“Innovation drives growth,” says one keynote speaker. “Innovate or die,” another author says. A third presenter warns that your business is going to be obsolete in just a few years if you don’t innovate.
These experts all agree: Gens X, Y and Z don’t want the same old products and services that credit unions have been providing for years — so financial services co-ops need to change what they’re doing.
Just browse the program of virtually any industry conference or skim the pages of Amazon.ca and you’ll see business books with titles like Ten Types of Innovation, Six Innovations that Made the Modern World and The Four Lenses of Innovation, to mention just a few. A cynic might say all this focus on innovation is spin and hype designed to fill seats at presentations and sell books and videos. But what if it’s true? What if your credit union needs to listen up? Would you know where to start?
For many credit unions across North America the answers to those questions are: Yes it’s true. Yes, they need to innovate. And the place to start is at the Filene Research Institute in Madison, Wisconsin.
The father of U.S. credit unions
Filene’s innovation program is called i³ — for ideas, innovation and implementation
Filene, an independent, non-profit think tank focused on the consumer finance industry and credit unions, was established in 1989. The centre is named for Edward Filene, founder of the famous Filene’s department store chain in Massachusetts, the father of the U.S credit union system and a dedicated user of research to help run his retail outlets. Over the past 25 years, the centre has provided a wealth of reports on everything from the Amazon juggernaut to the traits of young adults. People at the centre are quick to point out that its efforts go far beyond research, however: Increasingly the institute focuses on the implementation of new ideas.
The i³ concept at work
Just over a decade ago Filene established an innovation program called i³ — for ideas, innovation and implementation. Each year the program brings together up to 20 people from credit unions across North America to immerse them in the Filene method (more about that later). Initially, the program was available only to Americans, but in 2008 Filene opened the door to Canadians. The change came about as our financial services co-ops established a deeper relationship with the organization, particularly through the efforts of Credit Union Central of Canada.
The i³ers, as they call themselves, are chosen annually from hundreds of hopefuls. The program attracts people from large and small credit unions across North America. Candidates must be credit union employees who are in senior management positions, but not at the CEO level. Those selected pay no tuition, but they’re responsible for the cost of several trips to Madison and their credit union must be a member of Filene.
At one time, applicants filled out a form, then underwent an interview, but — no surprise — Filene has reinvented that system. This year, after doing the paperwork, candidates were placed in groups to tackle problems together — a better way to find people who are comfortable with teamwork, according to Andrew Downin, director of innovation at Filene. “We’re always looking for ways to improve our processes,” says Downin, who clearly practices what he preaches.
Becoming an i³er is a two-year commitment. After an initial session in Madison, much of the subsequent work is done online and shared across time zones. One recent development changes the length of time a participant spends on each project. In the past, an assignment lasted six months, meaning each person would do four projects during their two-year stint. Now each project has been extended to eight months to allow a greater focus on implementation, which Downin acknowledges is a challenge in the real world. “Testing ideas is a priority,” he says. “We want the teams to develop ideas that are feasible.” At the end of the term each team presents its ideas at the annual World Council of Credit Unions conference.
Flipping the focus
The Filene Method is based on human-centred design, which places the emphasis on what members need — not on what a credit union needs. The method implies, for example, that a financial services co-op shouldn’t focus on its need to attract younger members. Instead, it should flip the concept. It should start by determining what products or services younger people can use, then draw them in by creating something appropriate. Applying the method is an unusual approach for many credit unions, but the method itself isn’t revolutionary: It’s founded on the theories of IDEO, an award-winning global design and innovation consultancy.
Linda Young, an executive at British Columbia’s Coast Capital Savings (512,000 members, $426 billion in assets), was part of the i³ program in 2011. She’d used the human-centred design approach in other industries and was open to applying it in a credit union capacity. Young says she learned that a focus on risk and other factors can make credit unions desensitized to the needs and emotional state of members. She now believes empathy is key and that looking at issues from members’ perspectives is good practice. The Filene approach helps people challenge the status quo, she says, adding “That’s what innovation is all about — challenging stuck thinking.”
“That’s what innovation is all about — challenging stuck thinking”
—Linda Young, Coast Capital Savings
While CEOs aren’t eligible to take part in the program, 27 of its 200 graduates have subsequently risen to the role. One of them is Eric Dillon, CEO of Regina, Saskatchewan’s Conexus Credit Union (117,000 members, $5 billion in assets). A big supporter of i³, he was one of the first Canadians to take part in 2008 when he was chief operating officer at Edmonton’s Servus Credit Union (377,000 members, $14 billion in assets). Dillon is an active i³ alumnus, attending meetings in Madison and at World Council conferences. Under his direction, Conexus has conducted sessions in the Filene Method with managers at Innovation Credit Union in Swift Current, Saskatchewan (49,000 members, $2 billion in assets), and the two groups have been working together on projects.
Serese Selanders, vice president of member experience at Affinity Credit Union in Saskatoon (114,000 members, $4.3 billion in assets), is a current participant in the i³ program. “You have to earn your way there, take the aptitude test and go through the intensive process to be selected,” Selanders says. “The result is that you have a group of highly motivated people.”
She adds that one of the main benefits has been learning how to develop an ecosystem that fosters innovative ideas on a regular basis, instead of hoping for inspiration to strike. For her latest project Selanders worked with the two other Canadian participants in the current group — Douglas Ebner, lead innovation architect at First West Credit Union in Penticton, B.C. (168,000 members, $6.5 billion in assets) and Andy Sulentic, branch manager with BlueShore Financial in North Vancouver, B.C. (40,000 member, $3.5 billion in assets).
Read more: “Fresh ideas from Filene’s i³ers,” Enterprise, September 2015
The Guardian concept
The three Canadians joined forces on a concept called Guardian because they work for similar-sized credit unions and face similar problems, says Selanders. Guardian, an online portal, provides a personalized credit union service for seniors and their families, where they can exchange information and collaborate in a private, secure manner to help protect their life savings. The site puts information at their fingertips and ensures everyone peace of mind. From the credit unions’ perspective, Guardian can help them retain assets that otherwise might leave as they are transferred to a younger generation. “This is a real business proposition for credit unions,” Selanders says.
The thoughts that count
To date, the i³ program has developed more than 150 concepts for new products and services, although only a handful have been directly implemented. That’s OK with Downin and the participants. Downin says that Filene has been concentrating more on making i³ concepts financially viable, noting that he has an accounting background and brings an appreciation for numbers to his innovation efforts. Yet everyone involved realizes that the main value of the program is not in the specific projects managers develop but in the fact that they learn a whole new way of thinking. At any rate, “Any credit union can look at the ideas and put them into practice,” Downin says.
Linda Young adds that it is unrealistic to think that Filene and the program can push its ideas any further. It is up to participants to take concepts back to their credit unions and get them implemented — and that can take time. Nonetheless, all agree that going through the Filene innovation program is a valuable experience that has helped them, their co-workers and their members.
“You meet people who truly care about the future state of the credit union system,” Young says — and that makes all the difference. ◊
i³: The fast-track version
Cynthia Campbell, Filene’s director of impact and labs, says that the organization also offers shortened sessions for three to 12 employees, either at the Filene site or close to home. These programs put participants through an intensive, condensed version of i³.
According to Filene’s website “Filene staff provides tools, research, and inspiration to create innovative solutions to the problems you identified. Program participants receive Filene Method workbooks, hands-on support from Filene’s senior leaders and a professional development experience that yields instant results.” Be forewarned, however, that the programs are expensive, running from $5,000 to $36,000.
The three programs are as follows:
1. Innovation Immersion
A one- or two-day accelerated innovation process that helps credit unions address solutions for their biggest challenges.
2. Innovation Infusion
A four-day session spread throughout one year intended “to fully infuse the innovation methodology” into a credit union’s culture.
3. Innovation Immersion
Ongoing support for Innovation Immersion participants that ensures the methodology learned “stays alive, integrates into the organization, and truly drives change.” ♦