I know we all have had a rubber band ball on our desk, at one time or another. I have one, and I have been building it for some years now. I must say, it is getting big! All of the rubber bands that come across my desk immediately gets commandeered; enlisted to become part of the next layer. However, rarely do I ever go back to the ball when I need a rubber band. I never want to use the rubber bands because it seems as though I am undoing part of a process that I have started; going toward some finality, or completion regardless of the need or reason. Yet the ball just gets larger and larger!
Let's take a look at the rubber band ball's construction: typically, it is a series of rubber bands, collected over time, that form the shell. Each rubber band contributing its part to a particular layer; layer after layer the ball gets bigger! At the center of the ball there usually is some form of solid mass. When I started my ball, I used a small solid rubber ball, the size of a good aggie (shooter marble). I think it was retrieved from a child that wanted to make it part of unauthorized snack. So, we have the solid core and the layers of independent rubber bands--a simple concept. Now the layers of the ball, unlike the layers of an onion, are thin and singular--requiring several rubber bands to complete one layer. Whereas the onion forms a single, solid layer at a time, completely encompassing its core. Now, this is not the "onion effect" so I will get back on task here. We will save the onion effect for a potential follow-on blog post.
What makes all of this relevant? Let's start by comparing the rubber band ball effect to businesses. This can be almost any business, just fill in the blank. However, I am going to use the credit union industry, as this is where my focus is and will remain. We started out simply to provide thrift for the employees of a given company, or industry. Our beginning was modest, under managed and mostly with only the basic of industry knowledge, our operation was simple. We provided the basic financial services to members that only desired the basic financial services. Our members wanted a safe place to save their money at a fair rate and get the basic services at little, or no charge.
This was the core of our beginning, our aggie; the solid mass that all would be built upon. Over time we would add more products, more services and we would move with caution when the industry recommended fees and charges for those product and services. We added band after band, creating a layer at a time. We run our credit union conservatively, payed special attention to our members and refused to go with the latest fad, or phase in the industry. Moreover, some of us were quite content across the street from our, single, small employee group; some of us even operated on the property of our employee group so that we would be convenient to our members and avoid building expenses. Layer after layer, we progressed; we served tirelessly and with a passion that was known by no other. This solidified the core, and we effectively added layers around that core, our members appreciated our effort, but would need more.
This was the beginning of the end for many; those that either could not, or would not attempt to change with the times found there was little hope for the future. They had not reacted when they should have, they failed to see what was coming. They tried to add additional layers whereas they should have removed some of the old layers and developed some new ones. Those of us that survived, did just that, by properly reacting and changing our operations to match that of the competition. New, bigger and better facilities, additional employee groups; some even sought to become community credit unions. We were on the way! We added the latest technology, cutting edge products and services. We built branches, both physical and virtual; we added remote account setup, remote deposits and the like. We set standards that would endure future attacks from our competition; we had our place in the financial industry, our roots were deep and strong. Layer after layer, we added to the aggie. However, we failed miserably at one key thing; we didn't see that our member base was aging. Furthermore, we failed in not seeing the younger members joining as they once did.
Just as the industry met with reality before, so are we now. We have built massive operations, we have scattered into all of the land, but we have failed in member growth, market share and enlisting young members. For the past several years the industry began to embrace the youth, first by "just" saying that we needed to do something about it. When reality said that talking about it was not enough, we pursued other measures. From our beginning until now I said we were adding rubber bands, forming layer upon layer and it appears that we are trying to alleviate this problem by adding more. Conversely, we need to remove some of the past layers, effectively removing some of the cluttered operational thinking; processes that were developed long ago in a bygone era. Without removing, at least, some of the layers we are not removing the mindset that was developed in another time for another purpose. Likewise, we will be adding to a process that is entwined with past habits, skill sets and knowledge base. This is the time that we need to adjust our thinking at the ball's core, instead of trying to add new rubber bands to an old rubber band ball.
Until next time,
~Tim
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