NASHVILLE, Tenn.–A futurist—who says the job really isn’t about the future—offered some interesting insights into what credit unions need to do to effectively plan for the longer-term, including urging CU leaders to take advantage of an ”epidemic,” to understand why knowing “today’s” members isn’t helpful, and to do one thing “they fail to teach at business school.”
Those observations and more were shared by Sheryl Connelly, who was the chief futurist at Ford Motor Company for 27 years and who is frequently featured in major media on thought leadership, in remarks to Origence’s Lending Tech Live event.
In separate remarks during a Women’s Leadership Luncheon at the same event, Connelly shared more about her career path and other topics here.
More Jobs, Same Person
Noting that managers in all organizations, including credit unions, are today doing jobs that several years ago were done by multiple people, the reality has become that it is now more difficult than ever to pivot “when destruction comes our way,” said Comnnelly.
“The thing is it doesn’t matter how big or small, you’re going to struggle with it because, if you’re a large organization, legacy is going to hold you back, and if you’re small you might say we don’t have the resources when it comes to capital or headcount,” said Connelly.
And yet regardless of the rationale an organization might cite, preparing for that destruction of whatever type is going to require long-term planning, she said.
Polling the audience in the hotel ballroom Connelly asked for a show of hands of those CUs with a strategic plan that goes out at least one year. All hands were raised. When she asked about five-year plans, many hands were back at their sides, and when she asked who had a plan that goes out at least 10 years, one hand was raised.
“You should be proud of that,” Connelly congratulated the lone hand-raiser.
Three + One Components
When it comes to setting strategy, Connelly said there are three basic components:
- Know where you are
- Know where you want to go
- Know how you’re going to get there
And there is also a fourth component, according to Connelly, one that “they fail to teach at business school,” and that’s “anticipating the environment in which you have to execute your plan, because putting together a plan is actually pretty easy. The problem is that it goes off the rails when you encounter something that you weren’t expecting. So, even the best-laid plans can go up in smoke.”
That smoke, according to Connelly, is the byproduct of humans’ inability to think about the future.
Connelly shared that she does consulting work with executives and boards across multiple industries and she has found something to be true.
‘Universal Failure’
“I’ve noticed an almost universal failure when it comes to taking meaningful steps to contemplate what the future might hold,” she said. “And when you fail to think about the future you’re going to set up your organization for a couple of pitfalls. One, you’re going to have a short-term focus. And two, you might become so overly confident over how things are going to play out that you’re going to have blind spots, you’re going to miss things, you’re going to be risk-averse. You’ll tend to rely on the status quo, probably more than you should.”
The results of all that are many, one of which is missing out on big opportunities, while another is an inability to adapt, according to Connelly.
“I was with Ford for 27 years and I had the coolest job ever. I was the chief futurist. I retired from that role over two years ago and what I want to do now is help you and your organization build future-proof strategies,” said Connelly.
Three Reasons for Not Planning Well
Connelly said there are three reasons individuals and organizations fail at planning, the first of which isn’t as much about time as it is misunderstanding how time is used.
According to Connelly, if one asks CEOs how they divide their time, they will say 70% is spent on the present, 20% is spent on tomorrow, and 10% is on the days after tomorrow.
But that’s not the reality, she said. Instead, CEOs spend about 90% of their time on matters of today, 10% on the near-term future, and 0% on the longer-term future.
She added that going on an annual retreat and spending two hours talking the longer-term future of an organization doesn’t count as planning.
Having Night Sweats
“The second reason we don’t think about the future is it’s uncomfortable,” said Connelly. “Human nature is such that we are wired to avoid the things that make us uncomfortable. We are wired to stay away from things that feel threatening. So, when you want to talk about the future you’re going to find that there are people that are going to resist…because of all the uncertainty. If you are thinking about the future and you haven’t scared yourself then you haven’t pushed far enough, because you want to push yourself to the point of total discomfort, the sort of thing that makes you wake in the middle of night with night sweats. That’s the kind of future I’m talking about
Plain Old Hubris
Connelly said most people operate with an assumption over “how the story ends.”
“They have an unofficial view of the future and we tend to believe everybody shares our point of view,” Connelly explained. “These assumptions guide our organizations in ways that are completely invisible.”
Connelly said most organization make assumptions that investments will have payoffs and that what has made the organization or credit union successful in the past will continue to do so in the future.
“My job as professional futurist was to remind people that there are no guarantees,” Connelly said. “I would tell people that in my job I don’t predict the future; my job is to remind you that you can’t either. But when you are putting together your long-term plans you are doing exactly that and you’re doing it without any awareness of your biases and your worldviews that might be tainting your point of view.
“I thought that ‘futurist’ was a horribly misleading, because my job really was to challenge your worldview, ask you to rethink the cultural norms and long-held institutional orthodoxies, and act as the polite contrarian,” Connelly continued. “I would say, ‘Hey what happens if everything you believe to be true turns out to be wrong?’”
An Opportunity for Credit Unions, But…
If there is an opportunity in the present that will extend into the future for credit unions, Connelly believes it has to do with the “epidemic of widespread mistrust.”
She pointed to research showing the record low trust people have in the media and government and other institutions, with one bright spot being the trust consumers have in companies–which, with 62% saying they trust companies, is still somewhat low but higher than the others, Connelly explained.
“It’s a great opportunity for every single person in this room,” she said. “One of the things that’s really great about credit unions is you already have a really great relationship with your members. You have built-in trust. You’re community oriented. You put the needs of community above profits. Your members are served first and foremost. You have this default ethical orientation. But my question is, you know your members so well today, how well do you know your members of tomorrow, the people you want to serve in five, 10 or 20 years?”
In thinking about the future, Connelly said one of the best tricks is to look to generational cohorts, which she acknowledged can be “gross generalizations that have to be taken with a grain of salt.”
In general, though, she said each age cohort has its own unique set of values, attitudes and behaviors that are typically set by the time a person is in their late teens and early 20s.
The Generations to Watch
For that reason, when planning for the credit union’s future 10 or 20 years out, she said it would be smartest to pay attention to the attitudes and behaviors of Gen Z and the upcoming Gen Alpha (which has yet to develop its values and attitudes).
For instance, auto lending. The former Ford exec noted that for Boomers a car is essential, for Gen X a car is preferred, for Gen Y a car is a life stage dependent, and for Gen Z cars are optional.
She also cited research showing that when it comes to a preferred lender:
- 39% of Boomers said a credit union vs. 29% for a bank
- 24% of Gen X prefer a credit union, 24% prefer a bank
- 21% of Gen Y prefers a CU, 29% a bank
- 10% of Gen Z prefers a credit union, 12% a bank
Everything, Everywhere, All at Once
Among all generations, there’s another attitude that should also be considered, Connelly said.
“Consumers say they are overwhelmed by the change taking place, which started before Covid,” she shared. “Rampant mistrust makes people information addicts, but credible and reliable information is more daunting. Anxiety, loneliness and depression are at epidemic levels. Sixty-four percent of Gen Z is lonely.”
Also working in the favor of credit unions, according to Connely: “Ethical consumption has become increasingly important. What does a business stands for. What does it say about me?”