Client Results Achieved by Haines Centre for Strategic Management 2

Client Results Achieved by Haines Centre for Strategic Management

Industry Type Location Public/Private Annual Revenue Length of Engagement
Credit Union (P) California Public Not-for-profit 5 years (on and off)

 

From: A bankrupt credit union with no sponsor. To: A profitable credit union with a promising future.

 

Business Problem Solutions Major Results
  • Because of large losses, the National Credit Union Administration had issued a “Cease and Desist” order, and were prepared and willing to take over the organization if necessary
  • Critical issues list was developed regarding what was facing them
  • Systems Thinking was introduced at a retreat and planning session
  • The board and senior management came to agreement on how to restructure and transform the credit union into an entity that had a chance to survive
  • A new clarity of purpose and direction that both groups supported was created.
  • Board was not embracing the changes required for survival
  • Developed an internal current state assessment
  • Developed a complete economic set of historical and current documents to ensure the survival issue was clear to the board
  • Consensus emerged on the future vision.
  • Honored the history and growth of the credit union, which was extremely important to the board, while rapidly moving forward
  • The board was reluctant to agree to a set of measurable financial goals
  • Ten key decisions that held the distinct possibility to actually transform the credit union into a new entity were developed and presented to the board by the management team and facilitated by Steve.
  • Despite the conflict and disagreements, the Board and management came to a consensus action plan and an overt agreement on that ominous reality of the situation
  • It was decided long-term success must focus on only their one home state, and the other branches must be sold
  • Several branches and divisions were literally hemorrhaging money
  • Had to show the board that the customers in the other states would have the option to be better taken care of by a larger financial institution, and that the employees in those states would be better off too, with higher salaries and benefits if their branches were sold to a larger financial institution
  • A deal was struck by the CEO to sell the branches for an ideal price, and the board approved it.
  • Got rid of money-losing branches, streamlined costs and provided them capital they needed to begin planning for new branches and aggressive marketplace advertising and awareness of their new brand name

Testimonials

“No testimonial yet”. CEO of Credit Union

In the late 1990s, this credit union was losing money with no game plan for recovering. Expenses were out of control and no real plans or budgets were in place. Their sponsor moved out of the geographic region they were in and merged with another organization Their Audit Committee was only minimally functioning and the board was passive and submissive to an autocratic CEO. Market share was minimal and many customers were paycheck cashers only.

Strategic Thinking was introduced, as was the ABCs of Enterprise-Wide Change Model. It was agreed the organization was in a survival mode, yet they were in serious conflict with their board over their future direction. What was needed was a new Clarity of Purpose and direction that both groups supported.

Steve facilitated a retreat for the management team, and surprising consensus emerged on the future vision. It was decided long-term success must focus on only their one home state (despite three branches in other states). This turned out, in retrospect, to be the trump card in the entire process with the board. Despite the conflict and disagreements, the session ended with an initial vision and strategic plan. The board recognized their unprofitably and lack of clear positioning, and reluctantly agreed to a set of measurable financial goals.

The CFO constantly developed and updated simple, one-page economic documents during the transformation process. He used them to constantly remind the board of the enormity of the situation. He also kept data in front of management and the board regarding the customers being poorly served in the branches in the other states where their market share was miniscule. These documents were extremely valuable in every Board meeting as well as in all the management sessions.

With the assistance of Steve and the efforts of the management team and the board, the company decided to divest itself of its branches in other states, as well as several other money losing divisions. It was a significant win as it immediately eliminated money-losing branches, streamlined costs and provided them the capital to amortize the newly built branch’s excess construction costs over its value. It also gave them the capital needed to begin planning for new branches and aggressive marketplace advertising and awareness of their new brand name. Their capital ratio soared into the proper range.

It was a win for the customer (member), a win for the affected employees, and a win for the new credit union. Now they are able to actually work to acquire a presence in their chosen marketplaces. The transformation to a new credit union was assured with the sale of the branches and the capital infusion, and a profitable future is now a possibility on the immediate horizon.