State of the Canadian Credit Unions

Three steps that refocused Concentra Financial‘s mission and realigned its purpose within Canada’s evolving financial industry

1. Convince the Credit Unions

When Ken Kosolofski joined Concentra Financial Services Association as president and CEO, he’d been working in the credit union system for almost 10 years and had a firm understanding of its potential. At the time, Concentra was aiming to focus on credit unions entirely, but there was some hesitation: it was on the heels of the financial crisis, and Canada’s only financial retail association was concerned there’d be limited opportunity to maximize revenue potential if it focused on credit unions entirely.

“When I joined Concentra, the brand’s tagline was ‘Empowering credit unions,’” recalls Kosolofski. “What did that mean, though? How do we do that? How do we make money with this focus? The board members had ideas about how to achieve these things, but they left it to me to put my ideas into place.”

It turned out that Kosolofski had some convincing to do—convincing Concentra Financial credit unions should be their main focus, and convincing credit unions that Concentra could be trusted in the face of its credit-union business being hedged by direct business.

“We were in the broker retail market, gathering mortgages and deposits and working directly with commercial clients, which meant credit unions did not see a line of sight to how this model, which they perceived as competitive to them, was beneficial,” Kosolofski explains. “As a result our business with credit unions was limited, and we did not have the national penetration that we could have had.”

Kosolofski’s approach was to take on the hard, personal work of getting credit unions to trust Concentra, and that meant visiting with them, asking them what they needed, and sharing Concentra’s ideas for supporting them in their endeavours.

And it worked. Concentra was able to deliver on its promises, so more credit unions did business with it, thus expanding its footprint across Canada. Once thought of as merely a “Saskatchewan company,” Concentra now provides financial and trust solutions to more than 300 credit unions across Canada.

Prior to his role with Concentra, Kosolofski was the CFO for SaskCentral. He also held a variety of senior finance positions at CUETS, SAHO, the City of Regina, and the Saskatchewan government. He received his bachelor of commerce degree in 1981, his CA designation in 1984, and has participated in a variety of senior-leadership programs throughout his career.

2. Build on what was working

Concentra had a lot going for it when Kosolofski joined. The company took some important steps in the aftermath of the financial crisis, setting the groundwork for the CEO to be able to focus on servicing credit unions.

“Coming out of the financial crisis in 2008, significant work was done on our balance sheet to set it up for more sustainable profitability, so we could grow the business the way we wanted to,” Kosolofski says. “Concentra had recognized the issues and the financial problems they had and had already begun to refocus the business, which had begun by restructuring the balance sheet to ensure we were somewhat insulated from further financial shocks.”

Concentra also had systems in place that were working, as well as a staff of intelligent and competent people, but Kosolofski says they were working in silos and not understanding how they could make money in the credit union system.

“With the appropriate focus and encouragement, we were able to change that over time,” he says. “We worked to integrate our various business units into well-coordinated teams, focused on delivering on the new corporate goals and objective while creating value for credit unions.”

3. Put the right people in the right place

For the entirety of his career, Kosolofski has been placed in roles for the specific purpose of solving problems. As a result, he’s learned to get a quick, accurate read on businesses, and he’s become rather good at developing a rapport with people and understanding where they’d make a good fit according to their skill sets.

This last bit is particularly important to Kosolofski, who says “people changes” are always difficult, and when Concentra made the decision to exit some of the broker markets and direct commercial business, the firm had a number of staff supporting these businesses that had to be let go.

“It was difficult for the organization, but it was done very openly and supportive of those employees leaving and staying,” he says. “It was a big shift in our company, as credit union systems usually don’t do these types of layoffs.”

In Kosolofski’s five years with Concentra, it also completely overhauled the executive team, including reducing its size. The CEO says most of the changeover was due to retirements and some due to restructuring of the business, but the changes ultimately allowed Concentra to bring in new people with new ideas while also promoting employees who understood the journey Concentra was on. It brought in people who were supportive of Concentra and who, as Kosolofski notes, “were not burdened by the past and were excited and engaged in developing the business.”

“We now have a team in place that truly understands the value and importance of working with credit unions, and we’re building on that,” Kosolofski says. “We’re not in ‘fix it’ mode anymore; we’re in ‘build, grow, and change’ mode.”