Servus Credit Union fails forward to innovate member financial fitness


What does it mean to fail forward?


Ian Glassford, recently retired Chief Financial Officer with Servus Credit Union can explain. “It’s one of the few things I’ve found that truly works when trying to innovate: a small, contained experiment where there is room to fail and to learn from that failure.”

Failing forward can result in great success, like winning the Canadian Credit Union Association’s National Innovation Award as Servus did in May 2019 for one of their innovative new products, the Patronage Advance Program.

“At Servus, we augmented our innovation journey in 2015 with a very deliberate approach,” recalled Gail Stepanik-Keber, Purpose and Innovation Officer with Servus Credit Union. “We started by creating an innovation system and training all our senior leaders in human-centric design thinking first.”

Leaders at Servus encourage diverse teams to work together to find creative solutions.

“Credit unions come from a history of being innovative, but we don’t promote that fact enough. We should celebrate it,” said Gail.

In late 2016, a team of cross functional employees came together to brainstorm how to make profit-sharing, one of the biggest unique differentiators of credit unions, more relevant.

“We’ve been sharing our profits with members for more than 30 years. So we asked ourselves if it was truly impacting their lives,” Ian said. “And the answer was maybe not as much as it could be.”

The team looked at multiple different ways that patronage (aka the cash-back part of profit-sharing) could be applied and in spring 2017 conducted a series of experiments to try and help improve member financial fitness.

“Ultimately, shaping member financial fitness guides all that we do. That’s our Noble Purpose at Servus,” said Gail. “Any problem we try to solve uses that lens.”

One of the experiments involved calling a few members after they received their patronage money and offering them a high interest rate or bonus dollars if they agreed to save it. Members were receptive, but asked to get the offer before they received the money, not after.

“This got our attention. We asked ourselves – is there a way we can pay out patronage earlier?” said Ian. “So on paper, the initial pilot was a failure, but it resulted in fantastic insights. And we hadn’t invested so much in our original idea that we were afraid to fail.”

Servus continued to test the idea – rolling it out a select few branches – and tracked the response. From these experiments, the Patronage Advance Program was born.

The idea is simple: Servus pays people what they will earn from profit-sharing over the next four or five years in advance. The catch? The money must be put towards one of their financial fitness goals. The program, rolled out to all branches in June 2018, has been hugely successful.

And innovation at Servus won’t be stopping anytime soon. Ian believes all credit unions can work together to collectively improve the lives of members and continue to learn, experiment and play.

“Credit unions can share ideas because we’re not built on a model of competition and profits above all else,” said Ian. “There’s an opportunity to have a dialogue with other credit unions and learn from each other. We will all be better off if everyone fails forward together.”

To learn more about Servus Credit Union, check out their website here.