROI of this strategic objective changed to make the risk/reward proposition unacceptable. Through a regular review and update cycle, the credit union strategy shifted to reflect market opportunity. The objective was adjusted to the streamlining and alignment of the process and product review to prepare the credit union when the mortgage market picked up again.

Establish a robust system for measuring and evaluating progress. Regularly assess key performance indicators, financial metrics, and other relevant data to determine if the credit union is on track to meet its strategic objectives. Use these insights to make informed decisions and adjustments as needed. An ongoing review must include the intent, purpose, projects, technology, market, and member needs.

Communicate, Communicate, Communicate

Clear and consistent communication is essential for strategic alignment. Ensure that all stakeholders are well-informed about the credit union’s goals, progress, and any changes to the strategy. This communication needs to be a priority and prevents the efforts made throughout the credit union from focusing on the urgent and vital work – attaining the strategic objectives and vision.

This communication must continually reinforce the why, the what’s in it for me, and how the member and the credit union will benefit by attaining the strategic objectives. This transparency builds trust and reinforces a shared commitment to the credit union’s success. Keeping everyone informed creates a transparent environment where employees understand their role in achieving the credit union’s objectives.

Cascade Goals and Objectives

Translate high-level strategic goals into specific, actionable objectives for each department or team. Cascading plans ensure that every employee understands how their work contributes to the overall success of the credit union. Establishing clear Key Performance Indicators (KPIs) for each level helps measure progress and hold teams accountable.

Implement an Agile Strategic Planning Process

The financial industry is subject to rapid changes, and credit unions must be agile in their strategic planning processes. Agile methodologies allow the credit union to adapt quickly to market shifts, technological advancements, and regulatory changes. Regularly review and update the strategic plan to stay relevant and responsive. The Board of Directors should know how Agile Strategic Planning may impact some objectives’ focus, effort, or completion to be prepared for these adjustments. Leadership must be ready to explain what is happening in the competitive landscape that requires the change and demonstrate what changes are being made.

Achieving strategic alignment in a credit union is an ongoing process that requires commitment from leadership, employee engagement, and a culture of adaptability. By following these best practices, credit unions can navigate the complexities of the financial industry, serve their members effectively, and build a foundation for long-term success.