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Superior Consumer Lenders During the Great Recession

Flywheels turn, not from one big push, but from the input of deliberate regular force. Consumer lending is similar. This brief describes the secrets of the all-too-rare credit unions that drove sustained consumer loan growth during the Great Recession. Even though each credit union was able to keep growing loans throughout the downturn, none had stumbled upon a wholly new product or program. They were adept and consistent at pushing their flywheels.

Executive Summary

What do flywheels and successful lending credit unions have in common? In his business bestseller Good to Great, Jim Collins introduces a telling metaphor for business success: the old-fashioned flywheel. 

Picture a huge, heavy flywheel—a massive metal disk mounted horizontally on an axle, about 30 feet in diameter, 2 feet thick, and weighing about 5,000 pounds. Now imagine that your task is to get the flywheel rotating on the axle as fast and as long as possible.

Pushing with great effort, you get the flywheel to inch forward, mov-ing almost imperceptibly at first. You keep pushing and, after two or three hours of persistent effort, you get the flywheel to complete one entire turn.

You keep pushing, and the flywheel begins to move a bit faster, and with continued great effort, you move it around a second rotation. You keep pushing in a consistent direction...Then at some point—breakthrough! The momentum of the thing kicks in in your favor, hurling the flywheel forward, turn after turn...The huge heavy disk flies forward, with almost unstoppable momentum.

Now suppose someone came along and asked, “What was the one big push that caused this thing to go so fast?”

Anyone who had spent time pushing the flywheel would scoff and reply that the momentum came slowly from perseverance and patience. No big pushes, no silver bullets.

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