Credit Union Management magazine’s Web-only “Good Governance” column runs the first Wednesday of each month.

“Without the research involved in bottom-up planning, it is impossible to truly understand our value proposition or to get meaningful results.” ~Steve Jobs, Apple

High-performing organizations use practical and measurable bottom-up planning processes for the benefit of their stakeholders, John Oliver told attendees of the inaugural CUES Director Strategy Seminar in January 2011.

Starting to develop a strategic plan with information from the bottom of an organization up means starting with intensive market and internal research—research that can take up to three months to complete, said Oliver, president of Laurel Management Systems, Palm Springs, Calif.

“This is where you’re asking members the questions: Do you think of yourself as a member or as an owner? Would you please define your ideal financial institution on price, service, location and delivery channels?”

Then the research comes back to the employees, from whom a credit union needs to get details and sentences, not simple answers.

The biggest question to ask of the employee is “Do you feel a part of this organization or do you show up in the morning just to do a job? Oliver said. “The answer to that question will show a bias in every other question they answer. It’s deeper than the average employee survey.

“If you want a successful strategy, it will absolutely demand an engaged workforce,” Oliver emphasized. “They need to understand their role in it and how they can help make the strategy successful.”

Next research should be done about management’s perspectives and a SWOT analysis should be part of the effort to digest the information collected.

Oliver likes to focus on the opportunities portion of a strengths-weaknesses-opportunities-threats discussion. The question becomes “what are the biggest opportunities that this research program has demonstrated and how are we going to take them and make a good business program for our credit union?”

Another part of the process should be a business process audit. Ask: Are there things our competitors are doing well?

“By the time this gets to the board, you can come up with strategic decisions that are more likely to have an impact on the bottom line, in the marketplace, with your members,” than if you approach strategic planning from the top down, Oliver said.

What scares people away from approaching strategic planning in this way? Oliver offered that it’s lots of work, and that it’s going to show the good, the bad and the ugly about the institution.

“Strong leaders are prepared to undertake the hard work that goes into effective planning and they recognize the need for quality research that will enable them to make strong strategic decisions,” Oliver said.

Lisa Hochgraf is a CUES editor.