Use Your Re-Imagination

What’s old is new again for credit unions that repurpose great ideas for different circumstances.

There are two types of people in the world, according to an old axiom: those who have ideas and those who don’t. Ideas are valuable; people who don’t have them want them. But some of the best ideas are actually repurposed inspiration. As Pablo Picasso once said, Good artists copy, but great artists steal.

Businesses are built on ideas; just not necessarily new ones. Often, businesses repurpose existing concepts to fit a different market segment or otherwise improve upon it. Disney’s movie The Lion King, for example, does both. This tale about the rightful heir to a kingdom taking on an evil usurper virtually repackages Shakespeare’s Hamlet for kids, setting the story in the jungle instead of Denmark. And that adaption of Shakespeare’s idea was so great Broadway turned it into a successful stage show.

This strategy of repurposing another’s idea is especially important for credit unions operating within a cooperative system. If a solution to a problem already exists somewhere, then all an institution needs to do is find it and adapt it which, as easy as it might sound, is no easy feat.

Sturgeon’s Law

We live in a world where ideas are constantly presented and then refined. The September 2013 issue of Wired magazine offers a startling statistic in an article by Clive Thompson, Thinking Out Loud: How Successful Networks Nurture Good Ideas. Thompson reports that human beings compose some two trillion words every day on email and social media the equivalent of 520 million books. By comparison, the entire Library of Congress holds approximately 23 million books representing centuries of work.

American Science Fiction author Theodore Sturgeon observed that 90% of everything is garbage. Of the 520 million books worth of words and ideas we produce daily, 468 million of them probably aren’t worth their weight in ink. In the context of business, that means most new ideas are unrealistic and unwise. With those kinds of odds, an institution might find better success betting on a proven idea it has adapted to local market conditions.

That of course raises another question: How can a credit union determine if an idea has merit?

The Proof Is In The Application

In the 1890s, Ernest Duchesne, a 23-year-old student at a French military school, found himself studying the habits of stable boys. After a ride, the stable boys would store the saddles in a damp, dark room. When Duchesne asked why they did this, the boys said it helped alleviate the saddle sores that developed on the backs of their horses. Why? The dank conditions encouraged mold to grow on the saddles, which in turn helped heal the sores. Intrigued by this connection, Duchesne experimented further and eventually invented a crude, early form of penicillin. He presented his ideas to several French medical institutions, which dismissed the young, unknown physician. He died just short of his 38th birthday from tuberculosis, an infection now treatable with antibiotics. In 1928, more than 30 years after Duchesne’s work, Scottish scientist Alexander Fleming made a similar discovery, independent of Duchesne’s research. The United States massed produced his form of penicillin after Pearl Harbor, and his work earned him the Nobel Prize for Medicine in 1945.

Both men came up with the same idea, that mold combatted infection, but only one succeeded. Why? Because an idea’s success hinges on its application, and in Fleming’s day, that application was a new treatment for soldiers with infected wounds.

The potential for applications is how credit unions, or any institution for that matter, can determine whether an idea has merit. The more applications an idea offers, the more likely it is to prove useful.

An Old Idea Evolves

Credit unions aren’t called cooperatives for nothing. This is an industry that fosters networking possibilities, so the opportunities to borrow ideas are endless.

Refinancing campaigns, for example, help borrowers save thousands of dollars in interest they’d be paying if they stayed in a high-rate loan. Credit unions have been using variations of this idea for years. Some have official, catchy Sit-and-Save-like names, others just encourage members to bring in their debt obligations to see if the credit union can save them money. The golden nugget of the refinancing push is the focus on how much money the credit union can save its members, not on how many loans it can originate or refinance. This simple re-framing of a long-existing practice recapturing loans is what makes the idea so powerful for credit unions. Employees are no longer selling a loan, they are saving a member money; but the end result is the same a loan for the credit union’s balance sheet.

Educators Credit Union($1.5B, Racine, WI) began its Fast Lane Financing campaign as a way to recapture auto loans and expanded the program to include products such as mortgages and credit cards. Seven Seventeen Credit Union ($830.5M, Warren, OH) offered its own version of the program Simplify Save independently of Educators to help a community struggling with layoffs as a result of the recession.

Over time, both programs evolved into financial education efforts that the credit unions implemented differently. Seven Seventeen, for instance, hosts seminars and operates a microsite on refinancing, tying it into a program called Balance Financial Fitness, whereby members can speak with a trained financial counselor through a toll-free number. That counselor will help members take control of their finances, whether it’s teaching them about credit reports or establishing a debt management plan.

Educators also had the idea to turn its refinancing program into one about financial education, but did so by adopting a more consultative approach. Through an arrangement with a credit bureau, the cooperative pulls soft credit reports that provides just the opening the credit union needs to discuss ways a member can improve a credit score. Both credit unions have also counseled other cooperatives looking to establish a similar program.

Credit unions across the country have further adapted this concept by adding the element of competition either among branches of the same institution or between institutions in different markets.

Credit unions have passed around and reimagined other ideas, too, like youth savings accounts and loyalty rewards programs. Being able to develop new ideas through a network of peers is not unlike an incubator that allows participants to workshop products and services to see which ideas work well and which do not.

The Value Of Networks

So where can a credit find different ideas to nurture and make its own? Well, just about anywhere, but here are two places to start.

First, sharing ideas with your peers at other credit unions in an unfettered environment is a powerful opportunity. To facilitate this exchange, Callahan hosts roundtables across the country for our leadership clients, some of the most progressive and successful credit unions in the industry. These events are driven entirely by participant discussion. We develop an agenda and identify select hot topic ahead of time based on pre-interviews with registrants. Then we stand aside and learn from the natural dialogue that develops among the group’s members.

I’m still surprised during these events at how often a credit union brings up a tried-and-true strategy one that we’ve touted at Callahan that others in the group have never head of. It might be an old idea, but it’s certainly new to many credit unions. And sometimes participants present a new idea they are considering that then takes a life of its own at other credit unions. The ability to share successes and just as importantly, mistakes allows all parties the opportunity to refine and adapt a central theme to the benefit of differing missions and member needs.

Another great place to find ideas is by looking for best practices outside financial services. I fuel my creativity by reading Fast Company and Wired, both monthly magazines with no connection to financial services. I find inspiration both good and bad throughout these and other magazines.

That GEICO local ad campaign? Adapting that idea would be a great way for credit unions to highlight their connection to local businesses. The masthead? Check out how Wired creates a personal connection with employees and readers by highlighting something interesting about them. That Clive Thompson feature on networks? The inspiration for this article!

All this goes to show that it’s okay if new ideas are few and far between because there is still plenty of value in old ones.

August 25, 2014

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