In a market-driven economy, industries must continually adapt to changing forces in order to survive. The emergence of technology has only underscored this business truth.
As technology continually evolves, innovation can make today's young upstart tomorrow's industry leader ... and quickly consign today's industry leader to the dustbin in the process. The examples of this immediately come to mind - the shift from film to digital photography, from retail video rentals to home delivery of DVDs and streaming video, and the evolution of music downloads and peer-to-peer sharing.
Could a similar disruption happen ... or already be happening ... in financial services?
John Lass, CUNA Mutual Group's SVP of Strategy, led credit union professionals through an interactive session on so-called strategic inflection points at the NCCUL Annual Meeting on Monday. Lass cited how technological disruptions changed consumer behavior and made obsolete brands such as Blockbuster Video and Borders Books ... and even iconic brands like Eastman Kodak.
Strategic inflection points are also known by other terms such as strategic crossroad, tipping point or critical juncture. "Whatever you call it, the meaning is the same," Lass said. "This is a point in the evolution of an industry when certain decisions are made and, based upon those decisions, the industry either goes on to a new level of success or it matures and gradually fades away."
Lass used the disruptions in photography, video rental and music industries to illustrate what a strategic inflection point looks like. He then asked credit union staff and volunteers to consider whether they felt the movement was at a strategic inflection point.
"This is a question I believe every credit union, every volunteer board, and every management team needs to be asking themselves," said Lass of the potential for a strategic inflection point to impact financial services. Lass shared emerging players in mobile payments as examples of potentially disruptive innovations in financial services.
While disruptions like mobile payments and peer-to-peer lending may strike fear in some credit union leaders, Lass says his aim is to help the credit union movement be aware of this emerging landscape in order to chart the right course for the future. "Let's just assume we are at a strategic inflection point. What are some practical things we can do as volunteer boards and as management to manage through that kind of change successfully ... and ensure the viability of our credit unions for a generation," he concluded.