Innovative is a core value; how do I get there?

Many credit unions I work with have “innovative” in their core values because thriving organizations know innovation is critical to their long-term success. We also know that organizations that fail to innovate risk being left behind in an ever-changing and competitive marketplace. No, it is unlikely that a credit union will become like Apple or SpaceX. For credit unions, innovation is not just about invention; it is about having a mindset for continual improvement and the search for excellence in serving the members, community, and staff.

Below, this article will explore the importance of innovation in your credit union, its benefits, and the steps to transforming into an innovative organization.

  1. Competitive Advantage: Innovation is essential for gaining or maintaining a competitive advantage. A company that can innovate and introduces new products or services that meet the changing needs of its members is more likely to succeed than one that fails to innovate. But innovation is also about continually improving its products, processes, and how it serves its members.
  2. Increased Efficiency: Innovation helps credit unions increase efficiency and productivity by introducing new technologies, processes, or systems. The efficiency and effectiveness of operations are improved when it streamlines its operations, reducing costs and improving overall performance. For example, automating manual processes to make them more seamless and frictionless enhances the member experience. Another example is using artificial intelligence to identify members more likely to adopt a deposit or loan product, which improves sales, marketing, and operational efficiency.
  3. Better Member Experience: Since “serving the member” is a credit union’s primary mission, improved member experience must be repeated. Innovation can help companies to provide better customer experiences. A company will increase customer satisfaction and loyalty by introducing new or improving existing products or services that can better meet customers’ changing needs. Innovation can also help companies improve the quality of their products or services, enhancing the member experience.
  4. New Revenue Streams: Innovation can help credit unions create new revenue streams. A company can tap into new markets and member segments by introducing new products or services. This will help to increase revenue and reduce dependence on existing products or services. In addition, being innovative with how existing products or services are used or marketed will also improve revenue and adoption.
  5. Employee Engagement: Innovation can help to increase employee engagement and motivation. Employees are likelier to be engaged and motivated when they feel their ideas and contributions are valued. Credit unions can improve employee engagement and retention by encouraging employees to share their ideas and providing opportunities for them to be involved in innovation. I like to think of this as distributed leadership, a leadership model where every employee is seen as an expert in their task or role, is challenged to identify better ways of doing their job and is empowered to have a voice in making their ideas happen.
  6. Future-proofing: Innovation is essential for future-proofing a credit union. A credit union can ensure long-term success by continually innovating and adapting to changing market conditions. Companies that fail to innovate risk becoming irrelevant and being overtaken by competitors. Most credit unions do scenario planning, the strategic practice of identifying potential risks and disruptions and making plans. Innovation is going to the next level of strategic planning. Instead of thinking about how the credit union can manage risk and disruptions, they identify how it needs to evolve, not just adapt.

Let’s agree that innovation is critical to a credit union’s success. It helps to maintain a competitive advantage, increase efficiency, improve the member experience, create new revenue streams, increase employee engagement, and future-proof the company. Credit unions prioritizing innovation and making it a core part of their culture are more likely to succeed and thrive in today’s fast-changing marketplace. Companies that fail to innovate risk being left behind in an ever-changing and competitive marketplace. But how exactly does a credit union become innovative?

Here are the steps to becoming an innovative company.

  1. Foster a culture of innovation: Innovation doesn’t happen by accident. Without a culture that encourages and rewards risk-taking, creativity, and experimentation, employees will continue to “do things as they’ve always done them.” Leaders must encourage their staff to share ideas and offer suggestions for improvement. This can be done by creating a supportive environment where employees feel comfortable sharing their ideas and know they won’t be dismissed, scoffed at, or punished for suggesting something that may not work or is unproven. Innovation requires failure and fixing, trial and error; an innovator seldom gets it right on the first or second effort.
  2. Encourage cross-functional collaboration: In today’s credit union, virtually every strategic project requires a cross-functional effort across departments and silos. The perfect setting for innovation is when people with different perspectives, backgrounds, and experiences come together to solve a problem. Encourage employees from other departments to collaborate and work together on projects. This is when a cross-functional team feels that they own the entire project, not just their department’s tasks, and the cross-functional team holds brainstorming sessions to see an overall improvement in the project result. Too often, instead of innovating in this way, team members work to fit the new product, process, or system into their current processes or procedures instead of seeking better, more efficient, or effective ways of doing the work.
  3. Invest in research and development: Credit unions serious about innovation should invest in research and development. This could mean allocating resources to a dedicated R&D department, partnering with universities or research institutions, seeking fintech partners, or even providing employees the time and resources to explore new ideas and technologies. An R&D department is not in the cards for most credit unions. Alternatively, having one executive with innovation added to their job descriptions. This executive is tasked with reviewing FinTech companies, being a listening post for staff ideas on process and product improvements, hearing the pain points in processes, and potentially attending innovation events and conferences.
  4. Embrace technology: Technology is a crucial driver of innovation in many industries. Credit unions should be willing to embrace new technologies and explore how they can be used to improve their products, services, or processes. This could mean investing in new software or hardware or hiring experts that want to drive innovation. A large credit union would invite its critical vendors to a strategy meeting as part of its strategic planning process. In this meeting, the executives would share their strategic plans and objectives. The credit union then invited each vendor to come back with ideas about how they could support this plan and its objectives. From this, the credit union got fresh ideas from organizations that have experienced similar challenges with other clients.
  5. Be willing to take risks: Innovation requires risk-taking. Credit unions should be willing to take calculated risks to try new things and explore new opportunities. This means being willing to invest time, money, and resources into new projects, even if there’s a chance they may not work out. Part of risk-taking is identifying the credit union’s risk tolerance. Identifying the risk tolerance is done when the credit union has a risk matrix that scores each product or project based on the following criteria:
    1. Cost to buy and implement.
    1. Time to implement.
    1. Resource needs.
    1. The opportunity the product or process brings.
    1. Potential impact on the credit union.
    1. Potential impact on the member.
    1. Adoption or utilization risk.
    1. Risk of failure.

Each of the eight categories is scored on a 1-10 scale (weightings to each score may be applied), and the risk of the project or product is measured through the total and averaging of the scores so the organization can determine whether the risk is worth the reward.

  • Know when to walk away: Credit union needs to know there is a chance they may need to walk away from an innovative product or solution. An innovative organization realizes that sometimes innovation doesn’t work. They need to know when to take their losses and move on when that happens. Often, I have seen credit unions tolerate a terrible solution just because they have a contract with a vendor. The credit union needs to have a process to determine when they should buy out the contract, take their losses, and move forward with a solution that will work better for their members or the staff.
  • Measure and track innovation: Finally, credit unions should measure and track their innovation efforts. This can be done by setting goals and metrics for innovation, monitoring progress over time, and celebrating successes. By measuring and tracking innovation, credit unions can identify what’s working and what’s not and adjust to continue driving innovation forward. Innovation is never a “one-and-done” situation; it requires consistent monitoring and maybe tweaking.

Becoming an innovative credit union requires a deliberate effort to foster a culture of innovation, encourage cross-functional collaboration, invest in research and development, embrace technology, take risks, and measure and track progress. Following these steps, a credit union can become an innovative leader and position itself for long-term success and growth.


Rich Jones is the Founder/Principal of Leading2Leadership LLC. Before starting his strategic planning agency, he spent over 20 years in leadership roles in the financial services sector. Before becoming an executive in the financial services sector, Rich was an entrepreneur, building and selling two businesses and working for early-stage start-up companies in executive roles in marketing, business development, and seeking investment partners. With more than three decades of experience, he brings innovative thought to companies and executives. Rich published “Leading2Leadership, a Situational Primer to Leadership Excellence.” The book is available on and was designed to be used as a book study for leadership development programs; it breaks leadership skills into manageable situations for discussion and reflection. Rich works with credit unions, CUSOs, and vendors, designing digital, data, culture, marketing, and branding transformation strategies. In 2014, Chosen as a Credit Union Rock Star by CU Magazine, and in 2018, Rich received the Lifetime Achievement Award from CUNA Marketing and Business Development Council. A Marine and graduate of Colorado State University, Jones shares his expertise at

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