Alone, We Could Not Have Achieved the Same Success
July 28, 2011I’m on the road again, so today we have a special guest blogger. Lisa Renner is Co-founder and Principal of The Renner Group, dedicated to building and implementing collaborative business solutions. Lisa is an expert in collaboration with a unique perspective, leveraging science and technology to turn thought into action with a high degree of accuracy, and at an accelerated rate of speed. We are fortunate to have Lisa leading a workshop at the Annual Meeting on Friday, September 30, at 2:00 pm. It’s called Return on Collaboration: Achieving Success Together. __________________________________________________________________ Alone, We Could Not Have Achieved the Same Success (How they made millions by Collaborating) [caption id="attachment_638" align="alignright" width="186" caption="Lisa Renner"][/caption] It was 2003… at a credit union conference two CEOs were having the typical conversation about how good things were at their respective credit unions. Times were pretty good for the industry. Then, one CEO asked the question that turned the conversation 180 degrees, “Where do you think credit unions will be in 10 years? What do you think we will look like? All industries experience peaks and valleys. Good times come and go. Maybe we should prepare to compete now while we still can.” See, these weren’t just any two credit union CEOs. They happened to run two of the larger credit unions in the U.S., and these guys are known for being exceptionally bright, innovative and proactive. So as the conversation turned, they began to explore what they needed to do to make their credit unions competitive for the future. At only 6% market share of financial services, credit unions have a lot of room to grow and a lot of competition. Even the big credit unions are small in comparison to the national bank competitors. What could these two credit unions do to compete against the Goliaths in their back yard (and the ones on the way)? After much conversation they realized that by collaborating deeply on technology (at the very heart of operations), they could build a platform for more collaboration in the future. At that time, these two represented $3.6 billion in assets and 264,000 members. Clearly, they could have their own robust IT systems and departments (and they did). But they realized that by collaborating they could offer better, faster, more service to members, with a higher level of expertise, and a lower cost… thus, a collaborative IT operation was born in 2004. Together (three partners today), they have achieved the kind of scale none could have achieved on their own - more than 606,000 members and over $8.3 billion in assets - ranking them together as the sixth largest credit union in the country. The collaborative has cut IT expense in half in 8 years for its partners. (Typically IT expenses go up every year.) They save each partner more that $2 million per year in IT expenses. But that’s not the only savings. They realized their combined purchasing power in negotiating IT contracts, so they put that buying power to work in other areas: debit card savings through negotiated contracts = $5 million savings per year; bill pay and online services = $1 million savings per year for the partners. So, what have the savings meant to the partners? How have they used that money? Well, for example, one credit union has a goal to better serve members by increasing branches. The savings allows them to add two branches per year without outgrowing their capital. When I talk to these CEOs today they are quick to tell me their credit unions would not be where they are today without collaboration. They are increasing service to members, lowering operating expense, sharing expertise and mitigating risk—all through collaboration. What is the key to this successful collaborative? Alignment. They built a solid foundation in the beginning by ensuring the partners are philosophically and strategically aligned, and they periodically measure to ensure alignment is maintained. As I look around at various industries, I’ve noticed a trend toward collaboration recently. Not just in the industries where you might expect it, but others such as healthcare, consumer products and energy companies. If businesses don’t grow, they die. Millions of executives head to work every day faced with the same daunting question: how will we grow the business? With money in short supply and growth stalled, organic growth and mergers aren’t enough to keep businesses alive. Executives are hungry for the next generation growth strategy that will enable companies to thrive into the future. In quiet pockets, businesses of all sizes are discovering collaboration as a revolutionary approach to business growth. I’ve been researching and implementing collaborative strategy for more than 10 years, and I am 100% convinced it is the emerging growth strategy for all industries. Organic growth and M&A are expensive—the key to winning the race is…how do you grow and cut costs at the same time… Collaboration! __________________________________________________________________ Want to hear more from Lisa on how fraternals can achieve success through collaboration? Be sure to register for the 2011 Annual Meeting in Denver.