Thinking Forward: The Tensions Behind Growth and the Cost of Not Choosing

Growth is an obstacle built into the nature of the credit union industry itself—stuck between a push and pull of founding principles on one side and the reality of what’s needed today to survive and thrive as a cooperative financial institution on the other.

This push and pull has created tensions of opposing forces—both hold merit, but they do not naturally co-exist. While each tension surfaces a strategic choice, many credit unions leaders have not yet answered the question “What are we willing to give up in order to grow?” nor acknowledged the cost of their indecision.

These are the four tensions we see most often.

Tension 1: Rigor Versus Speed.

Credit unions were built for careful, consensus-driven governance, with committees and layers of review designed to protect members. But markets and member expectations now move faster than a months-long review cycle can answer, and the same rigor that once protected the institution can now hold it back.

Tension 2: Mission Versus Profit.

Credit unions take seriously their status as not-for-profit institutions and their focus on returning value back to members. Credit union leaders also need to run a modern financial institution with modern technology costs. An overemphasis on short-term return of value to members could undermine the need for profits to invest in longer-term member value.

Tension 3: Independence Versus Scale.

Local control and going it alone have long been a point of pride for credit unions. The capabilities that now drive sustainability and the potential for growth, including data, payments, and AI, are expensive and specialized, and getting them usually means giving up some level of autonomy through partnering, joining a CUSO, or merging.

Tension 4: Broad Membership Versus Strategic Focus.

Decades of growth came from widening fields of membership and community charters, which rewarded a serve-everyone mindset. In a crowded market, that breadth dilutes the message, and a value proposition built for everyone tends to reach no one while focused competitors take the segments that matter.

To be clear, we are not recommending leadership teams prioritize one side of these tensions and ignore the other. The work is to determine how your credit union will reconcile these opposing forces to move in tandem. For example, reframing a focus on profit to be in service of sustainable delivery of the mission over the long term.

With the exception of community banks, most competitors do not have to deal with these tensions. They either never existed or have long-since been resolved, and their decisiveness is rewarded with the speed and clarity to deliver strategies that keep drawing members away.

As one credit union leader recently put it, there is usually an iceberg under all of this: the tensions get hardwired into the culture, structure, and operations of the credit union, and leadership teams tinker with what already exists, slightly shifting the needle in the murky in-between when the whole system needs recalibrating.

Here are a few questions you can bring to your leadership team to surface the quiet conflicts:

• Have we named and resolved any of these tensions within our credit union, and how did we shift the organization to successfully accept that shift?
• Which tension(s) do we keep knowingly or unknowingly circling, and what would it take to decide instead of discussing again?
• Which of our structures or routines quietly rewards staying in the middle, rather than forcing a decision?

The credit unions that grow well from here will not have the longest list of priorities. They will have leaders who name these tensions, make the trade-offs, and put structures in place that keep decisions from quietly eroding.

Growth, in the end, comes down to what a leadership team is finally willing to choose, including what it is willing to give up to get there.

—RW