Browse by Type

Blog Post |

A Cure for Headaches

These are times of rapid change in our industry, and Filene developed its Center for Organizational Entrepreneurship specifically to help credit unions navigate this era of disruption. 

Last week I was fortunate to attend a colloquium at Filene’s Center for Organizational Entrepreneurship, held at Harvard. My colleague Andrew Downin and I were joined by an assortment of credit union and CUSO leaders from all over the US and Canada. The theme was Structured for Innovation and we explored how organizations can best structure themselves to nurture innovation.

I wasn’t counting, but during the first hour alone I heard the word “disruption” more times than I have toes. I began to wonder if we were casually overusing the term? Were we kidding ourselves about the rapid pace of change and disruption present in the financial services industry?

The tension headache

Disruptive innovation” was coined by Clayton Christensen, Harvard Business School professor, to describe “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors." Today if you use mobile technology to get a loan or send money, the “start-up” providing these low-end services is indeed poised to “relentlessly move upmarket” and its sights are on “displacing established competitors.” Disruption is real. Disruption is now. This is the source of the tension headache plaguing every credit union leader today.

Thankfully we gained insights at the colloquium to help credit unions negotiate these challenges. Maura Haley and Nacie Pereira of Zipcar, a car-sharing company that’s disrupting the automotive sales industry, shared that keeping employees aligned on goals during rapid change is a huge challenge. Tension exists along the spectrum of employees from most-to-least willing to innovate, and after several months the rapid pace of change renders annual development goals obsolete.

Rory MacDonald of Harvard Business School presented on disruptive innovation, and shared that every successful product is solving a problem—or doing a job that needs doing. Yet rather than focusing on the innovative product, the better approach would be to listen to our consumers to understand the characteristics of products that are most appealing, and this understanding brings us closer to innovation.

A hybrid approach

Julie Battilana of Harvard Business School presented her original research on hybrid organizations, which, like credit unions, have dual goals, such as commercial and social goals. To be successful hybrid organizations need to balance the tension between goals to avoid culture drift, or to lose sight of the overall organizational goals. Battilana suggested that since hybrid cultures face constant trade-offs between the two goals, hybrid organizations could cultivate negotiation strategies within their organizations to preserve the necessary tension between the two goals.

Finally, Filene Fellow, Dennis Campbell, presented his latest research, Conexus at a Crossroads, a case study of Conexus Credit Union’s path towards innovation. Campbell pointed out that over time, long-term, successful businesses eliminate the traits that foster exploration, variation and innovation. It’s no surprise that so many credit unions struggle to adapt during disruptive change. To address this problem, Conexus Credit Union is turbo-charging its innovation efforts. Annette Revet, Chief Transformation Officer at Conexus, shared their struggle with ambiguity; they don’t know exactly how to get where they want to be, but they are trying different strategies, knowing some will fail. But they take these risks nonetheless to find the ones that win. Conexus is undergoing a full organizational restructure, a type of structural ambidexterity, as well as utilizing contextual ambidexterity in their latest effort to foster new innovation in their organization.

Something to ease the pain

These are times of rapid change in our industry, and Filene developed its Center for Organizational Entrepreneurship specifically to help credit unions navigate this era of disruption. Other resources available to you from this center are reports: Designing Credit Union Culture which details how a bank in Sweden is stunningly successful by giving each branch latitude in creating its own culture. The report Structures for Innovation addresses how different organizational structures can foster innovation. Dennis’ latest report is a case study that invites us to follow along with Conexus as they test these concepts in action. Along with this report, Filene created an online case study forum to bring your thoughts and ideas into the ring.

These resources are here for you, and we invite you to engage with us and get involved. Here's what you can do:

  • Participate in the Conexus Online Forum, and share your ideas on how you would direct the innovation efforts at Conexus Credit Union.
  • Attend a colloquium and make friends with leading thinkers, like Dennis Campbell or Annette Revet, who are passionate about credit unions, and have some seriously good ideas about how to keep credit unions humming for a long time.

In the meantime, take something for that headache and know that we are here for you, credit unions. We've got your back.