CFCFE Strategy Reimagined Slides - DR Jeff Callander

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Strategy ReimaginedConnecting Purpose with Strategy

(and Action!)Date: Monday 29th March 2021 11.55 – 12.30

Speaker: Dr Jeff Callander

© Dr Jeff Callander 1991-2021 1

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For a strategy to be successful, it needs clarity of Purpose


Jeff

[email protected]

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Working with Execs to develop and use strategy as a leadership tool

Director of EMA Consultancy Group (+30 years) – Strategy Advisor

Developing tools / techniques to analyse / quantify opportunities

Over 160 projects in over 50 countries

Director/Founder of IESL (+25 years) - Oilfield engineering service company

Executive Fellow & PD of Henley Business School and UoS

Teaching, lecturing, workshops

Doctorate (DBA) at the University of Southampton – Business Goal Setting

Dr Jeff CallanderPractitioner & Academic


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Dr Jeff Callander 1991-2021

Brazil

United States

Canada

Greenland

Mexico

United Kingdom

Ireland

Spain

France

Norway

Iceland

Sweden

Finland

Cuba

Italy

Egypt

GermanyPoland

Greece

Switzerland

India

Australia

Japan

China

Russia

Venezuela

Guyana

Suriname

French Guiana

Columbia

Ecuador

Peru

Bolivia

Chile

Argentina

Paraguay

Uruguay

Falkland Islands

Haiti

DominicanRepublic

Jamaica

PanamaCostaRica

NicaraguaEl Salvador

Honduras

BelizeGuatemala

Portugal

Estonia

Austria

Turkey

Algeria

Libya

Morocco

Czech Rep.

Denmark

Lux.Belgium

Netherlands

Tunisia

Belarus

Ukraine

Romania

Moldova

Lativia

Bulgaria

Hungary

Slovakia

Serbia

Russia

Chad

WesternSahara

Mauritania Mali

BurikinaFaso

Israel

Lithuania

Albania

Bos. &Her.

NigerSudan

Croatia

Cyprus

Jordan

Syria

Senegal

The Gambia

Guinea-Bissau Guinea

SierraLeone

Liberia

CoteDivoire

Ghana

Togo

Benin

Nigeria

Cameroon

CentralAfrican Republic

Equatorial Guinea

Gabon

Rep. ofThe

CongoDemocratic

Republic

Of the Congo

Angola

Namibia

South Africa

Eritrea

Ethiopia

SomaliaUganda

Kenya

Rwanda

Burundi

Tanzania

Malawi

Mozambique

Madagascar

Zambia

Botswana

Zimbabwe

SaudiArabia

Iraq

Kuwait

Bahrain

Qutar

United ArabEmirates

Oman

Yemen

Pakistan

Afghanistan

Iran

Georgia

Armenia Azerbaijan

Turkmenistan

UzbekistanKyrgyzstan

Tajikistan

Mangolia

Nepal Bhutan

Sri Lanka

Bangladesh

Burma

Thailand

Laos

Cambodia

Vietnam

Taiwan

South Korea

North Korea

Indonesia

Malaysia

Singapore

Brunei

Philippines

PapuaNew Guinea

New Zealand

SolomonIslands

Malta

Swaziland

Lesotho

East Timor

IDV

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* Strategy: a concept or a practice?

* Reimagining strategy: strategy as a Leadership Tool

* Purpose: essential part of creating successful strategies


Key Themesema

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* …Ensuring everyone buys-in to the Purpose and is able to contribute to the organisation’s success

* …Developing agility, resilience and a strategicmindset within the organisation

* …Identifying opportunities and managing risk

* …Ensuring successful implementation

* …Building stakeholder engagement to enable the business to survive, revive and thrive in the future


Strategy is about…ema

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Telos - Meaning & Purpose

Meaning and purpose is what contributes to “buy-in”.

Buy-in is the acceptance of and willingness to actively support and participate in something.

Yet company engagement surveys repeatedly show that employees do notbuy-in to their company’s business goals.


^384–322 BC*from the Greek τέλος for end, purpose, or goal

Greek philosopher Aristotle^ is said to have believed people andorganisations need telos*… that meaning and purpose adds value to our lives.

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* It’s about carving out a clear and tangible place in the market that translates into meaning and value for stakeholders

* It provides a description of what the organisation exists to do which both employees and customers can link to emotionally and rationally

* Along with the values, it

guides the organisation’s strategies


What is it to have Purposeas part of the strategy?

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* Mission - “Why do we exist?”* ANTIQUATED - Internalised and passive shareholder focused

* Purpose - “What are we here to do?”* Externalised and stakeholder focused value creation

* Values - “What should our behaviour be?”* This complements and is the enabler to the Purpose

* Vision - “What can we be?”* An image of what the organisation could look like in the future

* Goals - “What can we achieve?”* Provides the tangible measures of progress against the Purpose


Purpose, Values, Mission, Vision, Goals

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Strategy in Context

Strategyas aLeadership Tool


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upCFCFE

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nion Conference* Low returns from investments

* Asset underutilisation (savings “excess”)* Fragmenting contact with members* Lack of data on members and the market

* High overheads due to personalised service* Fintech and financial alternatives taking share* High variability across credit unions – tech, service * Difficulty in leveraging economies of scale through ToEs

Dysfunctional business models and organisations?© Dr Jeff Callander 1991-2021 12

Dealing with the uncertainty of Credit Union Trends

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* Vulnerabilities exposed* Unnecessary expenses identified* Shifts in communication channels and Route-to-Market* Inequality revealed - same storm but many different boats* Highly variable demand the new norm – a rebound?

* New consumer & customer segmentation needed* Experience prevails over tangible goods* The potential of can-do capability highlighted* Human centred approaches re-emerging

Don’t waste the opportunities this presents in revisiting your Purpose and reimaging your strategies


Dealing with the uncertainty of Pandemic Trends

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Dealing with the uncertainty of Market Trends

Since 2002, 52% of the Fortune 500 companies are no longer around;

most are now expected to last no more than another 15-20 years.

Disrupt 100 (2017)

“What is not so clear is how credit unions will protect and build upon their unique voluntary, not-

for-profit, member orientation.”O. McCarthy et al., The Financial Co-operative System in Ireland,

Credit Cooperative Institutions in European Countries 2016


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“As thoughts turn to recovery in the economy and in communities across Ireland – now is the time for credit

unions to focus on evolving the business model by using available lending capacity to serve members’

needs on a safe and sound basis.”

“This offers a path to sustainability, which puts members’ savings to aproductive economic use in line with the objects of credit unions, andhelps ensure an ongoing funding need for growth in members’ savings.


Financial Conditions of Credit Unions 2020ema

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A Journal of Management & Organization meta-analysis shows this ranges from 28-90%!

“Management concede that it’s often problematic to achieve the goals that are set out within their business strategies.”

Engagement surveys show less than 40% of staff feel they have clarity about the business direction and their potential contribution.

Despite saying they understand the business’ priorities, research repeatedly shows staff rarely can play these back even partially.

Why is this?

Failures of strategy and strategy implementation


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Uncertainty about Leadership


Strategy is a Leadership Tool

and Strategy equips an organisation to deal with

uncertainty

Is your credit union’s Leadership

using strategy

as a leadership tool?

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The “Story” The TitanicContext It sank …Purpose ???

Analysis Poor design

Actions Change ship structural designs


Why Purpose is what leads to ActionThe Titanic - Actual

It sank…Lives should not be lost at sea

Poor design but also poor regulations, oversight and understanding of impact

Ship structural designs were changed – but ALSO…1. Ice Patrol was established2. SOLAS set up and maritime treaty signed3. Communication was improved4. Radio communication rules agreed5. New rules for pyrotechnics6. Training of close vessel response agreed7. The required number of lifeboats increased8. Lifeboat drills were strictly implemented9. Watertight integrity advanced10. Thermal protection apparatus

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The “Story” Credit UnionsContext Sustainability challengedPurpose ???

Analysis Low returnsLoss of borrowers

Actions

Emulate banking servicesMerge for the sake of mergingChase FintechUse marketing gimmicks


Why Purpose is what leads to ActionCredit Unions - Potential

Sustainability challengedMembers’ Financial WellbeingLack of engagement and understanding of members and their financial wellbeingEngage and with membersEngage with non-membersEngage with staffEngage with communityEngage with educationEngage with businessSeek member led IT solutions

thenRe-establish the CU’s PurposeRebuild the Business Model

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Is Strategic Leadership limiting the success of your business?

Lighthouse


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Leadership is: “…the art of getting someone else to do something

that you want done because he wants to do it.”

Dwight D. Eisenhower Annual Conference of the Society for Personnel Administration, 5/12/54


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“There is an urgency for leaders to define and convey theirorganizational Purpose and vision more clearly - and rally employeesaround it. Employees have little belief in their company's leadership.”

Few employees strongly agree:* only 22%… say their leadership have a clear direction for the

organization* only 15%… say their leadership makes them enthusiastic about the

future* only 13%… say their leadership communicate effectively


Gallup Poll

State of the Workplace 2018 (USA)

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Typical Quotes from Research

* I would like my goals to make a contribution to the company’s goals just as I would like the company goals to contribute to my goals.

* Where is my part in the value chain… where is the value chain?

* Purpose and strategy should aid and direct decision making… why don’t ours?


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Misguided Purpose


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* Steers the overall strategic mindset of the company* Provides directional unity within the organisation* Creates a sense of belonging, a part of a greater whole* Enables referenced decision making and fixes boundaries

* Stimulates positive contribution, pride and presence* Serves as the standard evaluate personal performance* Becomes part of the culture, naturalised throughout* Supports organisational wellbeing

Generates VALUE© Dr Jeff Callander 1991-2021 26

What is it to have an effective Purposecommunicated within the organisation?

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Engagement

Engagement remains low -Globally 63%^Europe 58%^

UK 48%*

Employees are looking to senior leaders to point the way and make decisions for the future.

Less than 40%‡ of the workforce reports knowing their company’s goals, strategies, and tactics…


Key Trends in Employee Engagement 2018 - Best Companies Index (BCI)Leadership

Leadership^AON 2016, *Qualtrics 2017, ‡Bain 2018

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Results: Consistently Profitable

© Dr Jeff Callander 1991-2021

Gallup: State of the American Workplace Report 2013

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CustomerProductivityProfitability

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Key Concepts

StrategyDevelopment


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What is a Business Strategy?


It should provide enough information and guidance for decision-making.

But not so prescriptive that it stifles initiative, agility and creativity.

As a leadership tool, it should facilitateautonomous decision-making

and “line-of-sight” for key stakeholders!

30With permission from Dr Jeff Callander

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TheMarket

The Callander Externalised StrategyDevelopmentWheel


Business

Goals

Objectives &

Responsibilities Resources& P&Ls

Stra

tegi

c Op

tions

Impl

emen

tatio

n

& M

onito

ring

OpportunityAssessment

The WHY*

The How

31With permission from Dr Jeff Callander

*e.g. Simon Sinek’s, Start With Why

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Reimagining Strategy

APurpose DrivenBusinessModel


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The Typical Linear Financial EconomyValue Extraction Business Model


Environment RegulatoryGovernment

InvestmentsStaff /

Premises

Borrowers& Savers

Business

Education

Charities

Community

Banks &Other

FinancialShareholdersInterest

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The Current Members’ Perception Business Model


Charities

Community

RegulatoryGovernment

Staff /Premises

CreditUnion

BorrowersThe ProductInterest

BorrowingMembersThe CU

Environment

Entre-preneurship Education

LocalBusiness

SaversShareholders

Capital

SavingMembers

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The Actual “Members” Business Model


CreditUnion

Staff /Premises

RegulatoryGovernment

Education

Charities

Community

Invest-ments

3rdParty

Borrowers(Business)

Borrowers(AssetBased)

Savers(Shareholder)

Interestless Admin

Costs & Rebate

AdminCosts

Borrowers(The Product)

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What is the Purpose of a credit union?

“As a member owned financial service provider, a credit union exists to enable members to improve their own, their fellow members’ and their community’s financial wellbeing.”

Dr Jeff Callander 2020


Purpose

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Environment

Entre-preneuship

The Circular Financial Economy – Potential Role for the CU


SaversMembers

Borrowers

LocalBusiness

Community

Charities

Education

Valu

esPurpose

Govern-ment?

Regulatory

BigBusiness

Invest-ments

3rdParty

Mem

bers

–“P

artn

ers

for l

ife”

Thro

ugh

thei

r life

sta

ges

of

Savi

ng a

nd B

orro

win

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Do you and your credit union’s staff use the credit union for all your borrowing needs?*

Incidental? – Topup? – Car? – Education? – Agri?Community? – Green? – Holiday? – Credit Card Debt?

Home Improvement? – Mortgage? – Business?


Quick Test of your Business Model and Purpose

*of the available services

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How does Purpose make the difference?


F1 Pit

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You can have the tools but you also need the capability


DO A STRATEGY PITSTOP

TODAY!

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[email protected]


CFCFE Strategy Reimagined Slides - DR Jeff Callander

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