Mergers are something no righteous credit union would consider, right? There’s no way!
Whoa! That kind of indignant mindset, the ostrich with it’s head in the sand, is, quite frankly, rather selfish and prideful, and is a leading cause for the demise of many credit unions today.
A caveat. I am not for unnecessary mergers. I’m not for mergers if they don’t need to happen. I mean, the fewer credit unions there are, the smaller the market I have for my business. But if merger means continuing to offer top notch products and services for members rather than see them sidle off to the competition…if a credit union just doesn’t have the resources to keep members coming in the door…then, come on.
I mean, credit unions are supposed to be member driven, aren’t they? And if they can’t “do it” themselves - meet members’ satisfaction – they need to find a solution. And merger might be the best solution.
Now, having said all of that, I do think there is a more amenable attitude to the idea of merger out there today, as there should be. With all of the competition credit unions contend with, merger needs to be an option discussed as a strategy.
But it needs to be done in a methodical, organized way. First, make sure that it is indeed the best solution for your particular situation. Then make sure all of the major players – board and management – are on board with the idea. Then consider your members – what will you communicate and how will you communicate it?
And last but not least, consider your employees – how is it going to affect them? Will the culture of the new organization be the same? Do you want it to be? What is going to be in the best interests of your members? You might find some good ideas from an article on CreditUnions.com by Mike Werstuik, “What Disney and Pixar Can Teach CUs About Mergers”.
I don’t think anyone who has been associated with credit unions for any period of time wants to see any of them go away. But the reality of the marketplace is that that is what is happening and is going to continue to happen. A credit union’s best course of action today would be to have some conversations about it, have some conversations about their future and then plan for that future. There quite likely will be a merger in it – somewhere.
2 comments so far
1 Jeffry Pilcher // Jun 18, 2008 at 3:18 am
Most credit union CEOs are serious businesspeople unconcerned with the philosophy of mergers. These CEOs won’t worry too much about the industry insiders who mourn the “loss” of one credit union when two merge — the idealists who dismiss the business case for mergers while ignoring today’s competitive landscape and forgetting the economic model that built this country: Growth. Mergers are simply one way to fuel growth.
Like it or not, capitalism creates winners and losers. I’m rooting for CUs, and if mergers are what it takes to see CUs win, then I support them.
2 Denny DeGroote // Jun 23, 2008 at 11:26 am
6-23-08
Jeffrey,
Thanks for the feedback. Well said!
And although there seems to be appealing aspects of “the way it used to be” - it was a slower and a kinder time - the reality of the marketplace is “Grow or Die.” And, merger a very real way to accomplish that.
Denny
Leave a Comment