Small and Mid-Size Credit Unions: Don’t Be Afraid to Ask for Help!

Small and mid-size credit unions don’t always have it easy, and that can especially be the case when a surprise comes up. This makes it all the more important for smaller credit unions to have a plan in case anything comes up, from succession planning to strategic planning.

Project management is another area that can be stressful for credit unions that don’t have a plan in place or the right expertise to help ensure everything runs smoothly. Sometimes, what a credit union needs in these situations is a little outside help.

Host and Co-founder of The Credit Union Connection Sarah Snell Cooke sat down once again with the CEO of O2 Consulting Group Bonnie Ortiz to discuss how important strategic planning is for small to mid-size credit unions and how fractional executives can help make the process a little easier. They also talk about achieving operational excellence and how credit unions can take steps to not just survive, but thrive.

Read the full transcript:

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Sarah Cooke 00:03

Welcome to this edition of The Credit Union Connection. I of course, am Sarah Snell Cooke, your host. I'm joined here today by Bonnie Ortiz. You've seen her before. She's the CEO at the CUSO, O2 Consulting Group. Welcome.

Bonnie Ortiz 00:18
Thank you, Sarah. Thanks for having me again.

Sarah Cooke 00:20
Always. Always welcome. So give yourself, even though you've been only here before, I let you give yourself a little introduction of your background, as well as the organizations.

Bonnie Ortiz 00:30

Okay. So, as Sarah said, I am Bonnie Ortiz. I'm the CEO of O2 Consulting Group. We have been in business since 2017, 2018. I have a long history with the credit union as a former Chief Operating Officer at the Partnership Federal Credit Union, touched bases on all kinds of different topics across the credit union, everything from business development and marketing to operations. But operations is my passion, and so when I started the business in late 2017 it was all about operations and operational excellence.

Sarah Cooke 01:07

Yeah.

Bonnie Ortiz 01:08
We've been going strong ever since and loving life.

Sarah Cooke 01:12

Awesome. Yeah, I love the idea of operational excellence, because that just helps credit unions return the most to their members. So since you started off mentioning that, let's talk about that. One of the things that I've observed, as many people are reconsidering their careers and credit unions are looking toward greater efficiency for that better return to their members, is the rise of rational, fractional executives. And so what are the things that your team has seen, or you have seen in your experience as a fractional executive and offering that service? And because I really see it as a life preserver for smaller credits, but I'm sure there's more to it than that.

Bonnie Ortiz 01:56

I think you're absolutely right, Sarah. I think it is a life preserver, and I think it can be even more than that. From the perspective of being a very supportive partner in not just a short term partner, but even a long term partner after that fractional service is no longer needed. So as you know, O2 Consulting Group really targets small and mid-sized credit unions, and those credit unions are those that I feel need this even more than the very large ones, everything from strategic planning that also includes succession planning, which, as you know, often takes a back seat to many of the other things that you have to do because you're wearing so many different hats. You know, in a mid-sized credit union, or that matter, for really small ones, so often what I see is CEOs and their boards, their teams, get a little blindsided. You know, despite the fact that we have people that we may love in our more senior and executive positions, folks find other opportunities. You know, in today's remote world, folks are moving around the country, they're moving overseas. They're living life in the way that they want to live it. And opportunities come along all the time. So even when you have a good succession plan in place, it doesn't always mean that you're not going to have a surprise, and it is a fabulous opportunity when you get that surprise, to be able to reach out to an organization that you know has senior expert, experienced individuals in lots of different areas across the credit union that you can select from to bring in and help you to stay afloat while you're looking, perhaps give you even more direction and help to bring about more operational excellence and maturity in your operations, processes, procedures, you know, systems, but also to then pick their brain to help with the interviewing process, the selection process, the networking to find you the right person to fill that seat on a long term basis. You know, fractional executives are not intended to be the long term answer, but they are intended to be able to fit in to the credit union, not just from a skills perspective, but from a competency perspective. Because think about it, you know, if someone calls me up tomorrow and says, Do you have the bandwidth to take on a fractional COO position, the answer could be yes, but we really have to understand what you're looking for. You know, because every credit union has its own culture, and it's very important that that fractional executive be able to fit into that organization and make a difference in a positive way.

Sarah Cooke 04:49

Right, because you're already a short timer, right? To have that respect and the culture piece baked in when you're moving into that kind of position. And I know you guys. Oh, go ahead. Were you're gonna say something?

Bonnie Ortiz 05:03

Oh, I was just gonna say one more thing, and that's that you also need to look at it from an investment standpoint. Think about the fact that if you can get the job done, a Chief Information Officer, for instance, or Chief Technical Officer, for instance, if you can get that job done for a small or mid-sized credit union in three days a week, why would you not want to avail yourself of that? Because that short term relationship may turn into a longer one, not totally long term, but a longer one that allows you to save some dollars, invest wisely, understand what you really need. You know, before you go into the long term investment.

Sarah Cooke 05:43
Mm, hmm. And that's actually even a better, even better segue to what I was going to next. So

I know you all recently signed a credit union to do to help them with their core conversion.

Bonnie Ortiz 05:53 Yes.

Sarah Cooke 05:55

And, you know, I think we've all probably observed that credit unions are reconsidering, re examining their core course just period. Many we know are on decades old technology and just not really meeting the needs of the modern credit union for the modern consumer. So just wondering what you're seeing, what's behind those moves? What are your observations of the trend if it is one?

Bonnie Ortiz 06:24

I do think it's a trend. And I think it's a trend for a couple of reasons. In small and mid-sized credit unions, many of them are still with very old and kind of antiquated technology, and whether they stay with the same vendor, but move up to a different product in their suite of products, or whether they look elsewhere. Folks are really looking for that engine that can drive the kind of business that they want to, to arrive at, you know, and kind of, what I mean by that is we have so many options these days for the core and all of the ancillaries that go along with it. So there's a need to be able to decide, how do I want the business of my credit union to run? Do I want an all inclusive engine, you know, that has the most important parts, you know, online banking and mobile banking and, you know, online account opening and so forth? Or do I want to have an engine that's sort of independent, you know, that I can just plug and play in any way that I want? So I think folks are looking at moving up from an older system that may not have all of the innovations, feature functionalities that they could use now to attract new members and to further engage with the members that they have, or if it's that they just really want to move in a direction that has a certain set of goals and objectives that allow them to, again, it's all about the members, right? Attract new members, engage with your current members, and ensure that you're giving them the best experience no matter what channel they're coming through.

Sarah Cooke 08:11

Right, right. And you kind of alluded to this earlier, but you know, one of the reasons that we even founded The Credit Union Connection is to ensure we can connect business partners with the credit unions that really need their services, because often credit unions don't even, haven't even heard of some of the businesses that really could, and particularly smaller businesses like themselves that really understand what they're going through, to a degree, but especially when you have that credit union background and can, can really provide the, the guidance, like step by step guidance of how to get through something, for example, connecting to a fintech. You know, there's a lot of project management involved, or should be anyway. Where do credit unions stand in their project management maturity, and talk, so just talk a little bit about that, credit unions and project management.

Bonnie Ortiz 09:08

Well, I think there's a wide range of acceptance of project management methodologies and the necessity for them to be inside of your credit union, and I think certainly larger credit unions, 750 million and above, have begun to build project management offices because they've seen the necessity for that, given the number of projects that they're trying to accomplish in a given year, and the complexity of them, especially when there are one or more vendors that are involved in any given project. But with small and mid-sized credit unions, again, it's that notion of, I don't think I can afford this. I don't think I can afford to have a project management office. I don't think I can afford to bring in independent, you know project managers and bring them in as full time components. Well, guess what? You don't have to because with an organization like O2 Consulting Group, we can be your outsource sort of project management as a service. So we can help you to build that project management office, but utilize the services and the people that are in our organization to be able to match up to this specific project that you're trying to accomplish. So I see it beginning to blossom in small and mid sized credit unions.

Sarah Cooke 10:34

That's great. Right, right.

Bonnie Ortiz 10:35

I see them, all of a sudden starting to connect the dots. You know, I may want to build this inside, but I may want to just start with one person. And one person is not going to be enough, you know, to handle, then all of the projects that need to be handled. And the other side of it is, you don't want to be having some projects run with a standard methodology being very successful, you know, in both managing time budget, you know, etc, but then have other projects being managed differently, because you're right back into chaos. So to answer your question very straightforwardly, I think we're getting there. I see more project management folks and disciplines being brought into credit unions across the board, regardless of the size, but we still have a long way to go, and so we like to think of it as an opportunity for us to show the value. Once you get in and can show the value of what the services will do for you, then I think you're hooked.

Sarah Cooke 11:39

As you've mentioned, you generally work with the smaller to mid-sized credit unions, and why do you think that is? And when you're working with some of the larger ones that you work with, how do their needs change? What's different there?

Bonnie Ortiz 11:54

I think, to start with the larger credit unions, I think their needs are more what I'll call plug and play. They may find themselves in a situation where they just have bitten off a tremendous amount in one year, and they may have a stable of project managers that are already busy to the max, and so what they really need from you is that interim service, or if they've just recently started a project management office, they may have very junior individuals that are working their way up to certification and, you know, complete understanding, and so they're looking for validation of what's been done, and just coaching and maybe training of the people that have, eventually will take over as their full time project management folks. In the smaller credit unions, that's not really the case. So we're coming in more as the full service package. So coming in and doing everything from helping them to get their arms around an efficient process for determining every year what projects that they should be undertaking, because we're aligning them to their credit union goals and objectives, and making sure that the process includes rating and ranking of projects based on their alignment to those goals, and then helping them to see how they can adjust throughout the year as new things come on the plate that you're not expecting. So that's one aspect of kind of helping them to get more organized and thoughtful, planful about the projects that they're doing. Then the second phase is, okay, now that we have this, you know, great list and this dashboard of projects and their criticality, how do we get them accomplished? And again, it's a step in and start helping with the more complex projects. Have a lot of vendors, have a long time. Cores take a very long time to get installed and into the post implementation period. So often, we will then step in and we will do the more complex projects. Let the departmental people you know that may want to work themselves into that kind of a position, or at least have the operational knowledge, run the departmental projects and look to us for advice and guidance. So I see that sort of more hybrid, you know, where we're more in as a full service, but then with the opportunity to be able to step away at the right time and just be that advisory arm. Mm hmm.

Sarah Cooke 14:30

Mm hmm. And one of the things you also have talked about in the past is that leadership development piece, or the, the people that you're, as you mentioned, the program, project managers that may bebrand new and training them up. What do you what do you like about that? What do you see as the need in the areas that you cover, as far as like developing those, those professionals?

Bonnie Ortiz 14:55

Well, first of all, I want to say that that is one of the most sastisfying parts of my job. I absolutely love to give back. It's, you know, I've been doing this for a long, long time, and I enjoy it so passionately that it's not like a job to be, you know, helping folks to grow in that capacity. But what I see is often folks are promoted from within, which is a great thing, right? And so they come with the skill sets that they need, organization, detail orientation, the ability to be able to critically think, to solve problems and escalate things quickly. But they really don't have an infrastructure, a, a set of tools and techniques that fit into a standard methodology. So what, what they need is that grooming. You know that maturity. You know that ability to not just make it be home grown, but to build it around really successful methodologies, whether it's the waterfall methodology that the Project Management Institute, you know, leverages, or it's agile, or it's some other methodology that's cropping up, you know, every day, those folks really need to kind of ground themselves in that, make sure that they have a set, they have a toolkit. You know, one of my favorite words, you know, they have a project management toolkit that has a variety of different components that can help them to deliver on small projects, very simple things, and then the more you know, complex ones that are more riddled with risk.

Sarah Cooke 16:37

Mm, hmm, yeah, definitely. And so all the things that we've kind of talked about is at their heart is getting that better return for their member, the credit union member, in terms of you can have increased revenue or better efficiencies, operational excellence, as you said, which is really what business partners can often provide to credit unions, whether it's, you know, a service like yourself, or FinTech or whatever. And these are all very, yes, they're tools, but they're highly strategic discussions to have about how you're going to use those tools. And so how do you work that into when you're doing a strategic planning session with some of your clients?

Bonnie Ortiz 17:19

Well, the way I see strategic planning is it's a balance between the discussions that you need to have about growth, in a reasonable way, to look at your operations as well. So if you think of it as a seesaw, you know part of your conversation should be about growth, both new growth and deeper engagement. But the other part of the conversation is, is your operational infrastructure ready for the growth goals you're setting? And in the minute that you can get to that very balanced conversation, then you can start developing goals, strategies and tactics for the year that everybody can get involved in, and that always then comes down to, okay, if we want to grow by this much and we know that our operational capacity is this much, then how do we really take the projects that we have to accomplish to reach those goals and align them? That gives you the, the footing then to be able to have that conversation about how they can get it all done in a better, more efficient and effective way. But if you go into strategic planning with the idea that this is just going to be about growth, and you're not going, you're going to dismiss any and all of the operational considerations, whether it be people, processes, tools, you know, etc, then it's a more uphill, it's a bigger uphill battle for you after you come out of that session and start, you know, rolling into what you're going to do for the next year. So I typically talk with the CEOs and the board, if they're involved in the planning of the conference, and before we go into the session, we talk about what that's going to look like. So how much time are we going to devote to each of these areas? Are we going to talk about your risk management plan? Are we going to talk about your communication plan? Are we going to talk about the way in which you engage? You know everyone in the operational areas in knowing what their place is, you know, in helping to reach those goals, and all of a sudden that becomes a much better way of being able to get everyone moving in the same direction. And then if they also know that it's coming with developmental tools for them, you know that it's going to help them to really succeed, it becomes, you know, a nice workshop package that can be brought back to the credit union team as a whole.

Sarah Cooke 19:56

For sure. And actually, one of the words you just used risk, reminded me, you know, right now, in the last less than 30 days, The Credit Union Connection has done three breaking news alerts on different credit unions that have gotten themselves into a snap, a little bit of trouble. And so, you know, how do you look, how do you view in that context, looking at these recent announcements, how do you view the value and the efficacy of due diligence?

Bonnie Ortiz 20:34

Oh, wow. Well, we could probably have an entire podcast on that, but I am a huge proponent of looking at vendor selection, solution selection, based on a project methodology. So if, for example, you're selecting a core then the first project that you're running is who you're going to select. So there's a whole phase of that project that it starts with identifying what your goals, business, you know, and technical requirements, are, and then leading you all through that process to the selection itself. Embedded in that has got to be all of the due diligence activities that should follow your vendor management program. But let's say you don't even have one. There should be a very intense checklist of the things that you really want to look at, because invariably, if you don't go through that exercise, when you start implementing, you always are running a much higher risk that you're going to get surprises. There's going to be hidden costs you didn't know about. There may be all kinds of other things that don't match up to what you really were looking for, even from a cultural standpoint. So I am huge on making sure that the due diligence aspects of selection of a vendor and a solution are embedded. And I encourage credit union leadership all the time to have operational people, project managers, if they have them, or they've engaged them, to be a part of that sales process, so that it does become more of an, a kind of intuitive way, you know, of really looking at things from all sides, including the risk side. Then once you're in the implementation of that solution, every project plan that I put together or that my team puts together has a risk management component, so that you are looking back at how you chose and moving forward with understanding what that risk landscape is going to look like for the implementation period and beyond. And that becomes a, it's an absolute necessity in the playbooks that we develop. It's every bit as important as you break down of all the tasks that have to be done.

Sarah Cooke 23:08

Mm, hmm, yeah, yeah, I think that's you're right on. I was shocked to read some of the coverage of what's been going on lately, but yeah, not naming any names at the moment. So, as you know, since you've been a now repeat guest, I always offer my guests the final thoughts to close out the video. So what have you got to say to our credit union audience?

Bonnie Ortiz 23:36

Credit unions are an incredible asset to consumers, and I think we still have not hit that magic trigger of just how valuable we are, and credit unions are shrinking in number. We all know that, and so my passion right now for small and mid-sized credit unions is to help them not only survive but thrive. And so my message to the credit union industry is really look towards all of your options for operational excellence so that you can do just that, not just survive but thrive. And if merger or acquisition is in your future, that's fine, but it can be purposeful, you know, and so we are, the O2 Consulting Group team is here to help in that regard, to be a true partner, to provide, you know, advisory services, and really to as I always say in every material that I put out, we roll up our sleeves and we become one of you because we are one of you. We all have been one of you.

Sarah Cooke 24:54
Awesome. Thank you so much. Bonnie, appreciate it.

Bonnie Ortiz 24:56
Your welcome Sarah. Thank you for having me.