Collaboration as a Business Template

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Collaboration as a Business Template

• Collaboration Workshop
• CUAnswers CEO Strategies Week
• December 8-12, 2008

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A Tale of 3 Credit Unions Collaborating

• 3 credit union CEOs get together to talk about
  how they can collaborate on serving their
  members, collaborate to serve each other, or
  potentially even merge
• They decide to build a network and think about
  how the network might act
• Direct Services
• Funded directly by each CU to serve their own
  members
• Shared Services
• Serving members through co-funded resources
• Managed Services
• Services provided by one CU for the another CU
• Merged Services
• Consolidation or formal power exchange where the
  surviving organization now is the responsible
  party to both sets of members

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CEOs in a Networked World

• The key for growth today is understanding how to
  build a network that crafts all four of these
  ideas across multiple enterprises with the
  recognition of politics, marketing style, and
  with a real sense of the power of aggregation and
  network effects
• If I were a credit union CEO I would want to have
  dozens of these in play at once, across as many
  organizations as possible

Strategy Internal (Standalone) External (Network)
Retail Growth Direct member banking, direct service origination Direct member banking, network service origination
Shared Services Growth Create direct revenue from selling excess internal capabilities to the network Create bottom-line savings through purchasing excess capabilities from the network
Corporate Services Growth Consolidate market share growth through acquisition and marketplace expansion Consolidate market share influence through collaboration and marketplace expansion
Are you trying to grow in as many ways as
possible?
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CEOs in a Networked World

• The key for growth today is understanding how to
  build a network that crafts all four of these
  ideas across multiple enterprises with the
  recognition of politics, marketing style, and
  with a real sense of the power of aggregation and
  network effects
• If I were a credit union CEO I would want to have
  dozens of these in play at once, across as many
  organizations as possible

Strategy Internal (Standalone) External (Network)
Retail Growth Run your credit union with your direct services Offer more to your members through partners
Shared Services Growth Start a business to sell your excess capabilities to fund your internal competency Buy core competency at a lower cost from a network partner
Corporate Services Growth Grow through merger Grow through network effects and influence
Are you trying to grow in as many ways as
possible?
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A Big Goal
From the perspective of a credit union
owner What if we could value our independence,
nurture our specific member bases, enrich both
our members and our independent staffs, while
defining a network of a million members,
performing unlike anything we see today? What
if we were known as the ultimate peer-to-peer
credit union opportunity?
An excerpt from the CUAnswers 2008 Business
Plan... a mission for the next 10 years
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Are we architects of our own future, or simply
nurturers of existing models?

• How far down into the stack will you cooperate?
• Sharing a marketplace?
• Presenting like products and services?
• Sharing resources (branches)?
• Sharing team members?
• Coordinating multiple Boards?
• Doing business with multiple memberships?

Marketplace
Products and Services
Resources
Teams
Senior Team
CEO
Board of Directors
Membership
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Stress Tests

• Throughout todays session we will push each
  other to identify network effects and to develop
  ideas that will allow us to declare examples of
  how we act as a network Stress Tests
• The goal is to measure our activities
• Track to attack
• In 2009 CUAnswers will lead the effort to
  identify and track cross-enterprise activities
  within our network. In other words, how many
  places do credit unions do things together? How
  many standing contractual relationships do we
  have that are credit union to credit union? Are
  there any businesses that have been built credit
  union to credit union within our network? How
  often do we interact?

CUAnswers University and this very session could
be counted as a cross-enterprise network event
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Strategic Aggregation Designs

• How can credit unions aggregate for success?

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Improving On Standalone Concepts

• Organizations who network their capabilities can
  gain a competitive advantage
• They need a network with 3 key components
• A technical highway that coordinates
  transactions and interactions
• Organized and rich content that is accessible and
  actionable by all
• Sufficient aggregation to create a formidable
  market presence
• It all starts with the idea that a business will
  leverage its commonalities with partners for
  everyones advantage

Its simple be more, do more, and appear larger
than you could as a standalone player
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Peer-to-Peer BusinessesWho is we?
What is the opportunity, and where is it focused?
A Hub
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Peer-to-Peer BusinessesWho is we?
What is the opportunity, and where is it focused?
A Network
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Peer-to-Peer BusinessesWho is we?
What is the opportunity, and where is it focused?
A Network
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Peer-to-Peer BusinessesWho is we?

• Which is bigger? The opportunity of one, or the
  opportunity of all?
• A network multiplies the work of one into an
  opportunity for all of its participants

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You Know You Have Arrived...

• Ultimately, this network business design works
  when the environment (ecosystem) creates the
  belief in the minds of its participants that
  their very participation in the network gives
  them a competitive advantage by
• Helping them harvest the benefits of scale that
  were previously beyond their reach
• Surrounding them with accessible innovation that
  is easily actioned at a lower cost
• Magnifying their opportunities and creating the
  potential for positive (though unspecified) new
  directions

Simply put the business designer believes this
is the place to be...this is my connection to the
crowd that will take me to the next level
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Stress Test 1

• Can you name 3 competitive advantages you have
  gained through network participation?
• Where you have harvested the benefits of
  cooperative scale?
• Where you have been surrounded with accessible
  innovation that is easily actioned at a lower
  cost?
• Where your opportunities have been magnified with
  the potential for positive new directions?

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Creating a Technical Highway

• Adding a New Connection in 2009 Networked
  Intranets
• A new business opportunity, a new network
  opportunity, a potential new business for your
  credit union

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Technical HighwayCreating community architecture
for major thoroughfares
Internet Its Me 247 Web Services Retailer
Direct MicroLender
Core Processing CUBASE GOLD
Intranet Private Workgroup CU Tools
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Technical HighwayCreating community architecture
for major thoroughfares
Internet Servicing Your Members
Core Processing Servicing Your Members Through
Your Staff
Intranet Servicing Your Staff Corporate
Digital Intelligence
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Community ArchitectureA Ready-made Place To Be

• It all started with developing an ASP online core
  processing solution for credit unions
• The first shared solution where we developed a
  standing capability to combine CUs for shared
  businesses was Xtend

Core Processing Servicing Your Members Through
Your Staff
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Community ArchitectureA Ready-made Place To Be

• Preparing for an explosion of shared businesses
  offered by cuasterisk.com and credit unions alike

Core Processing Servicing Your Members Through
Your Staff
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A New Network IntelligenceCommunity architecture
could be orange, blue, or red
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The Power of a PortalA standalone technical
solution for every business
Intranet Servicing Your Staff Corporate
Digital Intelligence
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The Power of a CommunityA new community
architecture
Intranet Servicing Your Staff Corporate
Digital Intelligence
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The Power of a CommunityA new community
architecture
Intranet Servicing Your Staff Corporate
Digital Intelligence
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New Passageways Plan
December/January CUAnswers to convert its
portal to P4
January 2009 CUAnswers to capitalize on P4
graphic template capabilities
January/February Convert cuasterisk.com
partners to Community Portal concept
March 26, 2009 As part of the CUTalent CEO/
Chairperson meeting, unveil the new Community
Portal concept and sign up credit unions for
CUAnswers- delivered intranet services
This is a work in progress...if you need to move
now, and have the funds and the staff to do so,
we encourage you to talk to Passageways and get
started (Just remember that we told you were
going to do some big things in the future!)
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Organized and Rich Content

• Leveraging Talent
• CUTalent Evolving on social aggregation as a
  business strategy for getting the most out of
  human resources

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Rethinking Human Resources at the Organizational
Level

• How many people work for you?
• What has changed that might influence how a CEO
  in 1989 would answer that question, compared to a
  CEO in 2009? Networks and the mindset of
  employees who know how to use them
• How do you see the talents available to your
  organization?
• What has changed that might influence how a CEO
  in 1989 would answer that question, compared to a
  CEO in 2009? Networks and the mindset of
  employees who know how to use them
• So have networks and the mindset related to using
  networks for access to talent and people changed
  the way your organization thinks about human
  resources strategies and tactics?

Think about your personal contacts...they might
add up to more talent than a large company in 1989
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Rethinking Human Resources at a Personal Level

• How will tomorrows employee react to classic
  career challenges?
• They will bring their network to work with them
  every day
• When the boss asks them to find a new solution to
  a constant challenge...they will use their
  network
• When they need an edge to get that next
  promotion...they will use their network
• When they need a new opportunity...they will use
  their network
• So when employees bring their network to work and
  truly understand the advantages they have at
  being adept in using networks, will your business
  plan leverage this new perspective?

How do you make 25 employees look like 2,500
vested contributors to your business plan?
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Rethinking Human Resources

• Imagine the revolution in trying to get
  organizations with top-down control thinking to
  embrace social network concepts
• Open environment with little governance
• Easy, quick communications
• Rich user identities (personalization, vanity,
  etc.)
• Reputation/ranking mechanisms
• Cliques
• New social network metrics (betweenness,
  closeness, centrality, clustering coefficient,
  etc.)
• How can we translate these ideas into winning
  business models?

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CUTalent

• At CUAnswers, we are anticipating using our
  business network design to enhance both our
  participating organizations and their employees
  situations by leveraging a new mindset about HR
  and the collective talents of a network
• Goals for CUTalent
• Connecting people
• Creating opportunity
• Sharing knowledge
• Source of intellectual capital
• Collaboration, collective exchange of ideas
• Alternative resource allocation
• Individualized career development
• Potential for reduced people expenses

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CUTalentTransitioning Leadership

• What could be more important than understanding
  how network thinking might reshape the way credit
  unions think about their leadership resources?
• What can we learn from working together?

We hope you will join us on Thursday, March 26,
2009, from 1000 a.m. to 230 p.m. at the
Centennial Country Club in Grand Rapids,
MI Register online today!
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CUTalentAn Ecosystem of Interaction

• We need to design a network that can capture the
  power of talentno matter where it is in our
  networkto innovate, execute, and earn beyond
  anything weve ever seen
• Build an expectation of leveraging both employees
  and their peers and contacts
• Our Passageways partnership gives us the
  potential to design a unique environment for
  credit union professionals that will be
  compelling, contagious, and a place where they
  will want to do business

We plan to leverage the power of a single
Intranet against the Intranets of a hundred
organizations and let 3,000 employees be visible
to each other
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CUTalent Network
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CUTalent Network
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CUTalent Network
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CUTalent Network

• Ideally, the community servers create an
  environment where employees inside a credit union
  are partnered with employees anywhere in the
  network
• The community server represents a common
  environment, set of tools, and business concept
  that facilitate a shared activity a ready-made
  ecosystem to facilitate a new shared business
• It will start with CUAnswers at the center of
  new business initiatives
• It will come to fruition when any participant
  feels empowered to go into business or sell their
  talents throughout the network

Is your business ready to extend services to your
peers? Are you digitally defined, connected, and
ready to bring on your first client?
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CUTalent Network
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You Know You Have Arrived...

• Ultimately, this network business design works
  when the environment (ecosystem) creates the
  belief in the minds of its participants that
  their very participation in the network gives
  them a competitive advantage by
• Helping them harvest the benefits of scale that
  were previously beyond their reach
• Surrounding them with accessible innovation that
  is easily actioned at a lower cost
• Magnifying their opportunities and creating the
  potential for positive (though unspecified) new
  directions

Simply put employees and leaders believe this is
the place to be...this is their connection to the
crowd that will take them to the next level
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Stress Test 2

• Can you identify 1-3 areas where you have
  expertise, excess capacity, and the wherewithal
  to sell talent to your peers?
• Have you documented your processes well enough to
  create a statement of work and a contract
  warranting your services?
• Do you know the difference between good enough
  for who its for and the liability of doing
  things for others?
• As a group, can we identify 10 potential
  businesses that we might start based on the
  talents and resources of our network?

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Potential Templates for These Businesses

• Playbooks that you might borrow or copy to start
  a business tomorrow using the talents within your
  organization

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Our network is ready to be the foundation for the
network that all of you may build More
importantly, were excited about your starting to
build in a new direction and finding out what
that will mean for our network
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A Place to BeSometimes the Customer, Sometimes
the Vendor

• One of the most important principles in building
  shared businesses within our network is that we
  avoid duplicating services and capabilities that
  already exist (think about credit card servicing
  or our real estate servicing)
• Therefore, should we always find ourselves adding
  more at the hub (CUSO) instead of drawing from
  the nodes (participating CUs), we may not find
  the best economic model for increasing the net
  return to all of the network participants
• When should you pick up the ball and run with a
  game plan to provide services to the network?

A place to be may be based on our network
creating a marketplace of value exchanged instead
of a simple vendor-customer experience
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cuasterisk.com The eBay Network for Credit
Unions

• If we can create an environment where CUs can
  exchange value without an expensive middleman
  layer, can we achieve an eBay effect?
• Lets consider an automated shared lending
  capability within CUBASE and the cuasterisk.com
  network

What if you could pick partners to share lending
opportunities, and those applications could
seamlessly interact with your CUBASE loan
origination system today?
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Configure your loan opportunity partners and use
this dashboard as command central for identifying
new opportunities
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Drill down on the opportunity to decide whether
this fits into your participation portfolio and
whether you wish to buy in
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Check out the loan officer worksheet and see if
the underwriting big picture makes this a viable
opportunity
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With the click of a button, pull the actual
application in for the in-depth analysis and
member information you need to close the deal
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cuasterisk.com The eBay Network for Credit
Unions

• Well be holding an envisioning meeting on how we
  can build a cuasterisk.com shared lending network
  capability
• Targeted for April/May 2009...watch your email
  for an invitation
• At the meeting well present a more in-depth
  process flow, some sample participation policies
  and procedures, and a business plan for moving
  forward

What other processes could be automated and
workflowed into our current network capabilities
that would allow for elective auctioning and
partner selection to enhance everyones business
plans? What else should we eBay out?
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Stress Test 3

• What else should we eBay out?
• Can we list 5 processes that might fit with the
  shared lending network approach, within CUBASE?
  
• Can we list 5 processes that might fit with the
  shared lending network approach, within Its Me
  247 online banking?
• Can we list 5 processes that might fit with the
  shared lending network approach, within a website
  approach?
• Can we list 5 processes that might fit with the
  shared lending network approach, within a
  networked Intranet approach?

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Conclusion

• As a collective, we have a great opportunity to
  leverage all that is available...if we elect to
  be creative an innovative about how we offer each
  other our services and resources
• We simply have to believe that patronage is
  investment, and that the yield on working
  together is driven by doing more as a network
  than we could as standalone entities
• This is true not only for credit unions but also
  for the CUSOs that make up cuasterisk.com...all
  of our resources need to be on the table and
  ready for constant evolution