Balancing Responsible Growth vs. Growth At All Costs

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The Challenge You Face

Credit union leaders must navigate the challenge of achieving growth in a responsible and sustainable manner, especially as economic conditions fluctuate.

Growth can mean various things—such as increasing membership, expanding assets, or growing deposits—but it’s crucial to understand that not all growth is beneficial.

Leaders need to exercise patience, align their strategies with current economic conditions, and avoid pursuing growth at all costs.

Instead of chasing arbitrary growth targets, they should focus on long-term health and sustainability, ensuring that incentives and metrics are aligned with the credit union’s best interests.

Sounds easy enough. But how do you do it?

What Credit Union Leaders Are Saying

You can’t stop the waves, but you can learn to surf. - Brian Lee

Brian uses this metaphor to illustrate that growth should be responsive to the economic environment. Just as a surfer waits for the right wave, credit unions should time their growth initiatives carefully, taking advantage of favorable conditions rather than forcing growth.

It is very dangerous, in my opinion, to incentivize an executive, particularly a CEO, on a blanket growth statement. - Becky Reed

Becky emphasizes the need for clarity and precision in growth incentives. Blanket growth targets can lead to actions that are not in the best interest of the credit union, such as offering unsustainable deposit rates just to meet a growth metric.

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Key Takeaways

??Growth Should Be Strategic

Just like a surfer waits for the right wave, credit unions should time their growth initiatives to align with favorable economic conditions. Don’t force growth—be responsive to the environment.

??Incentivize Growth with Care

Avoid setting blanket growth targets for executives, especially CEOs. Broad, unrefined growth incentives can lead to risky decisions, such as offering unsustainably high deposit rates just to hit a target. Precision in growth incentives is crucial.

??Prioritize Long-Term Health

The long-term sustainability of your credit union should always come first, even if it means slowing growth temporarily. Maintaining a strong, adaptable financial position is essential to navigating future economic challenges without risking instability.

Other Topics From The Episode

?? How To Make Your Mistakes Matter

According to a PwC survey, 86% of executives say they trust their employees, but only 60% of employees feel trusted. What can you do to win the confidence of your employees?

?? Rethinking Balance Sheet Management

In a post-pandemic world of rising inflation and fluctuating interest rates, how do you adjust the way you manage your balance sheet to stay ahead of the curve?

?? Listen To Brians's Episode

Listen To The Episode For More

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Sources For Our Topics

?? PwC’s 2024 Trust Survey

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Voices From The Community

Thank you, Nicole L. Bowen, NCCO, CUDE , and CUWLA -Credit Union Women's Leadership Alliance for the insight!

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How can we support women in the industry?

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