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Operations during mergers discussed in OpSS Council paper
MADISON, Wis. (12/12/12)--A new white paper from the CUNA Operations Sales and Service Council outlines the tricky process of meshing operations during the credit union merger process.

"There are always going to be differences in your members, in your locations and in some products and services you offer," said Steve Miller, director of operations/senior analyst for Twenty-Twenty Analytics, Coral Gables, Fla., a CUNA Strategic Services provider. Miller is one of the experts interviewed in the paper, titled "Mergers from an OpSS Perspective." "You need to understand what the differences are and how both credit unions coming together can be better," he added.

The white paper shares merger leaders' perspectives on creating a combined culture; making key operations decisions; addressing human resources issues; communicating with employees, members and other audiences; and understanding the timeline for blending operations.

As merging credit unions make choices that affect culture, delivery channels and related issues, operations executives and managers are likely to be assigned the role of reconciling differences and creating a seamless experience for members. Shaping the member experience is a key part of the continuing credit union strategy and can be achieved only by resolving operational issues, the paper said.

"Every move you make is strategic," said Mina Worthington, president/CEO of $484 million Solarity CU, Yakima, Wash., which was created by a "merger of equals" between Catholic CU and Yakima Valley CU in 2011. "Every move must be thought through for all of the alternatives and everything that could happen."

Pre-merger due diligence typically delves deeply into the strength of the loan portfolio. But it also reveals critical information about cultural differences, operating differences, communication strengths and weaknesses, human resources and other issues. The operations teams can get a head start on addressing key issues through the information gathered by the due diligence process.

When a credit union is forced to merge, observers often assume it's due to bad loans. But several operations leaders noted that inefficient operations can also pull down financial performance and create an underachieving organization. Merging with a credit union with substandard operations can create multiple issues.

In situations where operations are troubled, all parts of the business must be analyzed and acted upon quickly to correct underperforming areas. At the same time, experienced merger leaders recommend a policy of being open and honest with the board, executives, and employees of the merging credit union about the challenges and changes implemented.

To download the white paper, use the link.
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