CUdiscover. Network + Mentor + Collaborate engage.learn.grow CONCEPT DOCUMENT

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1 CUdiscover Network + Mentor + Collaborate engage.learn.grow CONCEPT DOCUMENT TEAM MEMBERS: Michael Atkinson, G&F Financial Group Robbie Roberson, Oregon Community Credit Union Melissa Vigil, Northwest Community Credit Union Polina Yakusheva, Fitzsimons Credit Union

2 PROBLEM DEFINITION Young Professionals place a greater importance on career development opportunities than any other generation and they view work as a key part of life, not as a separate activity that needs to be balanced. They place a strong emphasis on finding work that s personally fulfilling and work to connect to a larger purpose. According to some research, they re the most socially conscious generation since the 1960s. As we think about the War for Talent, one of Filene s five Centers of Excellence, there really are two battles going on; one being attracting the talent and the other being retaining talent. We believe credit unions inherently have what it takes to attract the talent of young professionals simply based upon what I mentioned earlier. In essence, credit union values are in alignment with those of young professionals. But unfortunately, that isn t always enough to keep those same people working in that industry. The other battle of retaining young professional talent is where we believe credit unions have the greatest opportunity. Our research told us that given today s advancements, younger professionals may be achieving milestones more quickly than their generational counterparts and therefore are less willing to stay put for extensive periods of time without promotion. According to a job satisfaction survey in 2016 by Society for Human Resources Management, young professionals more so than older generations, place a greater importance on job specific training, career development opportunities and career advancement opportunities which all contribute to their job satisfaction level. We couldn t help but wonder how might we better develop and engage top young talent in the credit union industry? This engagement is what leads to satisfaction, which ultimately leads to retention. Our hypothesis is that if young credit union professionals can easily access job specific training and have career development opportunities at their fingertips that lead to career advancement, they will stay engaged and they will grow and thrive within the very industry that invested in them. INNOVATIVE SOLUTION Our solution is a digital platform that connects credit union professionals and provides them with development and mentorship opportunities that not only boost engagement within their own credit union, but also the credit union industry overall. CUdiscover is a platform that focuses on three principals: networking, mentorship and collaboration. While other platforms might accomplish similar tasks, none are specific to the credit union industry and their unique philosophy. CUdiscover puts a greater focus on mentorship and collaboration opportunities, creating a deeper connection rather than simply offering a way to link with someone online. More than just a social networking platform or job board, CUdiscover combines several resources creating a well-rounded solution for credit union professionals to connect, share and learn. December 1, 17 CONCEPT DOCUMENT Page 2

3 PROTOTYPE See Appendix A CUdiscover Prototype for screenshots of website platform CUdiscover is a website (that can further be developed into a mobile app) that allows young credit union professionals to network, collaborate and be mentored. CUdiscover provides development opportunities for young professionals and allows them to continue feeling engaged in their credit union and the industry. In the network section, credit union professionals are able to connect to others similar to LinkedIn. They can search by credit union name, asset size, and department or simply follow suggestions on who they should connect with. There s also a message board/forum that users can utilize to post questions and answer others. In the mentor section, mentors and mentees are able to fill out a questionnaire form to be matched with the right person. Users are also able to access a Leadership Library where seasoned credit union professionals share their stories, tips, and experiences. A form can also be filled out to suggest a story for CUdiscover to look into and potentially publish. In the collaborate section, visitors can attend existing roundtables, create their own, or invite others to join or create a roundtable. Vendors are also able to participate in the roundtables to provide a demo or product update for attendees, providing additional income. The CUdiscover platform uniquely combines all the ways young professionals can benefit from connecting and networking with others. While the credit union industry has a few competitors in this field, few are as complete, user friendly and robust as CUdiscover. Filene s product, Cooperative Trust, features many of the same features and benefits for use by credit union professionals. With the research, feedback and suggestions, our team is confident that the tools and options CUdiscover offers would be a great benefit and addition to the Cooperative Trust. While competitors are free, CUdiscover offers its extensive services at a fee that yields higher quality information as well as providing revenue for the product. Individuals as well as credit unions can take advantage of this great feature. Credit unions can offer CUdiscover as a benefit to all their employees free of charge while benefiting from higher engagement and extended development opportunities for their staff. Individuals whose credit unions aren t currently participating, can sign up to become members of the website at no charge and would only need to verify that they work at a credit union by inputting their address and the name of their credit union. December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 3

4 TESTING AND RESULTS We tested the validity of our prototype using qualitative data via multiple anonymous survey channels. We focused on gathering feedback from four specific categories of employees: Current Credit Union Human Resources leaders, Current Credit Union CEO and Executives, Current Credit Union employees with leadership experience, and non- Credit Union leaders. After our initial prototype was completed, we surveyed a random group of current credit union HR professionals, executives and CEOs gathering feedback regarding their thoughts on developing employees and their thoughts after they perused the CUdiscover prototype. 50% of the group surveyed stated that they have coached employees to find a mentor in the past six months and 25% state they have coached employees to become a mentor. After reviewing CUdiscover, almost 70% stated the opportunity of becoming a mentee would be beneficial to employees while participating in a round table, use of the Leadership Library and Networking were the highest rated opportunities at 75% beneficial. More than 70% of those surveyed stated they believed it reasonable for a Credit Union to pay $3 or more per month to offer CUdiscover to its employees supporting the 91% of responders who would consider CUdiscover as an employee benefit. This data led us to focus additional research specifically on mentorships. In our survey specific to current Credit Union leaders, 65% state they have participated in a mentorship program either as a mentor or mentee and over 76% state they have wanted to become a mentor however almost 80% have never taken actionable steps to become a mentor. The three most common reasons why responders have not applied to become a mentor include not being sure where to apply, not having the time and fear of not know what to talk about/ having value to add to a mentee. The top reasons our responders thought they might want to become a mentor include giving back and helping someone, self-growth opportunity, and networking/ building relationships. When asked what could make the mentor experience better, respondents stated a good matching system, being provided a resource of suggested topics for discussion and a seamless and convenient application process. Note of interest: Our third survey was sent out to 100 non-credit Union leaders using the exact questions from the survey focusing on mentorships. Interestingly, the results mirrored those of current credit union leaders with marginal discrepancies. See results of all three surveys in Appendix B: CUdiscover Prototype Survey Results, Appendix C: Mentorship Survey Results Credit Union Leaders and Appendix D: Mentorship Survey Results Non Credit Union Leaders December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 4

5 BUSINESS MODEL AND 3-YEAR FINANCIAL PROFORMA Our problem statement focuses on emerging leaders within the credit union system but there are many benefits for credit unions to participate. Participating credit unions will have a tool to develop and engage employees to future leaders. This in turn will lead to a more productivity and lower turn-over. For this reason our business model is focused on signing up credit unions and charging them an annual fee for their employees to join the platform. The five-year financial projections have been developed using the number of credit unions in 4 different tiers, starting at less than $ 100 million in assets and up to over $ 1billion in assets. The pricing per credit union were set a very reasonable levels, starting at $ 500 a year for Credit Unions with less than $ 100 million in assets to $ 3000 a year for Credit Unions with assets more than $1 billion in assets. We assumed 5 % penetration into the credit union system with a 5 % growth rate over the five years. By year 5 we would aim to have 359 credit unions signed up and over 3600 users. We also included advertising revenue which would be presented for those individual users that sign up for free if their credit union does not participate. Based on these assumptions, it is projected that the CUdiscover would begin generating positive cash flows in Year 2; and cumulative earnings after five years would be $ 371,486. December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 5

6 Input Assumptions Proforma Financials 5 year Performance Metrics Estimated # CUs by Size 1 Net Present Value (NPV) $306,521 Credit Unions < $ 100 mm 4,252 Internal Rate of Return (IRR) 228% Credit Unions $ 100 mm - $ 500 mm 1,078 Hurdle Rate 5% Credit Unions $ 500 mm - $ 1 bn 246 Number of Total Credit Unions 359 Credit Unions $ 1 bn Credit Union Penetration 5% Year 1 Year 2 Year 3 Year 4 Year 5 Growth Rate of CUs 5% Credit Unions < $ 100 mm Credit Unions $ 100 mm - $ 500 mm Yr1 Estimated Users by CU Size 1 Credit Unions $ 500 mm - $ 1 bn Individual Users 50 Credit Unions $ 1 bn Avg Credit Unions Employee < $ 100 mm 5 Estimated Number of CUs Avg Credit Union Employees $ 100 mm - $ 500 mm 15 Avg Credit Union Employees $ 500 mm - $ 1 bn 25 Revenue Avg Credit Union Employees $ 1 bn + 40 Individual User Revenue $ - $ - $ - $ - $ - Growth Rate of Users 7% Credit Unions < $ 100 mm $ 53,250 $ 109,250 $ 114,750 $ 120,500 $ 126,500 Credit Unions $ 100 mm - $ 500 mm $ 13,500 $ 27,750 $ 29,250 $ 30,750 $ 32,250 Annual Fee per CU Credit Unions $ 500 mm - $ 1 bn $ 3,000 $ 6,250 $ 6,750 $ 7,250 $ 7,750 Individual Users $ - Credit Unions $ 1 bn $ 3,500 $ 7,250 $ 7,750 $ 8,250 $ 8,750 Credit Unions < $ 100 mm $ Website Revenue $ 3,000 $ 6,000 $ 9,000 $ 12,000 $ 15,120 Credit Unions $ 100 mm - $ 500 mm $ Total Revenue $ 76,250 $ 156,500 $ 167,500 $ 178,750 $ 190,370 Credit Unions $ 500 mm - $ 1 bn $ 1, Credit Unions $ 1 bn + $ 3, Expenses Development Costs $ 30,000 $ - $ - $ - $ - Website Ad Revenue Annual Maintenance and Hosting $ 2,000 $ 2,060 $ 2,122 $ 2,185 $ 2,251 Year 1 $ 3,000 Marketing Costs $ 30,000 $ 30,900 $ 10,000 $ 10,300 $ 10,609 Year 2 $ 6,000 Administrator Costs $ 50,000 $ 51,500 $ 53,045 $ 54,636 $ 56,275 Year 3 $ 9,000 Total Expenses $ 112,000 $ 84,460 $ 65,167 $ 67,122 $ 69,135 Year 4 $ 12,000 Year 5 $ 15,120 Total Net Earnings $ (35,750) $ 72,040 $ 102,333 $ 111,628 $ 121,235 Cumulative Earnings $ (35,750) $ 36,290 $ 138,623 $ 250,251 $ 371,486 Costs Development Costs (One Time) $ 30,000 Users Annual Maintenance and Hosting Costs $ 2,000 Individual Users YR 1-2 Marketing Costs $ 30,000 CU Users YR 3-5 Marketing Costs $ 10,000 Total Users P-T Administrator Salary + Benefits $ 50,000 Annual Growth Rate of Expenses 3% Assumptions 1 Users and CUs added uniformly through the year December 1, 17 CONCEPT DOCUMENT Page 6

7 COMMENTS, NEXT STEPS, AND CALL TO ACTION Comments As we proceeded with our research we identified a similar solution which has been developed by The Cooperative Trust. The similarities between the two platforms include networking, messaging boards, mentorship program and in-person meet ups and events. Based on the feedback from user focus groups some of the features of CUdiscover that resonated with users that The Cooperative Trust may want to consider in the future are: 1. Virtual roundtables: where users can set up their own virtual roundtables with their network 2. Leadership library: where accomplished leaders can share their stories and advice to emerging leaders 3. Cross credit union job shadowing opportunities Attracting mentors was a challenge identified by both our research and The Cooperative Trust. As such we did additional research around attracting and engaging mentors. Two key insights found are: 1. Leaders who acted as mentors enjoyed greater career progression, achieved greater monetary rewards and were more engaged at work 2. Mentors were more engaged in the mentoring process when it was done because they wanted to share their wisdom, or wanted to give back. Mentors were less engages when they were told they need to be a mentor. When comparing potential mentors in the credit union system versus outside the system we found some differences. Credit union leaders were more likely not to know where to start mentoring, they were less likely to say time was a barrier and finally 80 % of credit union leaders saw mentoring as a self-development opportunity compared to only 56 % for non-cu leaders. Based on interviews and research we were able to identify three ideas to attract and engage mentors which The Cooperative Trust may want to explore. First, retiring leaders may be a group very eager to mentor as they want to give back and stay in contacted to the credit union system. Reaching out to these retiring leaders before they retire may be an effective strategy. Second, there are inexpensive mentoring management tools that can be incorporated to the platform to better match mentors, track results, and provide resources for mentors and finally share successes. Finally, it is important to market the idea of mentoring to the credit union system. This will involve developing a marketing strategy, connecting with human resource leaders across the credit union system and share successes. December 1, 17 CONCEPT DOCUMENT Page 7

8 How can you help? Credit union partners: Contact your team and fellow industry colleagues to prove the value this solution can have for you and your members. With credit union interest and a cooperative mindset, we can achieve critical mass and ensure the product is brought to market in a production environment. Development Vendors: Reach out to our team or to Filene Research Institute and work with us to help develop and enhance this product. Next Steps The next step is to explore if there is alignment and opportunity to combine features of CUdiscover and The Cooperative Trust. Mentoring represents a significant opportunity to engage our future credit union leaders whichever platform is used we need to start the dialogue about mentoring and get the word out where leaders can sign up to mentor. December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 8

9 ABOUT FILENE Filene Research Institute is an independent, consumer finance think and do tank. We are dedicated to scientific and thoughtful analysis about issues affecting the future of credit unions, retail banking, and cooperative finance. Deeply embedded in the credit union tradition is an ongoing search for better ways to understand and serve credit union members. Open inquiry, the free flow of ideas, and debate are essential parts of the true democratic process. Since 1989, through Filene, leading scholars and thinkers have analyzed managerial problems, public policy questions, and consumer needs for the benefit of the credit union system. We support research, innovation, and impact that enhance the well-being of consumers and assist credit unions and other financial cooperatives in adapting to rapidly changing economic, legal, and social environments. We re governed by an administrative board made up of credit union CEOs, the CEOs of CUNA & Affiliates and CUNA Mutual Group, and the chairman of the American Association of Credit union Leagues (AACUL). Our research priorities are determined by a national Research Council comprised of credit union CEOs and the president/ceo of the Credit union Executives Society. We live by the famous words of our namesake, credit union and retail pioneer Edward A. Filene: Progress is the constant replacing of the best there is with something still better. Together, Filene and our thousands of supporters seek progress for credit unions by challenging the status quo, thinking differently, looking outside, asking and answering tough questions, and collaborating with like-minded organizations. Filene is a 501(c)(3) nonprofit organization. Nearly 1,000 members make our research, innovation, and impact programs possible. Learn more at filene.org. Progress is the constant replacing of the best there is with something still better. Edward A. Filene 612 W. Main Street Suite 105, Madison WI

10 Appendix Appendix A: CUdiscover Prototype Screenshots The Landing Page December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 10

11 The Network: December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 11

12 Main Menu: December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 12

13 Leadership Library: December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 13

14 Mentoring: December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 14

15 Roundtables: December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 15

16 Pricing: December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 16

17 Appendix B: CUdiscover Prototype Survey Results December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 17

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24 Appendix C: Mentorship Survey Results Credit Union Leaders December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 24

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37 Appendix D: Mentorship Survey Results Credit Union Leaders December 1, 17 CUdiscover CONCEPT DOCUMENT Filene i 3 Page 37

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