24 THE NAFCU JOURNAL MAY–JUNE 2022 When your credit union has profitable, sustainable growth, you can reinvest more of your earnings back into your stakeholders. This could mean success sharing rewards for employees, year-end bonus dividends for members, and more philanthropic activities within your local community. As credit unions reward their three stakeholders, it reinforces the purpose and propels the organization forward. To help credit unions put purpose into action, our team at Callahan & Associates developed a framework which highlights a virtuous cycle that starts and ends with purpose—Callahan’s Sustainable Growth Framework. Strategic Implications In addition to driving employee and member engagement, the focus on purpose helps drive differentiation. Certainly, credit unions need to have fair rates, reasonable fees, and appealing products, but most do not need to be market leaders in these areas. Where credit unions do need to be leaders is on delivering emotional connections. Behavioral science shows that upwards of 70% of consumer decisions are made based on emotion, yet many credit unions choose to compete on rational tactics like rates and fees. Leveraging purpose can help shift the narrative and build an emotional connection. Stakeholders with a strong emotional connection become advocates, internally and externally, for your cooperative. Once employees fully believe your purpose, they need a new way to measure success. How we track our success, the metrics we use, will set the stage for our short- and long-term outcomes. As regulated financial cooperatives, we have an obligation to keep our eye on metrics our boards and regulators watch: ROA, Net Worth, Delinquency, and Concentration Risk to name a few. But when implementing a purpose-driven strategy, non-traditional, impact-based metrics must be included on your scorecard, or you risk not seeing true progress. We have all heard the sayings such as “we measure what we treasure” or “what gets measured, gets done” and this is especially true with purpose. Tracking success in new ways takes two forms: one is new framing, and the other are new attributes. For framing, instead of tracking dollar of first mortgage loans, perhaps report how many families your credit union helped own their home; and report on financial resilience of your members by the percent of members who have $400 in savings. For new attributes, consider reporting how much money your credit union saves members by refinancing loans at lower rates; or how many members were given access to financial services who were historically excluded and therefore shut out from building wealth. Tracking your actions and innovative activities reinforces what is important at your organization and reporting the impact on improving members’ quality of life brings your purpose to life. Mindset for Implementation Leaders who choose a purpose-driven path are committing to a long view. Leading with purpose requires organizations to transform, and transformational journeys take time. In addition to time, transformation takes strong alignment and consistent communication. For CEOs to successfully execute a purpose transformation, it requires concerted and extensive board communication, as well as hyper focus on internal culture and stakeholder communication. To close the “ In addition to driving employee and member engagement, the focus on purpose helps drive differentiation. Certainly, credit unions need to have fair rates, reasonable fees, and appealing products, but most do not need to be market leaders in these areas. Where credit unions need to be leaders is on delivering emotional connections. ”
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