1. Know your competition
First Calgary Financial is a credit union focused on retail and small-business customers living and operating in Calgary. That means it faces off against five large banks, which, in addition to their size, are much more iterative. “By most measures, they’re the best-run banks in the world—and certainly acknowledged as such by the financial crisis in 2008, so the bar is high,” Kelly says.
2. Define your edge
According to Kelly, First Calgary Financial has two advantages over its competition. First, it’s local, which gives it the ability to understand the market and react quickly to changes. “Decisions don’t have to be routed up to corporate headquarters in another city; my desk is the last desk where any decisions need to pass,” Kelly says.
Second, there’s no conflict between the credit union’s goals and its customers’ goals. “Banks struggle to do what’s right for the shareholder, which is maximizing profit, [while doing] what’s right for the customer, which is minimizing cost,” Kelly says. “We don’t have that conflict because our owners and our customers are one and the same.”
He points to First Calgary Financial’s “No Fees For Me” account to illustrate his point. “The fact that our members don’t pay service fees is okay because they’re shareholders,” Kelly says. “They’re just getting up front what they would have got in dividends.”
3. Develop a focus
First Calgary Financial’s choice to work with retail and small-business customers is largely based on location. “Alberta has a low tax rate, and there’s lots of migration, so Calgary’s business sector is robust and mature,” Kelly says. “We don’t try to be everything to
everybody—for example, we don’t entertain agricultural lending—but we focus on small businesses, typically those that operate within the city, and we serve them well because we know the nuances of the market and have quick turnaround time, given that there’s no bureaucracy to go through to get approvals.”
4. Delegate appropriately
One of Kelly’s roles is to interact directly with First Calgary Financial’s board of directors, which represents the owners of the credit union, First Calgary Financial’s members. “I’m the board’s only employee,” Kelly says.
To implement the credit union’s strategy, however, he relies on a senior-leadership team of six people, who are tasked with running the various areas of the company. “It’s my job to meet with them and discuss any issues that may arise in their areas,” he says, “and [I also] facilitate group meetings to develop strategy and effect business plans.”
5. Stay on the forefront of technology
First Calgary Financial has been an early adopter of many of the innovations common today in retail banking. It, along with other credit unions, introduced online check imaging years before the retail banks did, and it was also the first credit union in Alberta to introduce e-money transfers, which allow members to send money to and receive money from people who deal with other financial institutions. “Our members demand that we stay competitive from a technology perspective while providing excellent customer service,” Kelly says.
6. Attract the right employees
Because First Calgary Financial doesn’t have to answer to an institutional investor such as a hedge fund, it attracts a workforce that is interested in and committed to serving members—and that leads to greater customer satisfaction. “As evidence, we’ve seen significant growth in our membership in the past couple of years, with 3,000 new members added year-to-date as of September 2013,” Kelly says. “That’s the largest increase in several years.”
When Kelly joined First Calgary Financial (then First Calgary Savings) in 1995, it didn’t have sufficient capital and was under supervision, meaning its regulator had operational control. “That was a difficult environment in which to operate,” Kelly admits, “but we were able to turn the ship around in two to three years.”
Since 2000, First Calgary Financial has operated independently, even through the financial crisis of 2008 and 2009. “Like most institutions, we saw significant pressure, but we worked with members and focused on weathering the storm,” Kelly says. “And we did get through it; 2011 was the most profitable year in the history of the credit union.”
8. Expand your horizons
“Someone told me early in my career to volunteer for projects that would take me out of my normal sphere of responsibility, and I’ve taken that to heart,” Kelly says. “When you get broader experience, you see a wider view, and that can help you grow personally—as well as [grow] the company for which you work.”