MinisterHedgehogPerson993
QUESTION 1 : What is Vancity’s competitive advantage over other…
QUESTION 1 : What is Vancity’s competitive advantage over other types of financial institutions?
QUESTION 2: Which of the four functions of management does Vancity appear to be doing quite well? Draw from the case to support answer.
ARTICLE BELOW: VANCITY KEEPING EMPLOYEES HAPPY AND HEALTHY
What makes a great organization? If winning multiple national awards is a positive sign, Vancity is definitely on the right path! What does Vancity do to receive all of these accolades? Making decisions based upon company values is where Vancity starts.
Vanity, a values-based financial co-operative, is based in the Coast Salish and Kwakwaka’wakw territories, and has 60 branches located across British Columbia. This cooperative was founded in 1946 and it began with only $22 in total assets, aiming to lend money to those the banks ignored. How have they managed to succeed while still remaining true to their values?
Today, it is Canada’s largest credit union, with over 2,600 employees and more than $28 billion in assets. As a member-owned credit union, it provides a complete range of financial services to its 543,000 member-owners. Vancity continues to be committed to its original purpose and values: working with people and communities to help them thrive and prosper, all the while operating with integrity, innovation, and responsibility.
Vancity acknowledges that having a healthy and committed workforce is the reason it is able to sustain productivity and financial success within a competitive industry. Vancity provides its employees with the opportunity to help set corporate policies and procedures that affect both their work and home life. At work, employees enjoy business casual dress, listening to music while they work, participating on Vancity sports teams, and attending a host of social events. Vancity has family-friendly programs as well. For example, the cooperative understands that if an employee has a young child, it may be necessary to structure a workday that allows for flexibility. This positive approach recognizes the challenges of balancing work and life commitments and empowers employees to create the right environment to thrive at both.
The organization offers several alternative work options, including telecommuting, flexible hours, shortened workweeks (fewer hours with less pay), and compressed workweeks. Employees are given full pay for working 35 hours a week. Vancity is also the largest Canadian employer to become a “living wage employer.” This program recognizes the social and economic benefits of paying a living wage for all its employees and service providers.
Over the years, primarily driven by its employees’ desire for personal development, Vancity has initiated a number of healthy lifestyle programs, such as working with employee assistance program (EAP) providers to help employees develop personal plans for health and wellness.
Vancity offers a competitive pay and benefits program that includes dental and life insurance, three to six weeks of annual vacation, maternity and paternity leave top-ups, and care days that can be used for personal and family illness or injury. Other rewards include tuition reimbursement, retirement planning, and reduced rates on personal financial services such as mortgages and loans.
Employees also have the chance to attend Vancity’s cooperative studies program in Italy, where co-ops are well established.
Vancity has a young corporate culture – the average age of its employees is 41, and 94 percent of its new recruits are under 40. Even one of its longest-serving CEOs, Tamara Vrooman, was only 39 when she took the helm in 2007. Tamara Vrooman believes that “banking has a vital role in developing a healthy society- building the well-being of people and, at the same time, ensuring the long-term sustainability of the communities in which they live and work.”
The cooperative once threw a party for 2,200 employees and guests, with hip-hop dancers and a slam poet entertaining the crowd until 3 a.m. Young employees organized the event for their peers.
“We’re interested in creating energy, we’re interested in having people connect,” Vrooman says. “And young people tell us that’s an important part of the entire employee experience that they come to Vancity to enjoy.”
Keeping the organization happy
Vancity uses a triple bottom line business model; it is driven to achieve financial success but also focuses on environmental and social sustainability. Vancity is in a healthy financial position, with rising membership, because it takes an innovative approach in serving the financial needs of its members. It was the first Canadian financial institution to offer mortgages to women, the first to use traditional media to market directly to the gay and lesbian community, the first North American credit union to receive an 1 rating from the Dominion Bond Rating Service, and the first financial institution to offer its own socially responsible mutual fund.
Vancity’s vision to achieve positive social change has succeeded through a number of programs, including one called Shared Success. Through this program, Vancity gives back each year a significant portion of net profits (generally 30 percent) to members and to communities. Since the program was introduced, a total of $287 million has been shared with members and redistributed as community grants and other funding initiatives. One of the positive changes supported is called Modo the Car Co-op, a program which has 8,000 members sharing 300 cars, trucks, and vans throughout metro Vancouver. Vancity provided the first grant for the co-op’s intial plug-in hybrid vehicles. Thanks to the success of the pilot program, 11 percent of Modo’s fleet is now hybrid or fully electric.
A focus on giving back to the community makes decision-making in a credit union more challenging, since maximizing shareholder profit is not the only goal. Vancity managers take leadership training in values-based decision-making. An employee survey found that 95 percent of Vancity workers said they feel great about the organization’s corporate social responsibility approach.
Starting in 1995, before doing so was popular, Vancity focused on its own environmental performance. Vanity achieved its target of being the first carbon-neutral North American -based financial institution. Through its climate change strategy, Vanity has supported innovative partnerships involving public transportation and green building projects. It also invests in organizations doing climate change work. The organization is also a strong supporter of women. For example, on its recent board of directors, six of 10 directors, including the chair, were women.
The credit union also focuses on critical challenges facing the Vancouver community. Looking specifically at single-room occupancy (SO) housing, the “shelter rate” in British Columbia, which is the amount the provincial government pays directly to landlords on behalf of welfare recipients, is set at $375 per month and has not increased since 2007. In a city as expensive as Vancouver it is nearly impossible to find housing at this rate. This shelter rate also provides too little income for landowners who want to maintain their buildings in good condition. As a result, landlords have been renovating SRO buildings using borrowed money and increasing their rents when the projects are complete. So Vancity faced a dilemma: Should it lend money to help improve living conditions and accept the fact that people will be priced out, or not lend money for such projects and protect shelter-rate housing even if it is substandard? Vancity chose the second option. This has resulted in many challenging conversations. Christine Bergeron, the vice president of community business, says that the decision has not stopped Vancity from being an advocate for low-cost shelter by working with groups to find innovative alternatives and also encouraging the government to increase the shelter rate. Vancity believes it is possible to achieve better living conditions without running the risk of pricing individuals out of housing.
Today this financial institution continues to look for ways to improve. For example, during the COVID crisis, Vancity decided to keep just one-third of its branches on full-service status. To manage through the crisis they organized their staff into rotating squads. Employees spent one week serving members in branches, one week taking client calls from their homes, and one week on paid leave.
This schedule was designed to reduce the risk of exposure and the stress associated with living through the pandemic. Vancity board chair Jan O’Brien said “The idea was to make it easier for people to go to work.
” Vancity core values are expressed directly through their actions.
