Las Vegas, Nev. (April 30, 2008) – Attendees at the Wednesday, April 30, general session of the NACUSO 2008 Annual Conference were treated to a special keynote presentation by Randy Karnes, CEO, CU*Answers, followed by a special question-and-answer panel dialogue between Dave Serlo, president/CEO, PSCU Financial Services, Stan Hollen, president/CEO, CO-OP Financial Services, and Randy Karnes. NACUSO president/CEO Thomas C. Davis led the panel dialogue.
Opening the morning session, Karnes introduced concepts related to how credit unions could use network business designs to re-engineer credit union operations, with his keynote presentation “Will Network Business Design Capture the Imagination of Future Credit Union Leaders?” Karnes believes the trendy “network buzz” in today’s marketplace is talking about collaboration, alliances, and building networks to achieve success, because everyone wants more, faster, and at lower cost.
According to Karnes, from the technical concepts of players like Cisco to captivating business models like Google or Facebook, the inspiration of “network designs” has been at the center of innovation for over a decade. Consumers get it. Karnes asks why these designs haven’t inspired credit unions and CUSOs in the same way, and what would it mean if the marketplace recognized a credit union network. “Technology may be the foundation of a “networked” world, but it is not the entire solution,” said Karnes. “Entities like Google, YouTube, and Linked In have moved closer to matching the marketplace’s requests. The point is people are beginning to wonder, what are the drivers behind building successful businesses in a networked world? Can business designers bring network principles into their models for success and gain an advantage? Could credit unions and CUSOs be successful as a networked model?”
Karnes foresees the beginning of this new network starting with CUSOs, then incorporating credit unions to create the ultimate financial service solution for the everyday consumer. “We think there is more to this than simply marketing to consumers. Consumers are beginning to see the power in networks,” Karnes noted. “A “network” implies a way of doing business; it has value to search, find, and act with more speed, earnings, and satisfaction.”
Moving forward, Karnes explained that using business network design to re-map business processes would allow the industry to play where members play, focus inside-out and outside-in simultaneously, respond to vested external innovators, expand the human resource pool by leveraging peers, and to consider a new set of network pricing concepts. “It’s working for CU*Answers, and we believe it can work for every CUSO’s business plan,” Karnes said. “If so, it will set an example for the entire credit union industry.”
The credit union network Karnes envisions places CUSOs at the hub of a network wheel, with the central hub of CUSOs surrounded by credit union satellites. The opportunity and focus shifts from today’s two-way communication between a CUSO hub and credit union, to an expansive networked opportunity and focus, whereby all credit unions and CUSOs in the network can see one anther and transact together simultaneously. “The network multiplies the work of one into an opportunity for all of its participants,” Karnes said. “Which is bigger, the opportunity of one, or the opportunity of all, and what do we need to do to be at the foundation of a networked credit union industry?”
Karnes then joined his distinguished colleagues Dave Serlo, Stan Hollen and Tom Davis. Davis led the question-and-answer panel dialogue to discuss the possibilities for CUSOs to lead the way in developing a network foundation, as the inspiration for a credit union network. “How important is collaboration?” Davis asked. According to the panel, credit unions and CUSOs must collaborate or die, with less talk and more implementation of solutions for credit unions and their members.
Speaking to collaborative barriers and how to overcome them, Davis posed the question, “How can we challenge credit union leaders to collaborate?” The panel’s answer included motivation through economies-of-scale. Cultural clashes, ego among credit unions, and non-balance sheet items of less focus were singled out as barriers to collaboration. The issue of trust between credit unions and CUSOs was considered the single largest barrier by the panel.
The panel concluded with solutions to overcoming barriers to collaboration. One solution, more aggregation, was described as the critical means to success. In addition, the panel felt that leaders must define an inclusive industry model. Other solutions recommended were for CUSOs to start looking at their own business plans, including their contracts and prices, to find ways to reduce barriers. CUSOs proving their value through actions, sharing, and ownership was also viewed by the panel as a realistic method to reducing barriers and challenging credit union leaders to collaborate more.
