-Free Webinar on Strategic Benchmarking-
I recently wrote an article called Benchmarking: Why to Do It and How to Do It Well. In the beginning of the article I joked that one value of benchmarking is that it allows you to show your board how great you are. While I included this phrase to provide some humor, there was truth in my jest.
Benchmarking, more importantly strategic benchmarking, will provide you and your board with information that puts your credit union’s performance into context. Without context it is not only very difficult for you decide how to lead your credit union going forward, but it also clouds your board’s view of the job that you are already doing.
Let’s use a hypothetical example to illustrate my point.
You are the CEO of Widget Credit Union (Sweetwater County, WY) with just over $20 million in assets. A year ago your board directed you to focus on growing share balances. Over the last year, Widget CU grew shares by 3.4%, which compared to the national average for credit unions $20-50 million in assets of 7.4%, does not appear all that great. Your performance looks a little bit better against the state average of 6.3% for credit unions $20-50 million in assets. However, when you look at the actual county level, all of a sudden your numbers look very good since the average annual share growth for Sweetwater County was -0.3%.
Without these varying levels of context your performance could be misinterpreted and the credit union could take the wrong path due to inaccurate benchmarking practices. It is important to take into account both the macro and the micro level trends that are relevant to your credit union; the combination of both will lead to a more holistic decision making process.
Sound complicated? It doesn’t have to be. Investing time (and a little money) up front when selecting a peer group can save you time (and a lot of money) down the road. To learn more about peer analysis, sign up for the complimentary webinar Unleash the Power of Data for Better Decision-Making:Strategic Benchmarking.