Why might SACU enter New Orleans—and how might we do so in ways that might improve the financial health of members there—as well as that of members in all the markets we serve?

The SACU Leadership Team attended the EMERGE Conference on June 15–17, toured four New Orleans wards on June 17, and participated in a micro-Blitz on June 18 at the Ashé Cultural Arts Center. 

Our objectives

• Seek fresh inspirations at the compelling edges of emerging financial services and New Orleans
• Explore new possibilities for SACU—imagining a host of ways SACU might engage with new members in New Orleans
• Conceive of small bets SACU might make in New Orleans to learn how it might best serve members there
• Align the Board’s aspirations and intentions with SACU leadership’s aspirations and intentions

Desired outcomes

• We have built meaningful and useful relationships with new partners in New Orleans.
• We understand the opportunities to improve members’ financial health in New Orleans more deeply.
• We have a clearer understanding of why we might expand to New Orleans, how we might go about doing so, and what we might do there.

We used a variety of Think Wrong Drills to leverage our learning and experiences gained from the conference and tour to imagine how SACU might better fulfill our mission to serve people of modest means.

All of us find ourselves on the predictable path of how things have been, how things are, and how they will be. This status quo is forged by the synaptic connections in our brains and our cultural beliefs, biases, orthodoxies, and assumptions.

But if you are not content with the predictable path, you dare to look beyond the status quo. You imagine different outcomes than the one the predictable path leads to. So how do you forge a bold path? How do you take the Einsteinian and Steve Jobsian leap into the uncertain and unknown?

Our best leaders and employees fight the powerful biological and cultural forces that conspire to force them back onto the predictable path. They find ways to blaze a bold path—and to resist snapping back to business as usual—when it matters most. 

To keep from losing to the norm, we need to be able to deflect from the status quo and protect ourselves from the biological and cultural forces trying to pull us back in.

The human brain is amazing. It locks in what we experience and learn on the fly. This learning builds neural pathways that enable us to make quick, shortcut decisions and to take action without thinking or having to relearn simple tasks. This is good. Imagine if we had to Google “How to brush my teeth” every morning.

The complications that arise from how we’re biologically wired are compounded when a collection of brains works this way. Group think becomes group belief. Group belief becomes dominant culture. What’s acceptable, normal, and expected conspires against anything that lies outside the shared beliefs, biases, orthodoxies, and assumptions of the organization, community, tribe, state, or nation.

If we want to go from A to Steaming Round Thing, we need to trick our brains. We need to let go of our beliefs, biases, orthodoxies, and assumptions. We need to start solving from a brand-new place. We need to unleash our inner Picassos.

There is an obsession—from schools, executives, and consultants—with best practices, optimization, ROI, and metrics. These have become the standard by which we’re told we should measure ourselves and our impact. 

When we are certain which problem to tackle, and we know how to solve it, Think Right Practices are useful. They help eliminate waste, improve quality, scale solutions, and increase productivity.

But Think Right Practices provide the answer to a very small subset of challenges—those for which we are certain of the problem and know the solution. Thinking right is wrong when we’re seeking solutions beyond the status quo.

When it comes to discovery, innovation, and changing the game, adopting the mindset of a scientist or an artist with a hypothesis is much more likely to yield insights and new possibilities than conventional, think right business practices.

To successfully navigate the uncertain and unknown, we need a new language, new frameworks, new techniques, and new tools.

Deflection Point
Beautiful Question

NOLA Tour
Tim Williamson Talk
Michael Hecht Talk
Michael Stone Talk
Allison Plyer Talk
 

MacGyver

Each talk and Think Wrong Drill produced valuable insight and useful output—a rich collection of ideas and insights to mine as SACU moves forward. 

Get Out:
NOLA
 

Talk:
Resilience 

Be Bold:
Deflection
Point

Talk:
Education & Oversight

Be Bold:
Beautiful
Question

Talk: 
Big Easy Data

Let Go:
MacGyver

Wrap:
Steve
 

We got out to see the worm’s-eye view of NOLA.

St. Bernard Project and Allison Plyer led us on a tour of four NOLA neighborhoods, including visits with residents and entrepreneurs, to give the team a feel for life on the ground for people of modest means—and to spot opportunities where SACU might be able to do work that matters.

We ended our tour at Cafe Reconcile for dinner and remarks from Derek, who shared the remarkable growth he has experienced through the programs offered to him, and the satisfaction he now gets from mentoring other young New Orleanians as they enter Cafe Reconcile.

Tim Williamson and Michael Hecht provided insights into NOLA economics, business dynamics, and safety.

We explored the difference SACU might make in the financial lives of people of modest means. 

We used Deflection Point—a Be Bold Drill—to take stock of the “Predictable Financial Path” for people of modest means, and to imagine a “Bold Path” that might lead to financial health.

From

Individual Experience

Struggling

Need for families to seek second and third jobs to supplement income

Wandering; empty; discouraged

Lack of trust

I am subject to government, which is aligned with the interests of business

No access; exclusion

Unaware of options and opportunities

The 1% take a lot, but it never trickles down to me

Big unresponsive legacy financial institutions that don’t understand my needs

Economy

Slow growth; no growth

Unconscious capitalism widens the wage and opportunity gap; widening the wage gap; economic division

Lack of financial assistance

Don’t understand credit unions and banks

Poor job prospects

Constraints on growth of small business and entrepreneurship in LMI assets

Huge growth followed by gradual decline

Asymmetric migration of working middle class to low/high

Economic disparity and segregation get worse, creating a downward spiral and lost generation

Lifeless; stagnation; shrinking

Families lack capital

Society

Inequity: Increased income inequality; growing wealth gap; middle class becomes poorer; growing poor; no middle class; Haves vs. Have Nots; racial divide widens (jobs, wealth, health, education); continuing financial polarization of society; we’ve made racial progress, but there are still deep structures and the playing field is not level; segmented education; social injustice; fractured, no sense of community

Lack of Solutions: No real solutions to key problems: affordable college; gentrification; education; the socioeconomic needs of the unbanked and underserved are not being met

Uneducated: Financial education is much needed, i.e., savings habits, long-term planning, and asset building; many people will remain financially uneducated

Harmful Behavior: Lack of thrift; Lack of preparation for the future

Unsustainable: Dependent on outside funding and charitable giving for help; nonprofit organizations proliferate but services are duplicates and organizations are not sustainable

Negative Consequences: Decline of health; increased crime; high rate of violent crime persists; environmental degradation 

Little Opportunity: Fewer options for the underbanked; less opportunity for future generations

NOLA: What happens to the future generations of NOLA? All successes created post-Katrina will be undermined without greater equity and opportunity for all. Dysfunctional schools; New Orleans’ continued growth could stall without access to additional financial services and resources; NOLA won’t continue to develop and grow

SACU and Financial Services

Our front line staff needs to know how to increase their own financial capability so they can help our members increase theirs.

Products are designed to meet old, traditional needs—not new, emerging needs.

Declining credit scores; current credit scoring isn’t working for qualifying those who have the means to repay but have non-traditional income or credit history

Too much focus on the bottom line instead of focus on helping people

No growth; no innovation; no new innovation because no need

Not motivated to do better

Lack ability to get out of our own space and into another’s experience

Less competition; lack of competitive financial products

Growth and innovation will taper down

To

Individual Experience

Thriving

Financial independence; financial knowledge; financial freedom

More balanced life

Trusting financial institutions; trust in the financial system; less fear of system; someone I trust with my financial situation

Life altering; empowering; encouraging

Children’s children’s financial success

Kids can go to college without mortgaging their (and their parents’) future

Full financial engagement; improved credit scores; access to credit; saved for the future; productive assets

Economy

More successful small businesses

Society

Closing division between the Haves and Have Nots

No Us vs. Them

Accessibility for all

Educated and confident middle class; education is the norm, not the rule

Creating jobs

Homeowner options for all

Families stay together

Community soundness

A healthy retirement is available to everyone

People who can manage their finances for the long term

Next generation is better off than their parents

Our kids means all kids; more children have access to higher education; better education and access; good education for all

Better physical and social health; better financial health

Each person defining their success and achieving their goals on their own

Employer/Employee relations are robust and without stress

People live within their means

Generational relationships

We are financially resilient

SACU and Financial Services

Student-run credit unions in schools

Our values spread to other industries

No-judgment zone

Giving someone a first-time home loan

Financial rehab for the hopeless

Easier access to financial products

Giving people financial options

Limiting anxiety and fostering opportunity to achieve dream

Credit equality

Savings and credit flow with purpose

Global model for community finance

Disrupting the market

Get to know the people who need the most help and involve them in the process

Behaviors and Mindsets

• Taking action
• Trust and respect
• Dialogue
• Awareness
• Start listening
• Creativity
• Thrift
• Mental model shifts ≠ Character issue
• Inclusion vs. Exclusion

Society

• Changing traditional context
• Social capital generating and reintegrating into the community

Partnerships and Relationships

• Partnering; community partnership; global partnerships creating synergies with other organizations
• Honest involvement; true community involvement; community inclusiveness
• Relationship-based products; building relationships; cultivating intimate and trusting relationships

Technology

• Financing startups in technology
• Accessible, world-class technology access
• Leveraging current platforms

Financial Models

• Developing paths to approval
• Nonconventional lending programs

Financial Services

• People over policy­; policy focused on opportunity
• Product simplification
• Programs to turn knowledge into behavior change
• Education
• Self-service 24/7
• Good lendership
• Gamification
• Building clear pathways forward
• Access to working capital
• Attracting talent­­­

Michael Stone shared the story of education and the shift to local oversight in NOLA.

We let the questions raised by our opportunities and challenges focus us on how SACU might make a difference.

We used Beautiful Question—a Be Bold Drill—to ask “Why?” questions, disruptive “What if?” questions, and bold “How might we?” questions regarding the challenges and opportunities of serving people of modest means in communities such as New Orleans.

Team 1

Challenge & Opportunity

Increase equitable access to capital

Why?

Why can’t we raise outside capital?

Why do we have to factor risk?

What if?

What if we didn’t need to be repaid?

How might we?

How might we maintain and sustain?

How might we find capital to lend?

Team 2

Challenge & Opportunity

Can SACU handle it?

Why?

Why do we think we can make a difference?

Why does this opportunity fit our mission?

What if?

What if we partnered with Hope?

What if we partnered with local financial institution?

How might we?

How might we identify complementary partners with whom our values align?

Team 3

Challenge & Opportunity

Connecting to the community and building trust

Become part of the community

Why?

Why is SACU coming to New Orleans?

Why NOLA?

What if?

What if New Orleans became a prototype for a national model?

What if we merged with a New Orleans credit union?

How might we?

How might we establish a governance model for the prototype?

Team 4

Challenge & Opportunity

Be a part of a new movement by partnering with another change agent

Demonstrate success that transforms members’ lives

Transform traditional financial institutions (banks) to cooperative ownership

Why?

Why can’t everyone have access to financial services?

Why can’t people working full time afford housing?

Why aren’t there ways for people to get back into bank accounts despite past issues?

What if?

What if we offered shared equity models for gentrifying areas?

What if we turned equity completely upside down (good reverse)?

What if we loaned money through character references only?

What if the credit score system didn’t exist?

How might we?

How might we offer credit to everyone?

How might we get to really know our members beyond their current questions or needs?

Team 5

Challenge & Opportunity

Ensure that all New Orleanians have the opportunity to thrive

Provide financial empowerment to those who need it

Provide access to financial institutions in underserved areas

Why?

Why might the SACU model be strong enough and innovative enough to matter in New Orleans?

Why do we think we have the capability to do this?

What if?

What if we disrupted the entire credit union market?

What if we became another type of financial services provider?

How might we?

How might we prove profitability in the disruptive market?

How might we partner and align to achieve specific missions?

How might we collaborate with other CSFI members to provide “new” financial services?

Allison Plyer helped quantify the quality of life in NOLA and provide the data behind what we had seen on our Get Out Tour of NOLA.

MacGyver

We used MacGyver—a Let Go Drill—to generate ideas for our “How might we...?” questions.

Team 1

How might we maintain and sustain?

How might we find capital to lend?

NOLA Resources

• Willing partners in NOLA
• Structural building skills
• Lots of entrepreneurs

SACU Resources

• Managerial disciplines and values

Ideas

• Government and institutional grants
• GoFundMe
• Competition for new ideas
• Competition between the Spurs and Pelicans Foundations
• Design better systems
• Team up with other credit unions
• Tax-free contributors (willing partners)
• Market SACU to banks to “sell” CRA credits
• Turn borrowers (entrepreneurs) into businesses that SACU buys an equity position in

Team 2

How might we identify complementary partners with whom our values align?

SACU Resources

• Our brand values
• We know people in NOLA
• Manufactured housing

Ideas

• New models of equity
• Use our research resources to frame innovation
• Callahan change agents
• Clarity on our business values will enable us to find good matches with other organizations
• Relationships in New Orleans will help us make local connections in terms of organizations and community leaders
• Manufactured housing can be a solution to housing replacement in New Orleans
• Partner with Clinton Initiative to develop new criteria for manufactured homes 

Team 3

How might we establish a governance model for the prototype?

NOLA Resources

• Community connections
• Political connections

Unexpected SACU Resources

• Mindset of what’s possible
• No loyalty to the way things have always been done

Ideas

• Assist with developing trust from community
• Recruitment of local talent (management and staff)
• Advisory Board Model—from multiple segments of community
• Development of intern opportunity

Team 4

How might we offer credit to everyone?

How might we get to really know our members beyond their current questions or needs?

NOLA Resources

• National attention and resources
• Openness to change and innovation
• Resilient people
• Large untapped workforce of the unemployed (requires training)
• Improving education system
• Entrepreneurial base
• Word of mouth

Unexpected Resources

• Network of community partners willing to collaborate

Ideas

• Live among our members and partners—hire local
• Create a consumer lending model with local businesses
• Approach a community leader and ask for a referral of someone who needs their home improved and cannot get a loan
• Build a lending circle model
• Develop local training programs to bridge high school to work
• Partner with hospitality investors to focus on employees in the sector
• Focus on housing and transportation needs of individuals
• Use CDFI grants for funding and increasing savings

Team 5

How might we partner and align to achieve specific missions?

How might we collaborate with other CSFI members to provide “new” financial services?

NOLA Resources

• Entrepreneurs
• Data collected by the city
• Open minds

Ideas

• Use data to learn about the people we want to serve
• Bridge loans to support DBE
• Find ways to say YES instead of ways to say NO

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