Posted by Terry Young, VP - Communications & Marketing , Catalyst Corporate FCU on 5/23/2019

Credit unions’ love affair with economics is going to become more graphic this year.

Allow me to explain.

For 20 years now, one of my favorite roles has been to connect credit union leaders to the emerging financial landscape via an annual Economic Forum.

In the 20 years of coordinating Economic Forums, I’ve had the opportunity to work with nearly a hundred economists. Some have been dynamic. Some have been funny. And some have been painfully longwinded, or dull, or both. I apologize for that last group.

It is hard to make a love connection with the economy if the economist puts you to sleep.

Fortunately, Joe Pine, author of the Experience Economy, was a presenter at an earlier Economic Forum that I worked on. His message helped me to understand the importance of not just creating an educational event. As I listened to his presentation, I understood my mission going forward would be to create “an experience” that would help facilitate a connection between the audience and the economy.  

Pine argued that businesses must orchestrate memorable events for their customers, and that memory itself becomes the product: the "experience.”

Economists have historically lumped experiences in with services, but as Pine noted, “Experiences are a distinct economic offering, as different from services as services are from goods.”

Pine used the birthday cake as the central signifier of the “experience” economy – particularly the shift from commodities (the core ingredients of a homemade birthday cake, like flour, sugar, and eggs) to goods (a Betty Crocker mix purchased at the grocery store) to services (the birthday cake bought at the grocery store bakery, decorated by an anonymous employee, instead of dear old mom) to experiences (the now-common “outsourced” birthday party using a rented themed space, catered food and, of course, a birthday cake).

From that point forward, efforts went beyond simply hiring economists, and more toward making sure attendees had a memorable experience - during which there would be ample opportunities to make a connection with economic insights. I believe credit union leaders looking to position their institutions for success have a strong desire for economic insights.

For example, this year’s Forum will feature economic insights from nearly a dozen presenters, captured by Angie Moline, a self-described “professional doodler.” Her unique on-the-fly doodles provide a concise and visually entertaining recap of the information presented. She maps, graphs, sketches, doodles, and draws her way through topics such as the environment, eco-travel, engineering and art. This year, she will take on economics.

Her process is pretty straightforward. With colored markers in hand, she listens attentively for key concepts. As she captures important ideas on her sketch pad, her distinctive infographic comes to life. And when finished, the renderings become a useful, visual reminder.

Moline says: “I work as the scribe-on-the-side to illustrate the flow of ideas during important meetings, record key points that speakers make at conferences, and convert wordy documents into easy-to-read visual summaries.” Simply put: “I draw pictures to help you think.”

Attendees will receive a compilation of the graphic work she creates during the conference. She will also be the final speaker, presenting A Visual Thinking Workshop - Practical Tools That Lead to Innovative Results.

This year, the economy, with Moline’s help, will look good- literally.

Categories: Business Partners, Education & Training, Marketing & Printing
Posted by Steve Stovall, Product & Experiential Marketing Manager, Credit Union Resources, Inc on 5/21/2019
By Tammie Harvey, CUNA Mutual Group, Director, Continuous Improvement & Agile Execution
 
In an era of rapid change and marketplace disruption, we’re all challenged to help our customers/members identify and address a host of evolving needs. Realizing traditional methods – known as a waterfall approach – were not helping us reach our goals at a necessary pace, we shifted our thinking to an agile approach.
 
Now, a waterfall approach consists of building requirements, designing solutions, releasing to the marketing and then getting feedback from customers. In a nutshell, you focus on figuring out exactly what you want in the beginning and you don’t tell anyone about it or use the solution until it’s done and ready for implementation. By that time, you might be headed in the wrong direction, and because it’s a waterfall, there’s no way to go back up to one of the previous steps in the process, without adding time, cost or risk.
 
Agile on the other hand is about gathering customer insights, building solutions and verifying with customers along the way. Then, releasing the minimum amount necessary to serve your customers’ needs. You build upon the minimum viable solution over time to get to your end state – consistently co-creating with your customers along the way. Through continuous learning, you mitigate your risk of building something your customers don’t want or need.
 
To illustrate, think about someone who opens a coffee shop. On day one, they sell coffee. When customers go through the drive-thru, the owner asks them what else they want. The next day the owner adds muffins to the menu. Over time, the coffeeshop becomes a restaurant that serves a variety of beverages, food items and gifts – all that the customers said they wanted while giving you feedback along the way.  
 
Agile can be intimidating at first. It requires change. Change in how you think, behave and execute your work. Let’s face it, that can be hard. Agile also comes with a whole set of its own terms. There are several methods that can be adopted, depending upon the business problem you are trying to solve. And, because it is a relatively new concept to the financial services industry, education is key – for employees and customers. The learning never stops.
 
The results; however, speak for themselves. An iterative, co-creation process leads to efficient development, aligned work teams, positive customer experience, quality solutions, and a better ability to manage and change priorities.
 
Our results have been both transformational and incremental. For example, product development now takes months instead of years, and when we determine through testing that something isn’t adding value for our customers, we stop working on it. In addition, employees feel empowered to identify improvements and adopt new ways of working so they can deliver value faster for our customers.

Not only are credit unions excited about the products and services we’re building, and how they’re part of it, they’re excited about how they can start embracing this thing called “agile” and reap its benefits.

This blog originally published at CUNA Mutual Insights on Friday, April 12, 2019.

Categories: Business Partners, Education & Training, Marketing & Printing, Sales & Service, Strategic Planning & Consulting
Posted by Mr. Zane Wilson, VP Investment Services, Catalyst Corporate FCU on 4/25/2019

A closely-monitored measure of the Treasury yield curve briefly inverted a few weeks ago. The yield on the 10-year Treasury note fell below the yield on the 3-month T-bill (see chart below), unsettling equity investors worried about a potential recession.

The inversion of the 3-month to 10-year Treasury yield spread came about as bond yields around the world fell. Disappointing economic indicators from the European Union confirmed fears of slowing growth in a region that was already reeling from a trade slowdown and Brexit uncertainty. Stock investors flocked to the safe haven of Treasury securities, driving yields down. Around the same time, the FOMC cut its interest rate-hike projections from two to none, and Fed Chairman Jerome Powell cited global economic slowdown and tame inflation as reasons for caution.

Yield curve basics

The Treasury yield curve is a line that plots Treasury yields across maturities ranging from three months to 30 years. Typically, the Treasury yield curve is upward-sloping, providing higher yields for investors who hold longer-term securities that are subject to inflation risk and other uncertainties. An inverted Treasury yield curve can be a concern for a variety of reasons: investors may be worried about future economic growth, so long-term Treasury securities are favored, or overly tight monetary policy has short-term rates elevated, causing a slowdown in the economy.

A general inversion of the Treasury yield curve can be seen as a reliable warning of a potential recession within a year or two. Inversions have preceded every U.S. recession going back to 1955, with only one false positive. While inversions of other portions of the curve have also served as recession indicators, many economists believe that the 3-month to 10-year Treasury spread is the most reliable. Inversions of the 3-month to10-year spread have preceded each of the past seven recessions, including the 2007-2009 contraction, and have offered only two false positives – an inversion in late 1966 and a very flat Treasury yield curve in late 1998.

Should we be worried?

A recession is not a certainty. Some economists have argued that the aftermath of the Federal Reserve’s quantitative easing measures, during which global central banks bought up government bonds, may have robbed yield curve inversions of their reliability as a predictor. Since so many Treasury securities are held by central banks, the Treasury yields can no longer be seen as market-driven. The Fed may have created an artificial yield curve that they cannot wind down for years.

The yield curve has been flattening for some time, and it’s possible the 3-year to 10-year Treasury yields would need to be inverted for a sustained period to signal a recession, instead of inverting for just a few days.

We cannot ignore a rising recession risk, but for now, it has largely been a story of global growth concerns. If the global economy continues to deteriorate, however, the U.S. will feel the negative effects. On the positive side, if the Administration can resolve trade agreement/tariff issues, we should see a bump in equities, Treasury yields and economic growth. 

Categories: Business Partners, Financial & Auditing, Sales & Service
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