Breaking points. We all have them—both personally and professionally. My breaking point tends to occur after several straight weeks of being on the road and away from my family. There are only so many delayed and cancelled flights a person can take. I’ve seen a few mommy or daddy breaking points in retail outlets. There are only so many fits a parent can take.Breaking Point - 1

And just like a personal, professional or parental breaking point, our credit unions and banks have them as well. After all, there are so many non-productive meetings or “same old” strategies one financial institution can take.

A strategic breaking point is when your current business model can no longer sustain itself. It is the moment—recognized or unrecognized—when your current strategies are a bust and you have started your decline. Strategic breaking points can even happen to successful companies. In his book Onward, Howard Schultz, CEO of Starbucks, says, “The damage was slow and quiet, incremental, like a single loose strand that unravels a sweater inch by inch.”

Is your credit union or bank unraveling (slowly or quickly)? How do you know you’ve reached a strategic breaking point?

Here are five signs your credit union or bank might be at a strategic breaking point:

  • Your income is not diverse—Relying on just one income stream (loans, fee income, etc.) will break you. How is your overall loan portfolio looking? And what is your strategy to make up the squeeze to non-interest income? If your credit union or bank does not find alternative sources of income, it is nearing a strategic breaking point.
  • Your staff levels are too high or too low—One thing sure to drive a CEO crazy is to walk around a branch and see tellers chatting about what happened on TV last night while they wait for members to show up in the lobby. Examining staff levels is more than just looking at ratios. You also must look at how you are utilizing the folks you have.
  • Your products are stale—When was the last time you introduced a new product or service? If it’s longer than six months you are nearing a breaking point. The reality is we all offer the same stuff. So make sure you are bringing innovation to that “stuff.”
  • Your staff is confused about your brand—What is your bank or credit union about? What is your value proposition and what makes you different? You may (or may not) know the answers to those questions. But does your staff and can they articulate those differences clearly? Staff confusion leads to institutional breaking points.
  • Your balance sheet numbers are hitting a wall—How are your numbers and ratios looking these days? Are they moving in the desired direction? We sometimes hit walls with our growth. If you are not breaking through those walls, then you might just be breaking.
  • Nothing is changing—If you are not changing, you’re not growing. When was the last time you didn’t something new and different at your credit union or bank? Doing the same things year after year will only lead to the same (stale) results.

Those are a few strategic breaking point signs. What other breaking point signs we should be aware of?