The Growth Imperative
A report from Deloitte Canada on credit unions
A source of continued debate among financial cooperatives is the role, if any, that growth and profit should play in a credit union’s formal strategy. Credit unions differentiate themselves by focusing on the value delivered to their members and communities. However, their capacity to deliver on this value proposition is integrally linked to the credit union having sufficient funds available to do so. While many credit unions forego the drive for quarterly results and dividend payouts espoused by their publicly-traded competitors, the assumption that there is an inherent conflict between maximizing profitability and cooperative values is fundamentally flawed.
Credit unions that fail to adopt an aggressive, sustainable growth-oriented mindset risk losing competitive parity on the products and services they provide to their members and significantly limit the investments they can make in their organizations, members and communities. Rather than being a betrayal of the cooperative system, planning for and achieving sustainable growth is one of the most important activities that a credit union can undertake to maximize member value and live its cooperative principles.
The growth argument in this report from Deloitte Canada is based on three precepts:
1. Growth must be sustainable
2. Growth is necessary to maximize control
3. Growth is necessary to maximize impact