Building Your Business Model to Create a Market Advantage

Can you strictly define your business model? Your competitive advantage? If you say, “We are a full service credit union, and our competitive advantage is our great prices and our member service,” then you are missing the boat.

Being a credit union is not a business model; it is a charter type. Being “full service” doesn’t really answer anything. Sears is full service, yet they struggle to compete in the new, complex marketplace. While offering great member service with the best price is sound wisdom, it is seen by many experts and almost mutually exclusive.

Let’s breakout out business models and competitive advantages in five delineated areas:

Effective Leadership by Your Board

How well does your board “lead” your credit union? Leadership by the board is very different from leadership by management. As a matter of fact, leadership by the board requires a different skill set than leadership by management.

Boards govern. What does that mean? It means they don’t “operate.” I know that doesn’t answer the question, but it is an important point. The area of Operations, led by the CEO, is day-to-day activities requiring active and present oversight.

Becoming a Strategic Board

Generally, boards do two things that have a positive impact on their organizations:

  1. Plan strategically; and
  2. Hire a competent CEO who is accountable to the strategic plan.

Nearly any other things the board involves itself with will have either a neutral impact or a negative impact. Unfortunately, the neutral impact list is rather short.