cu*answers ceo strategies collaboration workshop

Making the““Partnering With YouPartnering With You””

Challenge of 2006 a Reality

Collaboration WorkshopCU*Answers CEO Strategies Week

November 26-30, 2007

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Setting the Stage

We have extra capacityWe wish to serve as many members as possibleWe wish to secure the future of our firms, our staffs, and even ourselvesIn the long term, it might not be enough to go after members one at a timeLarge blocks of members are being traded, sold, abandonedIt’s time to act individually...it’s time to act collaboratively

If you donIf you don’’t believe these statements, if your t believe these statements, if your CUCU’’ss business plan doesnbusiness plan doesn’’t t agree with these statements, then we need to talkagree with these statements, then we need to talk

ItIt’’s all about perspective...do you see yourself as part of a netwos all about perspective...do you see yourself as part of a network?rk?

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Trading PlacesMembers as a Block of Opportunity

1914

39 11 54

-22.2%137Change -1.11%137480617-19.6%197897WI-30.9%54121175OH-22.6%144862MI-21.6%114051IN-16.8%39193232IL% Change# Change20072004

CUs Under 1,000 Members Leaving the Market

4


1627

15 9 30

-13.0%97Change -0.65%97647744-14.8%1692108WI-14.7%30174204OH-18.2%27121148MI

-8.7%994103IN-8.3%15166181IL

% Change# Change20072004

CUs 1,000-5,000 Members Leaving the Market

5


319

2 4 6

-12.5%34Change -0.54%34239273

-7.0%34043WI-8.8%66268OH

-20.0%197695MI-11.8%43034IN

-6.1%23133IL% Change# Change20072004

CUs 5,000-10,000 Members Leaving the Market

6


47

0 0 5

-4.7%16Change -0.23%16324340-9.52%44246WI-7.35%56873OH-6.09%7115122MI0.00%04444IN0.00%05555IL

% Change# Change20072004

CUs 10,000+ Members Leaving the Market

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Our Specialty...Our Market NicheMatching Your Expertise With These Members’ Needs

Our business models relate well to the shift in our industryWe are not going away; we are on the edge of adding more to our ranks, both CUs and their memberships

4267

56 24 95

3110,000+375,000-10,000421,000-5,000

3Under 1,000# of CUs

Total # of CUs Leaving the Market CU*BASE Partners

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www.cuasterisk.comInspiring Centers of Collaboration and Strategies for Growth

If a CUSO could be at the center, be the gravity for collaboratiIf a CUSO could be at the center, be the gravity for collaboration...why on...why couldncouldn’’t your credit union? Does your credit uniont your credit union? Does your credit union’’s business plan s business plan

include collaboration as a growth strategy?include collaboration as a growth strategy?

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If a CUSO could be at the center, be the gravity for collaboratiIf a CUSO could be at the center, be the gravity for collaboration...why on...why couldncouldn’’t your credit union? Does your credit uniont your credit union? Does your credit union’’s business plan s business plan

include collaboration as a growth strategy?include collaboration as a growth strategy?

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Collaboration Is a SolutionCollaboration is a Competitive Edge For Growth

From the 2007 CEO Strategies event to the 2008 Business PlanHunting for innovation also means inspiring others to hunt, gathering an audience of hunters, then responding to their lead...and benefiting from them recognizing both our response and leadership in driving executable solutionsIn other words...Winning at the old game, inspiring a new game, and executing the transition from the past to the present...and making a buck along the way

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On the Road to a New Future2006 CEO Strategies Event

Acquiring Credit Unions– What if CU*Answers could find credit union

opportunities for credit unions?– New Age Strategies

• A new age consolidation strategy• A new age networked business strategy

Growing a Network– We can innovate

Marketing Your Intentions to the Industry– Prototype credit union brochure

The Scholarship Program

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Acquiring Credit UnionsInspiring Opportunities

What if CU*Answers could find (inspire) credit union opportunities for credit unions?

National events such as Filene, CURTS, NACUSO...anywhere that

will listen

• Selling the idea to the credit union marketplace

Major investment in multi-corpsoftware development with 2 active

partners in 2007

• Tools for collaborative strategiesMulti-corp, SRS templates, and other misc. shared business models

$4,000 waived member fees per month in 2007

• Financial support for credit union collaborations

Waiving member fees for one year for new membership blocks

Putting Our $$ Where Our Mouth Is

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39,132 1992,572 15126,8401669,61912NET TOTALS(81,989)4(1,906)1Deconversions

94,578 1187,138 11115,0181150,5686Conversions(1,228)1Migrations to CU*NW

20,271 15,966 1Migrations to online1,816 16,095415,7505Outside mergers4,456 22,602 15,72713,3011CU*BASE to CU*BASE mergers

MembersCountMembersCountMembersCountMembersCount2007200620052004FISCAL YEAR

Whether itWhether it’’s the CUSO bringing in new partners, or s the CUSO bringing in new partners, or credit unions bringing in new partners, our credit unions bringing in new partners, our

collaboration and our individual business plans are collaboration and our individual business plans are linked to network growthlinked to network growth

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39,132 1992,572 15126,8401669,61912NET TOTALS(81,989)4(1,906)1Deconversions

94,578 1187,138 11115,0181150,5686Conversions(1,228)1Migrations to CU*NW

20,271 15,966 1Migrations to online1,816 16,095415,7505Outside mergers4,456 22,602 15,72713,3011CU*BASE to CU*BASE mergers

MembersCountMembersCountMembersCountMembersCount2007200620052004FISCAL YEAR

Whether itWhether it’’s the CUSO bringing in new partners, or s the CUSO bringing in new partners, or credit unions bringing in new partners, our credit unions bringing in new partners, our

collaboration and our individual business plans are collaboration and our individual business plans are linked to network growthlinked to network growth

Beyond that, our network offers aggressive

financial support to de novo credit union efforts

as well

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Acquiring Credit UnionsNew Age Strategies

Direct support for credit unions whose business plan is to grow and better serve their members through strategic partnerships with other credit union charters - A New Age Consolidation StrategyThese are credit unions who want to lead from the driver’s seat and be proactive acquirers of partners

Attract credit unions to the CU*Answers collaborative who see the value in partnering and participating in an operational network - A New Age Networked Business StrategyThese are credit unions who recognize the need to extend their model into the future and want to accomplish that through partnerships

Two stories, two tracks, two ways to get the job doneTwo stories, two tracks, two ways to get the job done

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New Age Consolidation StrategyThe Affinity Group Story

In one year, Affinity Group CU went from $37M to $120M of member assets combined into one networkUses a unique combination of multi-corp and independent CU files to lead the new organizationExpanded the employee team to 58 serving 20,000 members dailyParticipate in 5 different CUSOsAffinity Group CU has aggressive service goals for 2008

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New Age Networked Business StrategyThe Shared Resources and Staff (SRS) Story

These are models of how to build shared businesses for key credit union operational needsThey are available to any of our partners to use directly, one-on-one between the CUSO and their credit unionThey are available for any of our CUSO partners to use to start businesses directly with their owners and clientsThey are available to any credit union with the mindset to start a peer-to-peer business with other credit unionsWe hope they are working templates for collaborative businesses that fuel credit union growth

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New Age Networked Business StrategyThe Shared Resources and Staff (SRS) Story

Can we inspire a new wave of innovative collaboration before it’s too late?Will our leaders seize the power of network business development?Can credit unions use the vendor model as a template for a new network design?

So when you think SRS is just about So when you think SRS is just about CU*Answers and Xtend making money as CU*Answers and Xtend making money as

vendors, you have it all wrong...vendors, you have it all wrong...

It is about inspiring CU leaders with templates It is about inspiring CU leaders with templates that assure them it can be donethat assure them it can be done

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Growing a NetworkDo We Have the Components To Collaborate Efficiently?

To effectively collaborate and service every element of a creditTo effectively collaborate and service every element of a credit union, we union, we need tools that allow us to coordinate the keys to successneed tools that allow us to coordinate the keys to success

Servicing a Corporation

Servicing a Membership

Servicing an Employee

Base

Business policies, procedures,

compliance, strategies, leadership...

Communicating and creating value with

credit union consumers

Nurturing credit union advocates and

building the careers of our employees

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Growing a NetworkDo We Have the Intent to Drive Opportunity Through Collaboration?

Point to Point

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Point to Point

What is the opportunity, and

where is it focused?

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A Hub

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A Hub



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A Network

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A Network



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Which is bigger? The opportunity of one, or the opportunity of all?A network multiplies the work of one into an opportunity for all of its participants

So as leaders and builders of businesses, can we turn away from So as leaders and builders of businesses, can we turn away from a model that a model that magnifies the opportunity for every one of us?magnifies the opportunity for every one of us?

We need to build, buy, trade, and find opportunity as a collaborWe need to build, buy, trade, and find opportunity as a collaborativeative

Acting On Our Beliefs

“Okay, I see the light. I’m going to link together all these membership bases and build an organization, or I’m going to change my organization so it can be part of a network of credit union membership basis.

So how do I merge?”

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It’s Not a One Trick PonyNetwork Strategies Allow Many Opportunities for Collaboration

It’s not surprising that CUs always seem to assume that collaboration equals mergerEverywhere you look, merger consultants are popping up and people with M&A skills are seeing CUs as a potential audienceTwo schools of thought for all of us:– Anti-merger: How can we show that collaboration doesn’t mean

consolidation?– Effective mergers: How can we create a process that allows us

to earn from consolidation?

The trick for CU*Answers and this network is to create The trick for CU*Answers and this network is to create an environment where individuals with totally opposite an environment where individuals with totally opposite

points of view coexist and succeed togetherpoints of view coexist and succeed together

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Marketing Your IntentionsTo Compete, You Need a Clear Competitive Advantage

Have you hung out your shingle?Do you have a message that might be seen as a better way?Are you building processes and strategies to be successful at collaboration?Can you communicate your skills?Can you negotiate diversity?Can you inspire collaboration?Can you win the next opportunity?

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Hanging Out Our Collaborative’s ShingleOur Partnership’s Strategy for Collaborative Growth

A Turnaround Program– An investment in the continued success of credit unions, one

charter at a time– An investment in building futures with new network partners– An investment in securing an opportunity for one of our network

partners based on a worse-case scenario– Banking on our peers– Banking on members– Banking on our philosophy

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Scholarship Program

How many candidates should we consider each year?What are the criteria for selecting worthy candidates?Investment maximums?Should we get sponsors from our owners only? Contract terms?How should we market?Which states?

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Conclusion

At the core of everything is one simple belief: When people collectively work on the goals and aspirations of their partners more than their own, good things happenCU*Answers is about the business plans of credit unions; credit unions are about the dreams and hopes of membersA cascading collaboration to simply improve the situation of people, one person at a timeHow can we lose?