Buildings and Your Board: How to Create a Blueprint for Expansion Success

When it comes to portfolio expansion, we counsel our clients to create a plan that is built around a Three Step holistic platform.

Several years ago, we were engaged by a well-established regional credit union to help secure an array of new branches in accordance with their board-approved expansion plan. It was a significant growth initiative that would take approximately five years to bring to fruition.

Due in part — although not completely — by the pandemic’s onset, the first phase was behind pace when we were engaged and internal pressure was already running high. High both at the executive level and with the Board of Directors. The reason for the delays were varied but the genesis of the tension was clear: Lack of effective planning and communication.

Working as diligently and quickly as possible, we were able to get the first phase on track and reasonably on-schedule. Relieved, our client asked when we should begin working on the next traunch of branches scheduled for opening two years down the road.

Our reply surprised them: “Right now.”

Their response: “Really?”

Our response: “Uh huh.”

When Bigger isn’t Better

What we were witnessing was something we have seen numerous times in the past. That is, once branch sites are secured and actual work commences, leadership often takes its foot off the pedal. And, in our experience, this is more likely to happen within larger — rather than smaller — credit unions. The reason for this is often two-fold.

1. Larger credit unions – just by the nature of their size – have more initiatives going on at any moment making it challenging to keep all the organizational balls in the air. So when there is the sense that a project is underway, internal resources often get shifted to other priorities. Then things slip. Then people get blamed. Then people leave.

2. Leadership in large CU’s tend to be farther removed from tactical details like construction timelines, city zoning, permitting processes and lead times. In smaller CUs, senior executives are intimately involved in every aspect of expansion from the ground breaking to the greenery leading to the entrance door. As a result, initiatives in smaller organizations are more likely to stay on track.

To that end when it comes to portfolio expansion, we counsel our clients to create a plan that is built around a Three Step holistic platform, as follows:

Step One – Conduct an Internal Operations Audit:

This step requires looking at all of the future key initiatives within the organization – including their costs and workforce requirements – that may be taking place during the expansion window. This includes, I-T and A/R projects, internal training or re-branding projects. This step requires the attention and input of every manager in the organization, including the Board. Doing this will help reveal any un-seen obstacles that may emerge like rusty nails on a dark highway. Bottom-line, doing this ensures that everyone internally is in alignment.

Step Two – Create a Firm (Yet Flexible) Timeline:

The next step is to lay out a comprehensive and “do-able” schedule that is “aggressively realistic” while allowing for “soft shoulders” that a project can turn onto when needed without derailing the entire trip.

This means formulating decisions and assumptions that may not come to fruition for several years. And it cannot be done in a silo or vacuum. Timelines are an all-hands-on-deck discipline. It’s not easy, but the price of not doing this can be painful and pricey.

And keep this in mind: In multi-year real estate initiatives, different disciplines often take place in parallel. i.e., while one or more branches are being built, the search should be on for the next branch locales. And while that search is taking place, financial and demographic outlook modeling should be under way for the branches that will follow in two or more years.

Think of it as dance, but more like a choreographed ballroom competition and less like a mosh pit. In MBA-speak, this is referred to as Process Optimization. (For more on this, check out anything on the topic by the late/great W. Edwards Deming. Highly recommend it).

Step Three – Com-mun-i-cate:

It seems so easy but it’s obviously not. If it was, far less people would get divorced.

Communication is the tie-that-binds. (Again, Demings). For this reason, communication shouldn’t be simply ad-hoc (although this is good, too), but fully scheduled and include meetings and updates with all key stakeholders, including the Board. No one – and I repeat – NO ONE involved in management should have to say about a problem after-the-fact, “Yeah, but I didn’t know that!”

Communication takes discipline and commitment. Even if it sometimes seems like a pain-in-the-&%#@!, clear and consistent communication is imperative.

It’s been said that “no plans fully survive their contact with reality.” True enough. But the less complete the plan, the harder the impact with reality – not to mention with your Board of Directors.

Corey A. Waite is a leading commercial real estate advisor to the financial services industry. As Founder and CEO of Rubicon Concierge Real Estate Services, Corey works directly with senior executives coast-to-coast to deliver strategic plans and transactional services focused on optimizing the needs of employees, clients and members.

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