How to Set Goals

Greg Inman, CCUE Senior Vice President

March 26, 2013

Today’s Discussion

• The “HOW” to Setting Goals • Strategy • Execution • WIGS • Leading vs Lagging Indicators • Scoreboards

Credit Union DNA

•SEG Based •Community •Nationwide •Worldwide

Business Development

Building Relationships

The very nature of Business Development

GROWTH

The HOW to Setting Goals

Review Strategic

Plan

14% 37%

Would the competition change what they were doing if they had all of your strategic planning in their hands?

Strategy is Important

But

Execution is the Key

Recommended Reading

• Focus on the Wildly Important

• Acting on Lead Measures

• Keeping a Compelling scoreboard

• Creating a cadence of

accountability

Q’s We Must Answer 1. How do we know if our credit union is

performing well?

2. What metrics should we use to gauge our effectiveness?

Key Ratios

Balance Sheet

• Loan to Share • Net Worth/Assets • Delinquent Loans/Loans

Income Statement

• Net Interest Margin • Non Interest Inc/Income • Operating Exp/Income

Other Key Ratios

• Return on Assets • Members per Employee • Average Loan Balance • Average Share Balance

Top Goals for Many CU’s

• Growing membership/retention • Growing loans • Deepening relationships • Efficiency • Profitability

Effective Goal Setting

• Begin with the end in mind • Establish check points • Track your progress • Create accountability • Monitor and adjust • Celebrate small achievements

Example 1 Grow Loans

– How much? – What type? – Payoffs/pay downs? – Net Charge-offs? – Avg Life of Loan?

(Continued) Additional Questions to Consider

– Average Loan Yield? – Approval to Application Ratio? – Approved to Funded Ratio? – Differences by branch/seg/channel?

Example 2 Grow Membership

– How much? – Demographics? – Retention Rates? – Average Balances/Member

(continued) Additional Questions to Consider:

– Average Loan Balances/Member – Average Fee Income/Member – Cost of funds? – Differences by branch/seg/channel?

Goal Components (What) (How) (Who) (When)

Goal Tactical Steps

Responsible Person

Due Date

Status

SMART Goals

• Written Down

• Compelling

• Challenging

The front line = the bottom line

Align incentives to support your goals

EPS vs MPS

WIGS

• Are Important, not Urgent • Have greatest impact on organization • Bring clarity • Bring engagement

From x to y by __________.

NASA’S Goals in 1958 1. The expansion of human knowledge of phenomena in the atmosphere and space; 2. The improvement of the usefullness, performance, speed, safety, and efficiency of

aeronautical and space vehicles; 3. The development and operation of vehicles capable of carrying instruments, equipment,

supplies, and living organisms through space; 4. The establishment of long-range studies of the potential benefits to be gained from, the

opportunities for and the problems involved in the utilization of aeronautical and space activities for peaceful and scientific purposes;

5. The preservation of the role of the United States as a leader in aeronautical and space science and technology and in the application thereof to the conduct of peaceful activities within and outside the atmosphere;

6. The making available to agencies directly concerned with national defense of discoveries that have military value or significance, and the furnishing by such agencies, to the civilian agency established to direct and control nonmilitary aeronautical and space activities, of information as to discoveries which have value or significance to that agency;

7. Cooperation by the United States with other nations and groups of nations in work done pursuant to this Act and in the peaceful application of the results thereof;

8. The most effective utilization of the scientific and engineering resources of the United States, with close cooperation among all interested agencies of the United States, with close cooperation among all interested agencies of the United States in order to avoid unnecessary duplication of effort, facilities and equipment.

NASA’s Goals as of 1961 “I believe that this nation should commit

itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.”

-John F. Kennedy

“I’m as proud of what we don’t do as I am of what we do” Steve Jobs

“In the long run, men hit only what they aim at.” - Henry David Thoreau

Common Pitfalls

• Setting too many goals • Not aligning goals with strategic plan • Lack of clarity/direction from Mgmt • Not communicating to staff • Inconsistent

Leading vs Lagging Indicators

Indicators

LAGGING

• Measures the goal • Describes what

has already happened

LEADING

• Measures the action

• Predictive • Influenceable

To Improve Leading Indicators/Behaviors

Requires

COACHING

Scoreboards

To Be Effective:

• Must be a player’s scoreboard • Updated regularly • Easy to see if winning or losing • Details limited to what’s most important

By celebrating

success, we create

a culture of success.

100/0

What Have We Covered?

• The “HOW” to Setting Goals • Strategy • Execution • WIGS • Leading vs Lagging Indicators • Scoreboards