What's in a Number?

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On October 8, my daughter MacKenzie will turn 14. That number seems striking. Across the course of my lifetime, certain ages have impacted me differently, and this has compounded since MacKenzie burst into my world. As someone who loves to celebrate, birthdays hold tremendous meaning. They give us time to reflect, share joy, and look ahead with those we care about most. This milestone feels especially poignant as it starts the two-year countdown for when my only daughter will begin to drive. In four years, she’ll be voting. The days left under our roof race away at what feels like an increasingly rapid pace.

As credit union leaders, we surround ourselves with numbers. When I meet someone at a credit union event, one of the first questions I’m often asked is, “What’s your asset size?” Our pricing from partners is frequently derived from our asset size or the number of members we serve. The balanced scorecards used by many credit unions include metrics like Return on Assets (ROA), deposit growth percentages, loan growth percentages, membership growth percentages, and delinquency ratios. Even our member experience is often measured through our Net Promoter Score (NPS) or Member Effort Score (MES). As a financial institution in a highly regulated industry, that makes sense. I believe fully that we must “do well to do good.”

Based on these numbers, we get anchored quite quickly in what “success” looks like. Filene Research Institute’s, “Strategy Errors Made by Even the Smartest CEOs: How to Avoid Them in Credit Unions,” outlines the power of behavioral economics. The study shares that “We all have built-in biases that affect the way we make decisions, in business as well as personal transactions. The first step toward managing these biases is to be aware of them. If we are aware of our predilections, we can keep them in mind as we make strategic decisions.”

Two of the biases outlined in the study relate to the numbers we study regularly: anchoring and herding behavior. The study explains that “people tend to anchor on the first number proposed during the negotiation. The tendency is to regard that first number as a baseline from which negotiations can proceed.” For us, that “first number” might be a particular asset size we believe is necessary for scale or a specific ROA target we think defines success. That, combined with herding behavior, or “the desire to conform to the opinions and behaviors of others,” can lead us to define success in ways that may limit the potential of our impact.

The financial health of a credit union might be even stronger if we start to define our success in bolder ways with different numbers. As we build our scorecards for 2025 and beyond, here are six considerations for measuring our long-term outcomes:

(1)? Start with the Impossible. With your purpose in mind, what’s the potential impact that the organization could bring to life for human beings? This could lead to conversations about financial wellbeing and members’ overall health. Consider how that impact could be even bolder. If more human beings had stronger financial lives that positively impacted their entire lives, what effect might that have on the community? You might imagine results that change local economies, enhance local non-profits, shape the trajectory of young adults, and create shifts on significant systemic issues like affordable housing.

(2)? Be the Benchmark. With bolder long-term goals, your metric might not yet exist. With an audacious outcome in mind, brainstorm with your team about the ultimate manifestation of success and begin a path toward tracking. As you set the benchmark and begin to track, you may learn along the way and need to adjust. We often think of our measures as being absolute and unchangeable. While we should document and deeply understand changes, as we create a new measure, we may learn and need to adjust as we hone a novel approach.

(3)? Stay Balanced. Any one metric can drive unexpected and even unintended behavior. As you review your annual and longer-term measures, how do they come together in a way that holistically moves the organization toward broader and deeper impacts without adverse consequences? According to SHRM’s “The Risks and Rewards of Employee Incentive Programs” by Lytle, “Wells Fargo could be considered the poster child of unintended consequences for incentives. In 2020, the financial giant agreed to pay $3 billion to settle federal civil and criminal investigations, admitting that employees had opened as many as 2 million fake accounts without customer authorization over a five-year period.”

Even if your credit union does not offer monetary incentives or bonus plans, people will adapt their actions toward what is deemed to be the priority. In “The Balanced Scorecard – Measures that Drive Performance,” Kaplan and Norton of Harvard Business Review write, “Think of the balanced scorecard as the dials and indicators in an airplane cockpit. For the complex task of navigating and flying an airplane, pilots need detailed information about many aspects of the flight. They need information on fuel, air speed, altitude, bearing, destination, and other indicators that summarize the current and predicted environment. Reliance on one instrument can be fatal. Similarly, the complexity of managing an organization today requires that managers be able to view performance in several areas simultaneously.” Most balanced scorecards today include operational and financial measures. The scorecards of the future must also include impact measures.

(4)? From Numbers to Stories. Impact measures matter so profoundly because they paint a picture of a future people want to create and be part of. While membership growth matters because it catalyzes the power of the cooperative to create even more impact, it will not matter to many who aren’t closely tied to the leadership of the organization. Alternatively, improving the number of human beings who own homes in a community, ensuring support for those impacted by domestic violence, improving the health of non-profit organizations, or closing the pay-income gap for women are all bold and vivid impacts that a credit union could generate. These actions can rally team members and the broader community. Imagine how an annual report might come to life and hold such power, showcasing these impact measures as they take hold and inspiring more people to support the cooperative finance model.

(5)? Leverage Horizons. Different horizons matter across a balanced scorecard with financial, operational, and impact measures. For example, in a challenging economic environment and a season necessitating infrastructure and technology investments, short-term earnings might be negatively impacted, but the long-term horizon would demonstrate the positive results that will enable scaling for the future. A focus on membership growth will have both long and short-term horizons. Operational focuses like member experience will have short-term horizons that cascade to long-term effects. Impact horizons will nearly always be long-term and may seem nearly hyperbolic. They are aspirational and inspirational. A balance between immediate action and long-term strategy can clarify focus, accelerate operational cadence, and bring purpose to team members’ work.?

(6)? Tie Behavior to Numbers and Outcomes. One of the reasons that Community Financial Credit Union shares our strategy on a napkin is to ensure that all team members across the enterprise understand the purpose of our work and their role in bringing it to life. A scorecard measures that work in action. Each leader must spend time with team members cascading the strategy and asking about daily behaviors that tie to the strategic aims. This brings meaning to the numbers and data, helps shape and grow financial acumen across the business, and builds awareness about the interconnectedness of strategy.

MacKenzie’s due date was an anchoring number for me, especially since we had faced challenges conceiving her. As I neared the end of my pregnancy, I remember grocery shopping, and there was a moment when the cheese and milk expiration dates were beyond her due date. It brought me so much joy and relief that her arrival was nearing. Since her birth, the number 8 remains a number I hold dear. She mentioned recently seeing milk with an expiration date of October 8 and how excited she was for us to buy that gallon.

Numbers matter. Within our organizations, they demonstrate progress, highlight deficits that need focus, and create alignment. When we craft a set of numbers together across a balanced scorecard that builds from the financial and operational into long-term impact, they can inspire and change the world.

How might you add one measure of impact to your credit union’s 2025 scorecard?