Vancity - Org Analysis

Table of Contents
Table of Contents...............................................................................................................1
Executive Summary:..........................................................................................................2
Vancity Company Overview:..............................................................................................3
Organizational Strategies: Analysis of Vancity’s Strategic Goals and Effectiveness.........6
Classification According to Miles and Snow................................................................8
Analysis of Vancity's Strategic Fit within Porter's Model.............................................9
Assessing Vancity’s Organizational Effectiveness....................................................12
Analyzing Vancity’s Organizational Effectiveness.....................................................18
Organizational Structure: A Vancity Analysis...................................................................19
Pros and Cons of Vancity's Organizational Structure...............................................20
Summary of Products and Services Provided by Vancity.........................................21
External Environment......................................................................................................22
STEEP Analysis:.......................................................................................................23
Internal Environment........................................................................................................27
International Environment – Organizational Design........................................................31
Information Technology and Control Systems of Vancity.................................................32
Organization Size, Life Cycle, and Possible Decline of Vancity......................................35
Stages of Life Cycle Development............................................................................36
Organizational Culture of Vancity.....................................................................................39
Organization Culture from Strategy Focus and Environmental Needs.....................40
Ethical Values of Vancity..................................................................................................42
Innovation and Change....................................................................................................45
Decision Making Processes.............................................................................................50
Conflict, Power, and Politics in Vancity............................................................................52
Key Findings & Summary Recommendations:................................................................54
References.......................................................................................................................56
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Executive Summary:
Vancouver City Savings Credit Union (Vancity), established in 1946, is Canada's largest
community credit union, offering a broad spectrum of financial services.1 Vancity operates with a
deep commitment to environmental sustainability, social justice, and financial inclusion,
reflecting in its diverse offerings from retail and business banking to investment and advisory
services.2 With 54 branches across key regions and a membership exceeding 560,000, Vancity
manages assets totaling $33.2 billion. The cooperative's innovative approach includes profit
sharing, with 30% of profits returned to members and communities, amounting to over $444.4
million since 1994.3 As a pioneer in ethical banking, Vancity was the first Canadian financial
institution to join the Net-Zero Banking Alliance, aiming for net-zero emissions by 2040 across
all loans and mortgages.4 Vancity operates with an organizational structure, strategic vision, and
commitment to leveraging financial mechanisms for the broader good, setting a benchmark for
responsible and inclusive banking.
This organizational analysis of Vancity aims to provide a comprehensive overview of its strategic
positioning, operational effectiveness, and the alignment of its organizational structure with its
overarching mission and values. As Canada's largest community credit union, Vancity is
recognized for its commitment to social responsibility, environmental sustainability, and financial
inclusion. This analysis delves into how Vancity's unique cooperative model, product and
service offerings, and community-focused initiatives support its vision of a transformed economy
that benefits all stakeholders. By examining Vancity's strategies, governance, and performance
metrics, the analysis offers insights into the credit union's strengths, challenges, and
opportunities for growth, underscoring its significant role in the financial sector and its potential
to influence positive societal and environmental change.
The key findings of the report on Vancity underscore its robust financial health, innovative
approach to banking, and unwavering dedication to community welfare and environmental
sustainability. Despite the challenges posed by economic fluctuations and the competitive
landscape, Vancity has maintained strong financial performance, highlighted by significant asset
growth, a solid membership base, and a diverse range of financial services tailored to meet the
needs of various stakeholders. The analysis reveals Vancity's strategic adaptability, effective
governance, and successful implementation of sustainability initiatives, positioning it as a leader
in ethical banking. Furthermore, Vancity's emphasis on social equity, inclusivity, and the
cooperative model exemplifies its pioneering role in driving systemic change within the financial
sector, reinforcing its commitment to creating a more equitable and sustainable economy.
As Vancity moves forward, it stands on a strong foundation of financial resilience, community
engagement, and a clear vision for sustainable and inclusive banking. The findings of this report
highlight Vancity's potential to further solidify its leadership in the credit union sector by
capitalizing on its strengths, such as its strong member base, innovative financial products, and
commitment to social and environmental values. To navigate future challenges and seize
emerging opportunities, Vancity will benefit from continuing to evolve its digital offerings,
enhancing member experiences, and deepening its impact on societal and environmental
causes. The cooperative's proactive approach to addressing global issues, such as climate
change and financial inequality, positions it as a model for responsible banking. By adhering to
its values and leveraging its collective strengths, Vancity is poised to drive meaningful change,
1
Canadian Credit Union Association. (2023). The Largest 100 Credit Unions - 2Q 2023, pg. 2.
2
Vancity. (2023). Vancity at a glance.
3
4
Vancity. (2022). Annual Report, pg. 21
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demonstrating the power of finance as a force for good in building a more equitable and
sustainable world.
Vancity Company Overview:
This general organizational

overview provides a snapshot of Vancity's
history, operations and financial
performance with data available current as
of 2022, highlighting its role as a significant
player in the financial sector in British
Columbia and Canada.
Vancouver City Savings Credit Union,

commonly known as Vancity, was
established in 1946, and stands as the most
prominent community credit union in
Canada.5 Vancity is incorporated under the
Credit Union Incorporation Act of British
Columbia and its operations are subject to
the Financial Institutions Act of British Columbia (“FIA”).6
Vancity was founded with a unique vision of mutual assistance and community support. As a
financial cooperative, Vancity prioritizes the welfare of its members and their communities, often
leading to unconventional approaches and taking calculated risks. This was evident even during
its formation, where it challenged the typical credit union practices of the time. 7
Credit unions in Canada originated in the early 20th century as a response to the banking
challenges faced by average citizens. Initially, these credit unions were formed around specific
common bonds like workplaces, trades, religious affiliations, or ethnic groups. The primary
concept was to offer loans based on
personal character rather than
financial status or property, providing
credit access to those affiliated with
these groups but excluding others.8
However, the idea of an inclusive,

community-based credit union in
Vancouver began to gain traction
among certain activists. This concept
proposed allowing any city resident to
become a member. Driven by a
strong belief in this inclusive model,
the supporters pursued their vision.
On September 28, 1946, 14
5
6
Vancity. (2022). Consolidated Financial Statements, pg. 13.
7
Vancity. (2023). Founding.
8
Omololu, E. (2024, February 5). The Ultimate Guide to Credit Unions In Canada 2024.
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individuals from Vancouver signed a charter to create such an institution, named Vancouver City
Savings Credit Union. Officially recognized on October 11, 1946, this credit union has grown to
become Canada's largest community credit union.
As a member-driven, community-focused financial cooperative, it boasts 54 branches across

Metro Vancouver, the Fraser Valley, Victoria, Squamish, and Alert Bay, with its main office
located at 183 Terminal Avenue, Vancouver, BC, on the land of the Musqueam, Squamish, and
Tsleil-Waututh Nations.9 It serves customers across Canada, mainly in British Columbia and
Ontario, offering business banking, Visa credit and prepaid card services, and foreign exchange
services.
This institution is parent to Vancity Investment Management Ltd. (VCIM) and Vancity Community
Investment Bank (VCIB), using its substantial assets to foster an economy that is both
environmentally sustainable and equitable. VCIB and VCIM, operating primarily from Toronto,
Ontario, are wholly owned subsidiaries of Vancity and federally incorporated and regulated by
the Office of the Superintendent of Financial Institutions (OSFI).
From a thorough review of the Vancity 2022 Annual Report, the vision, goals and objectives, and
strategies are clearly articulated:
Vision for a Transformed Economy10

Vancity envisions a transformed economy that protects the earth and guarantees equity for all.
This vision implies a commitment to environmental sustainability and social justice.
Vancity’s plans and actions are

clearly guided by strategies that
are in direct alignment with the
overarching vision, while being
deeply tied to corporate values
and the needs of the members
it serves, the communities each
location operates in, and the
employees who bring their best
to work every day. To achieve
their vision and goals, Vancity
has strategies to define how it
will get there.
 Member and Community Focus: Vancity's strategy is centered on improving financial health
and resilience for its members and communities. They aim to provide more access to
financial services and innovative sustainability solutions, especially for those who have
historically faced barriers to full and equal economic participation.
 Environmental Responsibility: They focus on enabling members to minimize their negative
environmental impacts and maximize positive contributions. This includes supporting
businesses that are climate resilient and competitive in the green economy.
 Profit Sharing: Vancity commits to returning 30% of its profits to members and communities,
emphasizing a triple bottom line approach where profits create positive impacts for people
and the planet.
9
10
Vancity. (2022). Annual Report, pg. 4.
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 Supporting Economic Development: Their strategy includes supporting economic
development that protects the planet, with a goal to bring greenhouse gas emissions
financed through loans and mortgages to net zero by 2040.
 Co-operative Identity: Emphasizing its identity as a co-operative, Vancity focuses on
maximizing value to members rather than profits to shareholders. This includes contributing
to strengthening co-operatives and leveraging opportunities to enhance community strength.
 Adapting to Changing Conditions: In response to challenges like inflation, rising interest
rates, and the effects of the COVID-19 pandemic, Vancity has adapted its operations and
implemented new policies to protect members and employees, aiming to be resilient and
support members through varying economic times.
The goals for 2023 and beyond include delivering enhanced products and services that
members need, driving social and systemic change, creating an inclusive and purpose-driven
internal culture, and maintaining strong, stable financial performance to support future
investments.
These elements of Vancity's vision, goals and objectives, and strategies reflect a commitment to
social responsibility, environmental sustainability, and a strong focus on the needs of their
members and the broader community.
The primary lines of Vancity’s business include retail and business banking, which encompasses
deposit-taking and lending, as well as commercial lending, investment, and advisory services.
Key Statistics:11
 Membership exceeds 560,000
individuals.
 Total assets and assets under
administration amount to $33.2 billion,
with direct assets at $28.3 billion.
 Vancity operates 54 branches and
employs 2,721 staff members.
Distinctive Features of Vancity:12

 Vancity's inception was driven by the goal of serving diverse financial needs.
 It offers a comprehensive suite of financial services to individuals, businesses, and non-
profits, including banking, investment, mortgage, loan, and credit card services.
 As a cooperative, it operates on a democratic model where each member has equal voting
rights.
 Committed to ethical banking, Vancity joined the Global Alliance for Banking on Values in
2010.
 The credit union redistributes 30% of its net profits to members and community projects,
totaling over $444.4 million since 1994.
 Recognized as one of Canada's Top 100 Employers by The Globe & Mail, Vancity is a
significant private-sector proponent of the Living Wage in Canada.
 Vancity has pioneered several firsts in the Canadian financial sector, including becoming the
first carbon-neutral financial institution.
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12
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 In April 2021, it led the way as the first Canadian financial institution to join the Net-Zero
Banking Alliance, reinforcing its commitment to a sustainable and equitable future with a
target to achieve net-zero emissions by 2040 in all mortgages and loans.
Products and Services:13

 Retail and Business Banking: This includes traditional banking services such as deposit-
taking and lending.
 Commercial Lending: Providing loans and financial assistance to businesses.
 Investment and Advisory Services: Offering investment options and financial advice to
clients.
 Visa Credit and Prepaid Card Services: Issuing Visa credit cards and prepaid cards.
 Foreign Exchange Services: Facilitating currency exchange and related services.
Key Financial Figures:14

 Interest Income: $838,973,000 in 2022.
 Net Interest Income: $478,619,000 in 2022.
 Fee and Commission Income: $135,723,000 in 2022.
 Net Fee and Commission Income: $108,096,000 in 2022.
 Total Operating Income for 2022: $561,003,000.
 Income before Tax: $87,885,000 in 2022
 Net Income: $73,516,000 in 2022
Organizational Strategies: Analysis of Vancity’s Strategic Goals and Effectiveness
This section provides a comprehensive analysis of Vancity’s goals and objectives, applying
theoretical frameworks from strategic management to evaluate the organization's strategic
goals, orientation, effectiveness, and operational dynamics. This analysis aims to offer both
theoretical insights and practical recommendations.
This section delves into the strategic goals and objectives of Vancity and evaluates the
effectiveness of the strategies they have implemented to achieve these goals.
Vancity’s Goals and Objectives

From its 2022 Annual Report, Vancity has identified the following goals and objectives:
1. Member and Community Welfare:
Vancity's strategic focus is centered on the welfare of its members and communities. This
goal aligns with its cooperative ethos, aiming to provide long-term value creation for its
stakeholders.15
2. Environmental Responsibility:
The credit union is committed to environmental sustainability, with a specific objective of
achieving net-zero greenhouse gas emissions in its operations.16
3. Financial Stability and Growth:
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Ensuring strong, stable financial performance is a key goal, supporting investments for
future growth and enabling greater community impact.17
Strategies to Achieve These Goals

To achieve these goals, Vancity is implementing the following strategies:
1. Refreshed Post-COVID-19 Outlook:
In response to the pandemic, Vancity adopted a new strategy in 2020, adjusting operations,
implementing new policies, and preparing for various operating environments to support its
members and employees.18
2. Innovative Financial Products:
The development of innovative financial solutions, particularly those focusing on
sustainability, is a core part of Vancity’s strategy to meet its environmental and member
welfare goals.19
3. Community Investment:
Investing in community initiatives, particularly those strengthening Indigenous communities
and supporting climate action, is a strategic priority.20
Effectiveness of Strategies
In pursuit of its goals and objectives strategies, Vancity has shown strong financial performance,
indicating the effectiveness of its strategies in maintaining financial stability and growth. The
credit union's continued focus on member and community welfare, as evidenced by its
community investments and development of member-focused products, suggests effective
strategy implementation in these areas. And Vancity’s commitment to environmental
responsibility, including its initiatives for a net-zero transition and sustainable banking,
demonstrates progress toward its environmental goals.
Vancity's strategic alignment with its goals of member welfare, environmental sustainability, and
financial stability indicates a cohesive and effective approach. The credit union’s ability to adapt
and innovate, especially in response to external challenges like the COVID-19 pandemic,
underscores the effectiveness of its strategies.
3BC Recommendations:
 Continue the development of sustainable financial products to enhance Vancity’s
differentiation in the market,
 Increase investment in community projects, particularly those focusing on climate action
and social welfare, to strengthen Vancity’s community impact, and
 Enhance regular and transparent reporting on environmental targets to bolster Vancity’s
commitment to sustainability.
Strategic Orientation Analysis

Member and Community Focus
Vancity's strategy centers around member and community welfare. This approach is not only
altruistic but strategically positions Vancity for long-term value creation. This focus aligns with
the cooperative principles and ensures sustained member loyalty and community support,
crucial for long-term success in the financial services sector.
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20
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Environmental Responsibility
The credit union's commitment to achieving net-zero greenhouse gas emissions demonstrates a
proactive approach to environmental stewardship. This strategy not only mitigates future
regulatory risks but also appeals to environmentally conscious consumers, a growing segment
in the financial market.
Profit Sharing
Vancity’s strategy of sharing profits with members and communities is indicative of a
stakeholder-oriented approach. This initiative strengthens community bonds and enhances the
credit union's reputation, translating into a competitive advantage in the marketplace.
Adaptive Strategy to External Changes

The agility shown by Vancity, particularly in response to the COVID-19 pandemic, inflation, and
changing market demands, illustrates a strategic orientation that is responsive and flexible. This
ability to adapt is crucial in the volatile financial sector.
Operational Dynamics Analysis

Resilience and Adaptability
Vancity has demonstrated commendable resilience in the face of economic fluctuations. The
implementation of new policies in response to external challenges, such as the COVID-19
pandemic, underscores the credit union's commitment to protecting its stakeholders' interests.
Innovation Focus
The emphasis on developing sustainable financial solutions and products is a testament to
Vancity's innovative spirit. This approach not only caters to a niche market but also sets the
stage for future growth areas in finance, particularly in green banking and sustainable
investments.
Vancity’s strategic and operational approaches demonstrate a well-rounded and sustainable

model in the financial sector. To continue thriving, 3BC recommends that Vancity:
 Invest in Technological Innovation: Embracing digital transformation and fintech innovations
can provide a competitive edge in the rapidly evolving financial landscape.
 Maintain its Member-Centric Approach: Continued focus on member welfare will ensure
long-term loyalty and support.
 Enhance its Green Banking Initiatives: As environmental concerns become more prevalent,
expanding in this area will attract a broader customer base.
 Strengthen Community Engagement: Continued investment in community projects and local
initiatives will reinforce Vancity’s position as a community leader.
Classification According to Miles and Snow

Based on the above analysis, Vancity can be classified as an 'Analyzer' according to Miles and
Snow's typology. This classification is derived from the organization's balanced approach of
maintaining core stability while pursuing innovation and adaptability. Analyzers like Vancity are
known for their ability to operate effectively in stable environments while being capable of
responding to market changes with innovative solutions. Vancity’s strategic orientation as an
Analyzer, places it in a strong position to navigate the complexities of the modern financial world
while maintaining its commitment to members, community, and the environment.
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Analysis of Vancity's Strategic Fit within Porter's Model
Porter identified three primary strategies for competitive advantage: Cost Leadership,
Differentiation, and Focus.21
Differentiation Strategy
 Vancity’s operational ethos and strategic direction are strongly aligned with Porter’s
Differentiation strategy. This alignment is demonstrated by Vancity's commitment to
environmental sustainability and social responsibility, distinguishing it from traditional
financial institutions.
 The organization’s focus on achieving net-zero greenhouse gas emissions and significant
community investment is a testament to its unique market position, resonating with the
differentiation strategy's core attribute.
Focus Strategy
 Vancity exhibits characteristics of Porter's Focus strategy, particularly in its approach to
serving specific community segments. This strategy, subdivided into cost focus and
differentiation focus, involves concentrating on specific market niches.
 The credit union's tailored financial solutions for non-profit housing providers and initiatives
for Indigenous communities align with the focus strategy's emphasis on meeting the unique
needs of specific market segments.
Cost Leadership
 Vancity’s strategic priorities do not primarily align with the Cost Leadership strategy. Porter
describes cost leadership as focusing on being the industry's lowest-cost producer, which is
not a central goal of Vancity.
Implications
Vancity's competitive strategy predominantly aligns with Porter’s Differentiation strategy,
supplemented by elements of the Focus Strategy. Their commitment to environmental
sustainability, social responsibility, and innovative community-focused financial solutions
21
Porter, M. E. (1985).
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differentiates them within the banking sector. This unique positioning is critical in an era where
consumer values increasingly lean towards sustainability and social responsibility. To increase
competitiveness based on Porter’s competitive strategies framework 3BC recommends:
 Enhance Differentiation Features: Continuing to strengthen its sustainability and community-
focused initiatives will further differentiate Vancity in the market.
 Expand Focus Strategy Elements: By further developing targeted financial solutions for
specific community segments, Vancity can solidify its position within niche markets.
 Monitor Market Trends: Continual assessment of market trends will ensure that Vancity's
differentiation strategy remains aligned with evolving consumer preferences and societal
needs.
Vancity's Organizational Structure

It is crucial for 3BC to analyze Vancity’s organizational structure and design for several reasons:
 Understanding Vancity's structure helps assess how well its organizational design aligns
with its strategic goals. This alignment is key to achieving objectives such as financial
inclusion, environmental sustainability, and community engagement.
 An analysis of the organizational structure can reveal insights into the efficiency and
effectiveness of internal processes. This includes how resources are allocated, decision-
making flows, and how well various departments collaborate.
 Organizational design significantly influences company culture. For Vancity, which
emphasizes diversity, equity, and inclusion, understanding its structural impact on these
areas is vital.
 Identification of key areas within the organizational structure that may need adaptation or
improvement, especially in response to external market or environmental changes.
By analyzing the structure, 3BC can recommend changes or improvements to enhance overall
performance, employee engagement, and customer satisfaction; a thorough analysis enables
3BC to provide tailored recommendations that bolster Vancity’s ability to meet its strategic
objectives and enhance its operational effectiveness.
Leadership and Governance

Vancity's governance structure highlights a member-centric approach. The executive leadership
team is led by the President and CEO, with key roles such as Chief Equity and People Officer,
Chief Risk Officer, and others, indicating a diverse and comprehensive leadership structure.22
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Employee-Centric Approach
The credit union has an employee-focused organizational design, as evidenced by its enhanced
benefits plan, tailored financial advice, and inclusive employment practices. This approach is
geared towards creating an inclusive, supportive work environment, crucial for effective service
delivery and member satisfaction.23
Strategic Departments and Subsidiaries

Vancity's structure includes various strategic departments and subsidiaries, such as Vancity
Investment Management Ltd. and Vancity Community Investment Bank. These entities align
with the organization’s broader goals of social and environmental responsibility.24
Effectiveness of Vancity’s Organizational Design

 Alignment with Strategic Goals: Vancity’s organizational design is closely aligned with its
strategic goals of community welfare, environmental responsibility, and financial stability.
This alignment is evident in its governance structure and operational practices.
 Flexibility and Adaptability: The organization exhibits a flexible and adaptable structure,
responsive to changing market dynamics and member needs, as seen during the COVID-19
pandemic response.25
 Member and Community Focus: The credit union’s design effectively supports its focus on
members and the community, as demonstrated by its various community investment
initiatives and member-centric services.26
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Conclusion
Vancity’s organizational design is a reflection of its cooperative ethos and strategic priorities.
The structure facilitates effective governance, employee well-being, and member-centric
services, crucial for a financial institution with a strong community focus.
 Continuous Adaptation: As the market and member needs evolve, Vancity should continue
adapting its organizational structure to stay aligned with its strategic goals.
 Enhanced Digital Integration: Further integration of digital solutions in operations can
enhance efficiency and member experience.
 Strengthening Sustainability Initiatives: Amplifying efforts in sustainability and social
responsibility within its organizational design can reinforce Vancity’s position as a leader in
responsible banking.
Assessing Vancity’s Organizational Effectiveness

When assessing organizational effectiveness, it is critical to employ various models to capture a
comprehensive view of an organization's performance and capabilities. Such approaches
include the Resource-Based View (RBV), Internal Process Approach, Goal Approach, Balance
Scorecard and Integrated Effectiveness Model. This summary outlines why each of these
models is used and their unique contributions to evaluating organizational effectiveness.
Why use the Resource-Based View (RBV)

 Focus on Unique Resources and Capabilities: RBV emphasizes an organization's internal
resources and capabilities as sources of competitive advantage. Consultants use RBV to
identify and leverage unique assets, skills, or processes that can drive sustained success.
 Strategic Asset Analysis: This approach helps in analyzing how well an organization utilizes
its strategic assets, including human resources, intellectual property, and financial stability.
 Sustainability of Competitive Advantage: RBV is instrumental in determining the
sustainability and inimitability of an organization's resources, crucial for long-term strategic
planning.
Resource-Based View Analysis

 Valuable Resources: Vancity possesses valuable resources, including a committed
workforce, strong financial base, and deep community relationships. These resources are
crucial for delivering member-centric services and driving sustainable practices.
 Rare and Inimitable Capabilities: The organization’s community-focused approach and
commitment to social and environmental responsibility are rare and difficult to replicate.
These capabilities provide a competitive edge in the financial services sector.
 Exploitation of Resources and Capabilities: Vancity effectively exploits its resources and
capabilities to achieve strategic goals, such as member welfare, environmental
sustainability, and financial stability. This exploitation is evident in its strategic planning and
operational activities.
Conclusion and Strategic Implications

Vancity’s organizational design, viewed through the RBV framework, reveals a strategic
emphasis on leveraging its unique resources and capabilities to maintain a competitive
advantage. The organization's focus on human capital, financial stability, community
relationships, and innovation aligns with its strategic goals and enhances its market position.
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 Further Invest in Employee Development: Continuing to invest in human capital will enhance
service quality and innovation.
 Expand Community Engagement: Leveraging its social capital can further strengthen
Vancity’s community impact and member relations.
 Innovate in Sustainable Finance: Continued innovation in sustainable financial products will
solidify Vancity’s position as a leader in responsible banking.
Why use the Internal Process Approach

 Operational Efficiency and Process Optimization: This approach focuses on the efficiency of
internal processes, structures, and workflows, crucial for operational excellence.
 Organizational Health Assessment: It provides insights into the health of the organization,
including culture, communication, and internal relationships.
 Risk Management and Control: The internal process approach is essential for understanding
how effectively an organization manages and controls its internal risks and processes.
Internal Process Approach Perspective

Examining Vancity from an Internal Process Approach perspective, we can analyze and
integrate insights from Vancity's annual reports and focus on the internal processes that drive
organizational efficiency and effectiveness.
Vancity’s Internal Processes

 Internal Health and Efficiency: The Internal Process Approach emphasizes organizational
health and efficiency, focusing on the smooth operation of internal processes. Vancity's
diverse leadership structure and commitment to employee welfare suggest a strong internal
health.27
 Diversity and Anti-Racism Initiatives: Vancity's dedication to being an anti-racist
organization, including implementing recommendations from an external racial equity audit
and updating its diversity and inclusion strategy, reflects a focus on inclusive internal
processes.28
 Reconciliation with Indigenous Communities: Vancity's commitment to Reconciliation and its
initiatives like the Progressive Aboriginal Relations™ program certification process indicates
a focus on culturally sensitive and inclusive internal processes.29
 Financial and Operational Control: the organization's strong liquidity and capital adequacy
ratios, along with its approach to financial management, demonstrate robust internal
financial controls contributing to its efficiency. 30
Internal Process Approach Analysis

 Organizational Culture and Climate: Vancity's internal processes foster a positive work
climate and strong organizational culture. This approach is vital for ensuring employee
satisfaction and high productivity.
 Communication and Teamwork: the Internal Process Approach underscores the importance
of communication and teamwork. Vancity’s initiatives to engage employees in decision-
making and diversity programs align with this approach.
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 Operational Efficiency: the organization's internal financial and operational controls reflect
an emphasis on operational efficiency. This efficiency is crucial for resource optimization and
long-term sustainability.

Vancity’s internal processes, as analyzed through the Internal Process Approach, highlight the
organization's focus on operational efficiency, inclusive workplace culture, and strong internal
governance. These elements are critical for maintaining a healthy and efficient organization.
 Enhance Internal Communication: Strengthening internal communication channels can
further improve operational efficiency and employee engagement.
 Continuous Process Improvement: Regularly reviewing and improving internal processes
will ensure organizational efficiency and adaptability.
 Strengthening Organizational Learning: Investing in continuous learning and development
programs can enhance organizational culture and employee satisfaction.
Why use the Goal Approach

 Clarity on Objectives and Outcomes: This approach centers on the organization's ability to
set and achieve specific, measurable goals, offering a clear view of success and progress.
 Performance Measurement: It provides a straightforward metric for performance evaluation
based on goal achievement, aligning organizational efforts with desired outcomes.
 Strategic Alignment: The goal approach helps in assessing how well an organization’s
strategies align with its stated objectives, an essential factor for effective execution.
Goal Approach:
Applying the Goal Approach Model, we examine the goals and objectives of Vancity as outlined
in their annual reports. This approach focuses on how well an organization attains its explicitly
stated goals, providing a basis for assessing organizational effectiveness.
Vancity’s Stated Goals and Objectives

 Financial Health and Inclusion: Vancity prioritizes providing financial services and credit
access to underserved communities. This includes removing barriers stemming from
systemic exclusion affecting various groups.31
 Climate Commitments: The organization aims for net-zero emissions by 2040 across all its
mortgages and loans. This goal is part of a broader commitment to financing an equitable
climate transition.32
 Member and Community Well-being: Vancity focuses on better financial health and
resilience for its members and communities, emphasizing access to financial services and
sustainable solutions.33
 Operational Targets: The organization sets specific operational targets, such as operating
earnings, sustainable wealth management inflows, and net lending growth.34
 Organizational Culture and Social Impact: Goals include creating an internal culture valuing
diversity, equity, and inclusion, and driving meaningful social and systemic change.35
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Goal Approach Model Analysis
 Alignment with Stated Goals: Vancity demonstrates strong alignment with its stated goals,
particularly in financial inclusion, environmental sustainability, and community engagement.
 Effectiveness in Achieving Goals: The organization has been effective in reaching its
financial targets and progressing towards its environmental commitments. Its focus on
member and community well-being is evident through various initiatives and programs.
 Organizational Design and Goal Attainment: Vancity’s organizational design, including its
leadership structure, employee engagement practices, and community-focused approach,
supports the achievement of its goals.

Vancity's alignment with the Goal Approach Model highlights its effectiveness in setting and
pursuing clear, measurable goals. The organization’s design and operational strategies are well-
suited to achieving these goals, reflecting a strong commitment to member welfare,
environmental sustainability, and financial health.
 Enhanced Goal Tracking: Implementing more robust mechanisms for tracking and reporting
progress towards goals can further improve transparency and accountability.
 Continuous Goal Refinement: Regularly revisiting and refining goals to align with changing
market conditions and member needs will ensure ongoing relevance and effectiveness.
Why use the Integrated Effectiveness Model

 Holistic Organizational Assessment: This model combines elements of other approaches,
providing a comprehensive view of organizational effectiveness across various dimensions.
 Balanced Analysis: It offers a balanced analysis of internal processes, external adaptation,
resource management, and goal attainment, ensuring a multi-faceted evaluation.
 Strategic and Operational Insights: The integrated model provides insights into both the
strategic direction and operational capabilities of the organization, useful for both long-term
planning and immediate operational improvements.
Integrated Effectiveness Model

Utilizing the Integrated Effectiveness Model, we can provide an in-depth analysis of Vancity's
organizational design. This model combines various aspects of organizational effectiveness,
including internal processes, external adaptation, and resource management.
Analysis of Vancity’s Organizational Effectiveness

 Operational Efficiency: Vancity's efficiency ratio, a measure of operational expenses against
revenue, stands as a testament to its operational efficiency. In 2022, this ratio was 76.4%,
reflecting effective management of operating expenses.36
 Employee Engagement and Well-being: The organization maintains high employee
engagement and well-being, evidenced by its above-average engagement scores and
recognition as one of Canada’s Top 100 Employers in 2022. Initiatives like the Qualtrics
Employee Experience survey and mental health training for the management team
underscore its commitment to employee welfare.37
36
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 Financial Performance: Vancity demonstrated strong financial performance, with net income
before distribution and tax at $115.6 million in 2022. This robust financial health supports its
ability to invest in growth and adapt to changing economic conditions.38
 Community and Social Responsibility: The credit union's focus on diversity, equity, and
inclusion, particularly its anti-racism initiatives and support for Indigenous communities,
highlights its commitment to social responsibility and community engagement.39
 Adaptation to Market Changes: Amidst the challenges of inflation and changing interest
rates, Vancity adapted its operations and policies to support its members and employees,
demonstrating its ability to respond effectively to external environmental changes.40

Vancity's organizational design, viewed through the Integrated Effectiveness Model, reveals a
balance between internal efficiency, employee engagement, financial robustness, community
commitment, and adaptability to external changes. This balance is key to its sustained success
and competitive advantage.
 Continued Focus on Operational Efficiency: Maintaining and improving operational efficiency
will ensure long-term sustainability.
 Enhanced Employee Engagement Initiatives: Building on existing employee well-being
programs will further strengthen organizational culture.
 Community Engagement and Inclusivity: Continuing to invest in community initiatives and
inclusivity programs will enhance Vancity's social impact.
 Adaptive Strategies for Market Changes: Developing strategies that anticipate and respond
to market changes will ensure Vancity remains resilient and relevant.
Why use the Balanced Scorecard Model

 Comprehensive Performance Measurement: It goes beyond traditional financial metrics to
include performance indicators in areas such as customer perspectives, internal processes,
and learning and growth.
 Alignment of Business Activities: The model aligns business activities with the organization's
vision and strategy, ensuring that operational actions are consistent with long-term
objectives.
 Enhancing Strategic Communication: the model serves as an effective communication tool,
ensuring that employees at all levels understand the strategic goals and how their actions
contribute to achieving these objectives.
 Promoting Organizational Learning and Growth: The learning and growth perspective of the
Balanced Scorecard emphasizes the importance of employee training, development, and
knowledge management. By focusing on these areas, organizations can cultivate a culture
of continuous improvement and innovation.
Balanced Scorecard Model Analysis

Applying the Balanced Scorecard Model to Vancity, we can ascertain the effectiveness of its
organizational design in four key areas: financial performance, customer perspectives, internal
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39
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processes, and learning and growth. This holistic approach offers a comprehensive view of
Vancity's operational and strategic efficacy.
Financial Performance:
 Vancity demonstrated strong financial results in 2022, with net income after tax of
$73.516M41, exceeding targets for operating earnings and net lending growth. This indicates
effective financial management and robust economic performance, despite challenging
market conditions42
 The measure of Return on Average Members’ Equity (ROME) was slightly below the target
but remained strong, reflecting prudent financial stewardship.43
Customer Perspectives:
 Vancity is committed to serving its members by providing essential products, services, and
advice. In 2022, the overall service delivery satisfaction rate among members was high,
although it experienced a slight decrease from the previous year.44
 The organization is continuously adapting to member needs, as evidenced by the opening of
new branches and enhancement of digital banking experiences.45
Internal Processes:
 In response to the COVID-19 pandemic and changing economic conditions, Vancity
refreshed its strategy and adjusted operations, demonstrating agility and effective internal
process management.46
 The organization's focus on strengthening internal processes has contributed to its
resilience and ability to support members through challenging times.47
Learning and Growth:

 Vancity emphasizes creating an internal culture that values diversity, equity, and inclusion.
This focus on human capital development is crucial for long-term organizational success
and employee satisfaction.48
 The organization's commitment to driving social and systemic change aligns with its goals of
continuous learning and growth, positioning it as a transformative and forward-thinking
institution.49

Vancity's organizational design, assessed through the Balanced Scorecard Model,
demonstrates strong performance across financial metrics, customer satisfaction, effective
41
42
43
44
45
46
47
48
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internal processes, and commitment to learning and growth. This balanced approach
underscores Vancity’s resilience, adaptability, and commitment to its members and community,
ensuring its continued success in the financial sector.
3BC Analysis and Recommendations:

 Enhance Digital Member Engagement and Service Delivery: Vancity's customer perspective
analysis revealed a high level of member satisfaction with overall service delivery, but with
room for improvement in digital experiences.
o Invest in advanced digital banking technologies to enhance member experience,
focusing on user-friendly interfaces, seamless online transactions, and robust
customer support in digital channels.
o Develop and implement a digital engagement strategy that includes personalized
financial services and advice, leveraging data analytics for tailored member
experiences.
 Strengthen Financial Performance Stability Amid Market Volatility: While Vancity showed
strong financial performance in 2022, market unpredictability and external economic
pressures were notable concerns.
o Diversify investment and lending portfolios to reduce risk exposure, focusing on
sectors that are resilient to market fluctuations.
o Implement financial resilience strategies, including contingency planning and
adaptive financial modeling, to navigate and mitigate risks from economic
uncertainties effectively.
 Foster Continuous Learning and Innovation Culture: Vancity's commitment to social and
systemic change, along with its emphasis on diversity, equity, and inclusion, points to the
potential for fostering a culture of innovation and continuous learning.
o Develop and execute an organization-wide learning and development program
focusing on continuous improvement, innovation, and sustainability.
o Encourage a culture of innovation by instituting internal innovation labs or think
tanks, where employees can collaboratively develop new ideas and solutions,
particularly in sustainable finance and community development.
Analyzing Vancity’s Organizational Effectiveness

Examining Vancity through a Resource-Based View (RBV) lens, we can analyze the
organization's resources and capabilities, and how these contribute to its competitive advantage
and strategic goals.
Vancity’s Key Resources and Capabilities

 Human Capital: Vancity's workforce is a critical resource. The organization has implemented
comprehensive employee engagement and welfare programs, indicating a strong emphasis
on human capital as a strategic asset.50
 Financial Stability: The credit union's financial health, characterized by robust liquidity and
capital adequacy ratios, represents a significant resource. This financial strength enables
Vancity to support growth and withstand economic fluctuations.51
50
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 Community Relationships and Social Capital: Vancity’s community investment initiatives and
partnerships reflect its substantial social capital. This resource enhances its reputation and
strengthens member loyalty.52
 Innovative Product Development: The organization's focus on developing innovative
financial products, especially those promoting sustainability, demonstrates a capability for
innovation aligned with market demands.53
Organizational Structure: A Vancity Analysis
Overview
Vancity’s organizational structure demonstrates a hybrid approach54 integrating elements
of traditional hierarchical models with innovative, flexible frameworks tailored to its mission and
operational needs.55 This structure supports Vancity's strategic objectives by balancing
efficiency with adaptability, member engagement, and community impact.
Although Vancity's organizational structure incorporates elements from various traditional
structures, it does not fit neatly within the confines of purely functional, divisional, geographic, or
matrix models due to its unique operational needs and strategic objectives. 3BC identified why
Vancity's structure diverges from these classic organizational models:
Functional Structure56
Why Not Purely Functional: Functional structures are characterized by clear departmentalization
based on expertise. While Vancity does have functional specialization, especially in its
leadership team overseeing different strategic areas, its emphasis on cross-functional teams
and networked approaches to address community and member needs goes beyond the siloed
operations typical of a purely functional structure.
Divisional Structure57
Why Not Purely Divisional: Divisional structures are organized around products, services,
markets, or geographic locations. Vancity does segment its operations into strategic business
units like VCIM and VCIB, which resembles a divisional approach. However, its structure is
more integrated, focusing on overarching goals of social responsibility and financial inclusion
rather than operating as separate, profit-centered divisions.
Geographic Structure58
Why Not Purely Geographic: Geographic structures are designed to address the specific needs
of different locations or regions. While Vancity serves various communities across British
Columbia, its organizational design transcends geographic demarcation by fostering a cohesive
approach to community banking, environmental sustainability, and social equity across all
locations, not optimizing for regional autonomy.
52
53
54
Daft, R. L., & Armstrong, A. (2015), pg. 123.
55
56
57
Daft, R. L., & Armstrong, A. (2015), pgs. 105-108.
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Matrix Structure59
Why Not Purely Matrix: A matrix structure combines two or more types of organizational
structures, typically functional and divisional, to leverage the benefits of both. While Vancity
exhibits matrix-like qualities, such as blending functional expertise with project-based or
thematic teams, it does not fully adopt a matrix structure's dual hierarchy. Instead, Vancity
prioritizes a more fluid, collaborative model that supports its mission-driven objectives without
the rigid dual reporting lines found in matrix organizations.
Why Vancity's Hybrid Structure Differs From Other Structural Models

Vancity’s commitment to social responsibility, community engagement, and financial inclusion
necessitates a unique organizational design. Purely hierarchical models60 may lack the flexibility
and innovation needed for Vancity’s community-focused initiatives, while entirely flat/horizontal61
or networked/modular models62 might not provide the stability and control required for financial
institutions. The hybrid structure optimally supports Vancity’s dual mission of financial
performance and social impact.
Definition of Vancity's Hybrid Structure

Vancity operates under a hybrid organizational structure that combines elements of functional,
matrix, and networked models.63 The structure is characterized by:
 A clear hierarchical leadership, led by the President and CEO, overseeing various Chief
Officers.
 Division into strategic business units like Vancity Investment Management Ltd. and
Vancity Community Investment Bank, allowing specialization and focus on specific
community and financial goals.
 An emphasis on cross-functional teams and virtual networks to foster innovation,
collaboration, and flexibility.
Pros and Cons of Vancity's Organizational Structure

Pros:
 Flexibility and Responsiveness: The hybrid structure enables Vancity to adapt quickly to
changing market conditions and member needs, crucial for navigating the volatile
financial sector.
 Specialization: Strategic business units allow for focused expertise in key areas like
investment management and community banking, enhancing service quality and
operational effectiveness.
 Innovation and Collaboration: Cross-functional teams and virtual networks facilitate
innovation and collaborative problem-solving, key for developing new financial products
and services.
Cons:
 Complexity: The hybrid model can introduce complexities in coordination and
communication, potentially slowing decision-making processes.
59
60
61
Daft, R. L., & Armstrong, A. (2015), pgs. 97,117,120.
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 Resource Allocation: Balancing resources between different units and initiatives can be
challenging, risking dilution of effort or misalignment with strategic priorities.
 Cultural Consistency: Maintaining a unified organizational culture across diverse teams
and units requires continuous effort and strong leadership.

Vancity’s hybrid organizational structure is instrumental in its success as a community-focused
financial institution. While it offers significant advantages in flexibility, specialization, and
innovation, it also presents challenges in complexity and resource allocation. By addressing
these challenges with targeted strategies, Vancity can continue to lead in social responsibility
and financial inclusion, maintaining its competitive edge and community impact.
 Enhance Communication and Coordination: Implement advanced communication tools and
regular cross-unit meetings to improve coordination and reduce complexity.
 Strengthen Culture Across Units: Develop programs and initiatives that reinforce Vancity’s
core values and mission across all units, ensuring a consistent culture of inclusivity,
sustainability, and member focus.
 Evaluate and Streamline Processes: Regularly review internal processes for efficiency and
effectiveness, streamlining where possible to reduce redundancies and enhance agility.
Summary of Products and Services Provided by Vancity

Vancity offers a wide range of financial products and services tailored to meet the diverse needs
of its members and communities. These offerings are designed to promote financial health,
inclusion, and sustainable development. Below is a brief summary of their key products and
services.
Consumer Lending Products and Services64

Consumer Banking Products:
 Savings and chequing accounts,
 Credit cards,
 Lines of credit,
 Residential mortgages65,
 Consumer loans66,
 Overdrafts,
 Vehicle loans, and
 Microcredit products.
These products aim to enhance financial health and inclusion by assisting members in
managing their financial obligations and improving their financial future.
Business Banking Portfolio67
64
65
66
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Loans and Mortgages68: Offered to small- and medium-sized enterprises (SMEs) across the top
10 industry sectors, including:
 Real estate activities,
 Construction,
 Financial intermediation, and
 Healthcare.
These services are vital for supporting local businesses, fostering economic growth, and
promoting environmental sustainability.

It is clear that Vancity's product and service offerings are closely aligned with its mission to
support community well-being, financial inclusion, and environmental sustainability. Vancity's
approach to offering diverse financial products and services demonstrates a robust model for
sustainable and inclusive banking for consumers and SMEs. To further enhance its impact and
organizational effectiveness, the following recommendations are proposed:
 Leverage and Increase Transparency: Vancity’s current reporting regarding the financial
performance and impact of specific products and services is highly transparent; increasing
transparency will continue to assist members and stakeholders better understand Vancity's
value proposition and areas of growth.
 Product Innovation: Continue to innovate and expand product offerings that address
emerging financial, social, and environmental challenges, reinforcing Vancity's leadership in
responsible banking, specifically in the categories of member platform user-experience,
digital access, and ease of use.
 Impact Measurement: Develop and implement more comprehensive impact measurement
frameworks to quantify the social and environmental outcomes of Vancity's products and
services, supporting strategic decision-making and reporting.
Vancity's organizational structure and design, coupled with its strategic product and service
offerings, position it as a leader in community-focused and sustainable banking. By focusing on
financial inclusion, environmental stewardship, and social responsibility, Vancity not only meets
the diverse needs of its members but also contributes significantly to broader societal and
environmental goals.
External Environment
This section describes how Vancity, like all credit unions and banks in Canada, is
impacted by the external environment and must continue to operate and grow in a time of
uncertainty. Macro external issues ranging from aging demographics to climate change are
discussed, mitigation strategies that Vancity can take are presented, and opportunities to gain
competitive strength are explored. A key takeaway is that Vancity must remain an agile
organization, ready to pivot and adapt to market forces and global trends outside its ability to
manage or control.
Companies that operate with strategic foresight continually perform an external audit of macro
forces that could affect their business strategy and financial performance. As a credit union,
Vancity should follow best practices and ensure it has a division responsible for environmental
scanning. While companies use various acronyms (i.e. PESTEL or STEP) to ensure they
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continuously scan market forces across broad and diverse sectors, other approaches are
available.
STEEP Analysis:
3BC recommends the STEEP analysis approach, which stands for Social, Technological,
Economical, Environmental, and Political. The STEEP approach is an easy-to-use acronym that
encourages senior leaders to be environmentally scanning in their individual work and to seek
summaries of national to global trends that will impact the future operation and success of
achieving Vancity’s strategic objectives.69
The social factors that Vancity will need to pay attention to that can potentially influence its
future market demand range from demographic trends to evolving consumer preferences for
banking services and societal attitudes to corporate social responsibility expectations of
companies.
The critical macro social trends affecting Vancity’s performance are:

 Immigration: British Columbia’s population growth is being driven by immigration, resulting in
an ever-increasing multicultural population where communities are increasingly made up of
a wide variety of cultural backgrounds. 3BC recommends Vancity continue to be culturally
sensitive to all the different preferences of immigrants arriving in British Columbia and be
best positioned to be the credit union of choice by being culturally sensitive to their financial
needs. Providing multilingual support and financial and educational resources, tailored
newcomer banking services, and assisting immigrant customers in establishing a credit
history in Canada will help Vancity build long-term relationships and rapport with potential
future customers. Furthermore, many new immigrant customers are family-oriented. They
may share their trust in Vancity as a preferred credit union of choice, further driving demand
and thus highlighting this as the most critical social trend to leverage to increase Vancity’s
market share in the future.
 Aging Population: Like much of Canada, British Columbia has an aging population,
providing Vancity a strategic opportunity to be aligned with a growing pool of retirees
seeking financial planning solutions for their retirement years. As a credit union, Vancity
should position itself as being able to provide solid financial advice custom to the unique
needs of older adults seeking how to navigate a world of pensions best, cashing out RRSPs
and newer financial products such as TFSAs and investment opportunities for their children,
such as the recently announced first home savings account, FHSA.
 Social Responsibility: Consistent with the core of Vancity is a growing societal trend of
people choosing companies they want to do business with being aligned with their personal
views on sustainability, environmental responsibility, and social impact. 3BC recommends
that Vancity continue to market its brand as a credit union founded in environmental, social,
and governance (ESG) principles that align with today’s socially conscious consumer.
The technological realm of a STEEP analysis for Vancity includes exploring the range of
technological advancements that affect credit unions' digital banking landscape. This
technological exploration involves a better understanding of the increasing digitalization in
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Pestleananalysis Contributor. (2015).
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people’s lives and their corresponding trust, comfort level, and trust in embracing more digital
banking channels.
The key technological trends affecting Vancity’s performance are:

 Digital Banking: Exacerbated by the COVID-19 pandemic, customers' preference for
convenient and accessible banking services that cater to their busy lifestyles and forgo
personal experiences visiting in-person financial institutions continues to be a trend for both
credit unions and banks alike. 3BC recommends Vancity's ongoing adoption of flexible and
seamless digital banking channels, diversifying the range of self-service online and mobile
banking experiences for its members.
 Artificial Intelligence (AI): While Vancity currently gains insights into customer preferences by
leveraging data analytics, many new AI technologies are emerging that will benefit credit
unions. 3BC recommends that Vancity have dedicated subject matter experts testing out the
value propositions or the most promising AI tools that will further Vancity’s ability to target
existing financial products to its members and provide new service offerings based on new
insights from member behaviour and what drives their overall satisfaction and loyalty to
Vancity as their preferred credit union.
 Cybersecurity: It is vital that Vancity comply with any new and emerging data privacy
regulations government mandates, yet it also must recognize and protect its member’s
interests against cybersecurity threats. To maintain trust and loyalty to Vancity, members
must be assured that their credit union has implemented the best state-of-the-art
cybersecurity measures across its digital banking ecosystem, including any cloud-based or
innovative IT infrastructure that Vancity chooses to use as part of its digital software
solutions. Furthermore, 3BC recommends that Vancity take a leading national position in the
financial industry to conduct regular and robust digital security assessments to ensure data
privacy while enabling its members' multi-factor authentication (MFA) systems.
The primary economic factors related to the external environment that will be important for
Vancity to capitalize on for its future growth opportunities are linked to interest rates and
inflation, housing market dynamics, and the financial stability and health of both the province
and national economies.
The key economic trends affecting Vancity’s performance are:

 Inflation and Interest Rates: The financial and investment opportunities for Vancity members,
like all other Canadians, will be significantly affected by rising interest rates and less able to
commit to taking out new loans or mortgages if interest rates continue to fluctuate. As
Vancity considers its profitability targets for lending to its members, 3BC recommends that it
consider maintaining long-term relationships with its members as they make tough financial
decisions related to higher interest rates and manage their own household budget pressures
affected by inflation. Until the average member is supported with the cost of living increases
to offset the higher inflation rates experienced late, Vancity should consider lower profit
margins for its lending financial products and trust that loyalty to their credit union will yield
future dividends.
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 Housing Affordability: A top concern in British Columbia is the cost of housing and the ability
of a family to afford the long-term investment of making a house purchase. The housing
crisis the province faces, with insufficient housing supply to meet the demand, including
immigration noted above, means that Vancity must adapt its mortgage lending expectations
to match the housing market supply and demand dynamics we are experiencing. With the
new provincial housing statutes announced in late 2023 and the requirement for
municipalities to update their bylaws to enable a faster pace of growth for housing starts,
3BC recommends Vancity take a long-term view of this current housing crisis and can
expect a healthier demand for mortgage products as early as five years from now.
 Economic Growth: Traditional economic factors such as unemployment rates, job creation
and salary growth directly impact people’s spending behaviour and capacity to tuck away
savings in financial products that Vancity offers to its members. Macroeconomic dynamics
that affect the economic growth of British Columbia and the Gross Domestic Product (GDP)
performance for Canada also impact the scale to which Vancity can forecast its loan
demand and growth in member savings deposit accounts and the ability for members to
meet their loan obligations without default. 3BC recommends that Vancity continue to
monitor these higher-level economic trends and revise its future net profit projections where
applicable.
The environmental factors most likely to affect credit unions' financial performance are the
increasing expectations of British Columbian’s commitment to environmental stewardship in
light of climate change impacts and tangible examples such as the catastrophic flooding
experienced in the Fraser Valley in 2021.
The key environmental trends affecting Vancity’s performance are:

 Climate Change: From the Province’s CleanBC roadmap to 2030 to the significant number
of BC municipalities that have declared a climate emergency and/or produced their own
climate action plan for their community, there is a growing emphasis among BC residents
caring more about minimizing our ecological footprint and stewarding our natural resources
for future generations. 3BC recognizes that Vancity’s market position is one of leadership in
demonstrating its commitment to environmental stewardship. It should maximize its branding
opportunity to leverage this environmental trend as more people look for financial institutions
to provide green financial services and share in the sustainability values that will mitigate
climate change impacts.
 Community Engagement and Resiliency: The impacts of climate change, unfortunately, can
create massive disruptions in people’s livelihood, as evidenced in BC’s Fraser Valley with
the extensive flooding in 2021 and the almost annual event of major forest fires taking place
in the interior of BC. As Vancity is doing its part as a good corporate citizen, investing in
community sustainability efforts and filtering its investment strategy to companies helping
deal with the climate crisis, it can also build its market share in how it comes alongside the
communities directly affected by natural disasters. 3BC recommends that Vancity look for
strategic opportunities to partner with municipalities and the community in enhancing their
resiliency and future readiness related to the impact of climate change, positioning itself as
the trusted partner for financial needs when such uncertain events occur again across
British Columbia.
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The political factors from the STEEP analysis that are important for Vancity to consider as part
of its external environment review are forthcoming changes in its regulatory environment, either
directly related to the finance sector or indirectly as it relates to its members' financial means,
and the political stability of government, across all scales from local municipalities to the global
affairs.
The key political trends affecting Vancity’s performance are:

 Regulatory Environment: Vancity’s ability to capitalize on financial opportunities is limited
by the government regulations and financial legislation in place. It is the view of 3BC that
it is more important for Vancity to sustain good public relations with all levels of
government to remain upstream in its knowledge management of future changes in
regulations that will have a material impact on Vancity’s financial performance and ability
to serve their members consistent with their mission in supporting community needs as
well. A specific area of regulation to pay attention to that will further allow Vancity to
strengthen its community orientation and credit union differentiation is in government
grants and subsidies that Vancity can either directly inform their members of or be a
catalyst for applying for and making a direct impact through its branch offices throughout
the province.
 Political Landscape: Beginning at the national level, it is clear that the next federal
election will be setting a financial direction, from taxation to stimulus initiatives, and the
two most likely directional fiscal possibilities are not equal. While many of Vancity’s
members may have a political association with one of those two potential directions,
3BC recommends that Vancity create financial scenarios and corresponding action plans
for whatever outcome our following federal election yields. Where appropriate, Vancity
should collaborate with the credit union industry association and proactively express its
national social and economic views as a leading credit union institution through lobbying
and advocacy efforts. Such efforts should be supported with a risk management strategy
and supportive communication plan that doesn’t leave Vancity boxed into one realm of
the political and legislative landscape compared to another.
By increasing its knowledge of these trends, Vancity will enhance its competitive position as the
leading credit union in Canada and provide a viable alternative to banks in gaining members. To
be able to adapt to these external environmental trends and meet the evolving needs of its
members and the communities it wants to make an impact in, Vancity should take the steps to
ensure it is analyzing all of 3BC’s highlighted social, technological, economical, environmental,
and political trends, and making connections across overlapping trends.
With a bird’s eye view of its external environment, 3BC recommends Vancity have a strategic
task force to determine proactive strategies to leverage the benefits of positive trends and
mitigate negative trends and to have the Board consider such strategies as part of future
updates to Vancity’s strategic plan and yearly objectives.
Internal Environment
This section describes Vancity's internal environment and the comprehensiveness and
capability of the company to leverage its distinct competencies compared to its direct credit
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union competitors and traditional banks. By analyzing the internal environment from various
perspectives, 3BC could confirm where Vancity has a tactical advantage and thereby be
continued as part of the company's strategic growth plans.
Concerning external competition, Vancity will be subject to the dual pressure competition of
other well-established credit unions in Canada, such as Coast Capital and First West, in
addition to the traditional financial institutions, such as TD Canada Trust and the Royal Bank of
Canada.70 Compared to the later, Vancity, along with its peer credit union competitors, provide a
distinct advantage to their members in directly sharing in the company's ownership, which is not
possible with traditional banks. Structured as a member-owned cooperative, described by its
President and CEO as taking a "values-based and people-centred approach,"71 Vancity can
leverage the ability to directly engage with its owners and build collective shared ownership in
the company as they collectively align their interests to make a profit for the company along with
making a direct impact into their local communities.
As a more agile entity, Vancity can maintain its competitiveness compared to banks by providing
more personalized community-oriented services to its members, consistently marketing and
differentiating its unique capabilities as a credit union. The most compelling statistic from Vancity
that no other bank can market itself on is that the company returned 30 percent of its net profits
to members or local change organizations in their home community.72 For more business-
minded or entrepreneurial members of Vancity, sixty-eight percent of the company's
procurement spending went to local businesses, essentially acting as an $88 million dividend
reinvestment right back into the communities that members call home.73
Supported by its national association, the Canadian Credit Union Association (CCUA), Vancity
can leverage its unique opportunity to engage directly with its members through various
communication channels74. By maximizing its key messages as a credit union to foster positive
social impacts that are tangibly helping to tackle current community challenges, 3BC
recommends that Vancity continue to do direct outreach to its members through digital
newsletters, community events, and forums aligned with the company's cooperative values. By
demonstrating the benefits to its members as shared owners of the financial health of both a
credit union and the community they care about, Vancity can continue to build its distinctness
from traditional banks that can appear very corporate and unconnected to a member's local
neighborhood.
Similarly, Vancity can make a solid connection to many of its existing and future members by
highlighting its ethical banking practices and showing more integrity as a nimbler financial
institution to be truly prioritizing such principles in how they make their investments in like-
minded sustainable and ethical companies and creating transparent lending and savings
account fee structures. For example, Vancity "does not invest in or lend to fossil fuel
companies."75 Furthermore, Vancity has been committed since 2019 to the Principles for
70
IBIS World. (2023). Credit Unions In Canada.
71
72
73
74
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Responsible Banking (PRB) that guide signatory financial institutions to "align their core
strategy, decision-making, lending, and investment with the UN Sustainable Development
Goals, and international agreements such as the Paris Climate Agreement."76
The PRB places a high value on transparency and accountability and the financial institution's
role and responsibility in taking action to mitigate climate change. 3BC recommends that Vancity
make it well known to the communities it serves that it is a signatory to the PRB with a lens that
might appeal to drawing in new members to its credit union. In 2021, Vancity also made the
PRB Commitment to Financial Health and Inclusion77, a first-of-its-kind pledge to "promote
universal financial inclusion and foster a banking sector that supports the financial health of
customers."78 Vancity's Board should remain steadfast in maintaining alignment with the PRB
and its ethical, sustainability, and community financial health principles, thereby differentiating
the company from traditional banking models in another dimension and complementing its
ability to make a more direct social community impact.
Related to how Vancity invests and commits itself to the financial health of communities is how
the company centers environmental sustainability into all of its business operations and lending
decisions. The company has been on record well ahead of the broader cultural tide towards
calling for action on climate change. For years, it has been setting standards in what's possible
for a financial institution to lead by example and forego specific profit-earning opportunities that
would be in contrast to the urgency it feels is needed to mitigate climate change. Given that
Vancity is deeply committed to this realm and is now "supporting the transition to a low-carbon
economy," 3BC recommends that Vancity use this environmental stewardship value as a
competitive advantage and not be shy of marketing itself as a sustainable business leader.
What is genuinely internal to Vancity is its work culture and whether senior management values
its employees and engages them in a manner that can be a differentiator compared to banks
and other credit union competitors. As evidenced by the 2022 Annual Report, Vancity prioritizes
employee engagement and caring for its workforce, even describing its efforts related to People
ahead of both Planet and Profit.79 Also, within its last annual report, Vancity self-described the
type of internal culture it is trying to become as "a leading employer," which is one that "values
purpose and performance" with an aim "to become the organization people love to work." 80
3BC strongly believes this is a marketing differentiator to be exploited as a recruitment strategy

and for shaping the company's identity as it seeks new members. The results speak for
themselves as Vancity was named one of Canada's Top 100 Employers in 2022, reaching new
heights with employee satisfaction ratings of over 70% for the last two years. 81 This external
validation of Vancity's internal environment from a workforce perspective is one that 3BC
recommends Vancity repeat in multiple communication channels throughout the year. Potential
customers who might be attracted to the membership structure of cooperative banking will have
a greater likelihood of valuing the positive work culture Vancity fosters, cascading to employees
76
Vancity. (2022). Principles for Responsible Banking.
77
78
United Nations Finance Initiative. (2024). Financial Health & Inclusion Commitment.
79
80
81
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delivering quality valued service to its members. For customers who like to align themselves
with companies who express commitments to diversity and inclusion, Vancity also differentiates
itself as a company that follows through on its diversity, equity, and inclusion strategy. 82
What does Glassdoor reveal about the work culture and internal environment at Vancity? Figure
1 summarizes that more than a majority of those who did reviews about working at Vancity
would recommend it to a friend, and an equal majority percentage approve of the company's
CEO. Diversity and inclusion are validated as essential values being expressed at Vancity, with
work/life balance being the next highest ranking. While it is challenging to interpret Glassdoor
insights given the makeup of who might be leaving reviews, the very low ranking in senior
management is something the Board should pay attention to in terms of what they hear directly
from employees. Thankfully, there is enough validation in the Glassdoor findings for Vancity to
keep differentiating itself on its strengths to maintain its competitive advantage as the largest
credit union in Canada. 3BC also notes that Vancity staff are engaging politely in negative
Glassdoor reviews and agrees this is a necessary action to take that will ensure those who
believe in the company values see that Vancity cares about its workforce and is willing to digest
constructive feedback on how to
further improve its workforce
culture.
While we have yet to interview a

cross-section of senior
managers, 3BC would like to
reference the evidence of key
strategic management concepts
important for Vancity to retain
within its internal environment. A
significant part of the
organizational culture and
workplace reputation of Vancity
depends on maintaining strategic
management concepts that amplify the differentiators and competitive advantages of the
company compared to other credit unions and traditional banks. Firstly, 3BC is encouraged to
see the transparency of not only Vancity's vision, mission, and values, which were centered well
in its most recent annual report but also that an entire page was dedicated to the company's
business model. This is best practice for an organization differentiating itself on transparency
and intentionally aligning itself with members who also care about Vancity's values of integrity,
innovation, responsibility, reconciliation, and the triple bottom line of people, planet, and profit. 83
While 3BC's growing relationship with Vancity increases as we advise you on all matters related
to organizational strategies, the Board must continue to value gleaning insights from an internal
audit and taking corrective, immediate action on any findings pertaining to Vancity's finance and
accounting best practices and follow up to any government regulated policies and procedures.
In the future, allowing limited access to your latest internal audits by one of your trusted 3BC
senior advisors may be beneficial. They can often be a vital source of information on Vancity's
82
83
29 | P a g e
internal environment, validating specific trends and bringing fresh insight to others. Areas of
operational excellence are usually discovered through a deep dive into an internal audit,
especially when strategies already aligned with a company's organizational culture emerge. To
be ahead of its competition, 3BC recommends considering this optional strategic advisory role
with our team in future review cycles.
In summary, 3BC notes that Vancity's distinct competencies lie in its identity as a cooperative
business model serving community needs, its ethical and financial health banking practices,
environmental stewardship and concern for climate change, and caring about employee
engagement and maintaining a positive workforce culture. Vancity should maximize these
competencies as it differentiates itself from traditional banks and other Canadian credit unions
and delivers its unique and profitable value proposition to its members and their communities.
Based on the comprehensive analysis of Vancity's internal environment, 3BC Strategic
Consulting presents several key recommendations to the Vancity Board for reinforcing and
expanding the credit union's strategic growth and competitive advantage:
 Enhance Member Engagement and Ownership: Continue leveraging Vancity's unique
position as a member-owned cooperative by intensifying direct engagement and shared
ownership practices. This approach not only fosters a deeper connection with members but
also distinctively positions Vancity against traditional banking competitors by emphasizing
mutual benefits and community impact.
 Amplify Community-Oriented Services and Ethical Banking: Capitalize on Vancity's
strengths in providing personalized, community-focused financial services and its
commitment to ethical banking. Highlighting the return of 30% of net profits to members and
local organizations, alongside the significant local procurement spending, showcases
Vancity's tangible contributions to community prosperity and should be a focal point in
marketing and communication efforts.
 Strengthen Environmental Stewardship and Sustainability Commitments: Utilize Vancity's
leadership in environmental sustainability as a key competitive advantage. Emphasizing
commitments to a low-carbon economy, adherence to the Principles for Responsible
Banking (PRB), and the exclusion of investments in fossil fuel companies can attract
members who prioritize environmental values and wish to see their financial activities reflect
these principles.
 Promote a Positive Work Culture: Vancity's recognition as one of Canada's Top Employers
and its high employee satisfaction rates are testament to its successful internal culture.
These accolades should be leveraged not just for recruitment, but also as part of the
broader narrative that differentiates Vancity in the financial services market, appealing to
prospective members who value corporate responsibility and employee welfare.
 Address Leadership Perceptions: Given the mixed feedback on senior management as
indicated by Glassdoor reviews, it is advisable for the Board to undertake a thorough review
of leadership strategies and employee engagement practices. Constructive engagement
with feedback, particularly around areas of concern, can help in refining leadership
approaches and reinforcing Vancity's reputation as an employer of choice.
 Sustain Transparency and Accountability: As Vancity continues to align its operations with
the PRB and other sustainability frameworks, maintaining high levels of transparency and
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accountability will be crucial. Communicating achievements, challenges, and strategic
responses in these areas will enhance trust among members, employees, and the broader
community.
These recommendations aim to bolster Vancity's strategic position, leveraging its core
competencies in community engagement, ethical banking, environmental sustainability, and a
positive work culture to navigate competitive pressures and drive future growth.
International Environment – Organizational Design
While Vancity does not have any international operations, it has over the years become
a member of a variety of international associations. These commitments ensure Vancity is
continuously learning as an organization and provides the company with an international
environmental perspective to its decision making, governance and strategies.
In no particular order, the following is a list of international alliances that Vancity is a part of
and/or has been a signatory member of:
 The Global Alliance for Banking on Values:

o The GABV is an international network of banking leaders and change-makers who
share the principles of putting money to work for positive change. For these financial
institutions, social and environmental sustainability are as much part of decision-
making as the more traditional risk and return.84
 United Nations (UN):
o UN Environment Program Finance Initiative’s (UNEP-FI) Principles for Responsible
Banking (PRB) Board and Leadership Council: to ensure that signatory banks’
strategy and practice align with the vision society has set out for its future in the
Sustainable Development Goals and the Paris Climate Agreement85
o UN Environment Program Finance Initiative’s (UNEP-FI) Principles for Climate
Target Setting for Banks
o UN Principles for Responsible Banking’s Collective Commitment to Climate Action
(CCCA)
o UN’s Principles for Responsible Investment
 Net Zero:
o Net-Zero Banking Alliance (NZBA), Glasgow Financial Alliance for Net Zero, and the
UN Race to Zero: to support the global collective effort to limit warming to 1.5°C, to
catalyze collaboration within the financial sector and to foster systemic change
internationally86
o Net Zero Asset Managers initiative (NZAMI): to support the goal of net-zero
emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5°C
above pre-industrial levels
Information Technology and Control Systems of Vancity
84
85
86
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Overview
The banking industry, like many other industries, has needed to keep pace with the
modernization of their products and services to reach customers and remain relevant. Credit
Unions like Vancity, while smaller than their corporate banking competitors, have needed to stay
up to date with the trends in fintech and digital product offerings to make banking services more
accessible and convenient. Most of the members of Vancity choose to carry out their banking
interactions on digital platforms87 like telephone banking88, the Vancity mobile app89, the Vancity
online banking page90, and the Vancity Online Business Plus.91
To ensure that the members of Vancity can have access to financial information through digital
platforms Vancity must have a robust technology department that will ensure that the systems
are always working and safe. It is such a large focus of todays financial institutions that Vancity
has a senior executive dedicated to the technology needs of the credit union.
Core Organization Technology of Vancity

The core organization technology of Vancity is that of service technology because at the heart of
financial institutions they are a service firm. This means that the output of Vancity is intangible
as the financial service is consumed at the moment of production. That is why the Vancity
member satisfaction levels are measured and publicly reported on92. The human connection
between members and employees at Vancity is essential for the strategy of Vancity remaining a
relevant company.
Framework of Department Technologies at Vancity

The departmental technologies used by Vancity can be identified using the framework of
Charles Perrow’s model93. For the employees that are working directly with members in a
branch or other capacity offering a direct service could be classified as routine. This is because
the offering will be similar from member to member and many of the services are duplicated.
When considering the work of employees in senior levels of management that are looking
outside of Vancity to form partnerships and invest in companies that are making a positive
impact on the world, either through environmentally sustainable practices or community
empowerment, this could be classified as nonroutine. This is because the there is high task
variety with many possible partnerships or companies that are making a positive impact on the
community.
87
88
Vancity. (2023). Telephone banking.
89
Vancity. (2023). Online banking.
90
Vancity. (2023). Online banking.
91
Vancity. (2023). Online Business Plus.
92
93
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Current Status of Technology at Vancity
The digital strategies of Vancity and the technologies that
they use are led by Wendy Murphy the Chief Technology
and Information Officer (CTIO)94. Her responsibilities
include overseeing the digital services and products of
Vancity along with managing the cyber security of the
company. It is promising to see that this aspect of the
business is being given a prominent place in the
organization as to justify someone who is apart of the
executive leadership team.
As fintech is continuously evolving Vancity needs to

always be watching what new technologies are being
developed that they can incorporate in their services. It
has been noted by Vancity members that the digital
experience is not as advanced as they would like it to be95. Cyber criminals are becoming more
aggressive and advanced in their attacks meaning that Vancity must stay one step ahead to
protect members from fraud and privacy threats.
Online Banking96
The online banking services from Vancity can be accessed from the internet. This allows
members to view their accounts at Vancity to monitor transactions and available funds.
Additional services include the ability to move money between accounts instantly, send and
receive money through Interac e-Transfer, pay bills, and get government benefits deposited
directly into their account.
94
Vancity. (2023). Wendy Murphy.
95
96
Vancity. (2023). Getting Started with Online Banking.
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Online Business Plus97
A specialty service for members with business accounts that which to manage multiple accounts
with one sign in. It is customizable for any business needs to allow permissions for different
views and levels of authority. This offers the ability for multiple users to get access to the
accounts needed for their business tasks. Templates can be customized for repetitive tasks to
allow automated transfers and wire payments. Vendors can be paid easily through the system
even if they are overseas. The system also has enhanced security features like individual
passwords for each user so that risk is reduced for business owners.
Mobile App98
With many of the similar features of the Online Banking there are some additional features with
the mobile app. Not only can member access accounts, make transfers and pay bills but they
are able to deposit cheques remotely but taking a picture of the cheque. Members are also able
to make retail purchases with Apple Pay or Google Pay which will allow them to use tap pay with
their phone at the checkout. The mobile app also sends notifications and alerts to the user’s
phone.
Telephone Banking99
For those members that may not have internet access or are not comfortable with computers
can use the automated telephone banking service. This service allows members to check
account balances or transactions, pay bills or cancel payments, and transfer money between
personal accounts or to other Vancity members.
Digital Security at Vancity

The threat of digital crime has grown over the last decade as our world and businesses have
become more integrated with the internet. This has made financial institutions like Vancity a
desirable target for those who would like to steal money or information about the identities of
members100. To combat these types of attacks Vancity has put in place a number of strategies
and safeguards. One new initiative to enhance security by Vancity have included multifactor
authentication to lessen the likelihood of online fraud. This has shown a decrease for in online
banking fraud for Vancity members. To ensure that the employees at Vancity are aware of
potential cyber crime they were given enhanced anti-fraud education as part of mandatory
compliance training101.
What the Competition is Doing

Many of the competing financial organizations like Coast Capital Savings (CCS) and First West
Credit Union (FWCU) have similar if not the same offerings as Vancity with regards to digital
banking services. Therefore, in a competitive marketplace it is hard to differentiate between the
credit unions based on technology alone. This is likely because many of the credit unions in
Canada use Central 1 as the preferred partner for digital banking102. The Forge platform from
Central 1 allows credit unions to have a stable and secure platform that enables their digital
transformation without having to develop all the technology in house which is expensive and risk
prone.
97
Vancity. (2023). Online Business Plus.
98
Vancity. (2023). Vancity Mobile Banking.
99
Vancity. (2023). Telephone banking.
100
101
102
Central 1. (2020, October 20). Central 1 enables thirdstream.
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CCS appears to be ahead of Vancity in their digital banking strategy as they will allow members
to move money from external accounts to their CCS account. CCS also offers the option of
opening RRSP and TFSA savings accounts without needing to come into a branch location.
Vancity is behind CCS and FWCU as it requires members to open an account in person where
the competition allows members to join online in only a few minutes with only a government ID
and SIN. This may prevent new members from choosing Vancity if they prefer to not visit a
branch.

The trend towards digitization of financial services will only increase in the future so it cannot be
ignored as a central driver of strategy for Vancity in the future. The services currently offered by
Vancity are acceptable and in alignment with what the average person would expect from a
financial service provider today. It does not appear that Vancity has done anything with its
technology that the other credit unions and large banks have not already done. The cyber
security of Vancity appears to be functional today but needs to remain an important focus as
criminals will always be looking for new vulnerabilities in organizations to exploit. To enhance the
digital finance strategy of Vancity 3BC recommends:
 Artificial Intelligence: Partnering with other banking institutions across Canada to learn about
AI. How it will impact the security of financial institutions and how it could be used to make
the work of employees more efficient. This is an area of technology under rapid development
that largely poorly understood by most today, but financial institutions need to be at the table
of the conversation ensure awareness of any dangers or potential benefits.
 Digital Experience Enhancement: Vancity should adopt new technologies like opening
accounts online that other financial institutions already offer. This is especially important if
Vancity wishes to see their membership grow with younger generations, many of whom may
never set foot in a bank. In addition, Vancity should look to the most progressive financial
institutions in the world see if there are any new digital offerings that they could adopt. Hire a
digital marketing firm to assess to the current Vancity digital experience and make
suggestions for improvement or overhaul of the digital ecosystem.
 Social Media: More retail transactions are now happening on social media platforms, so
Vancity needs to be present and be able to engage members there. It is also they way that
many people could discover Vancity and build attachment to the good social works of the
organization in the hopes that they would be compelled to join the credit union.
 Cyber Security and Technology Stability: Financial institutions must be secure to build trust
with users as the information held by Vancity is central to their members lives. Ensuring that
Vancity has top tier cyber security specialists will lower any potential risk for members. Since
the ability to access and use the financial institutions digitally is essential for the daily lives of
members, making sure that the system is always working and allowing members to not
experience disruptions will build confidence.
Organization Size, Life Cycle, and Possible Decline of Vancity
Overview
One way to view a business is as a living organism that is born, grows, matures, ages, and
sometimes dies103. It may seem like a harsh analogy but can be informative to understand where
a business is in its life cycle so that it can properly identify the challenges it is facing. The hope
is that the organization will be allowed to continue to grow and avoid decline.
103
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Within this context the organizational size of Vancity could be viewed as both large and small.
When compared to Canadian credit unions it is the largest of all outside of Quebec 104. In that
regard it is a large well-established business that has become an impressive institution in
Canada. The Canadian Credit Union Association excludes Quebec because Dejardin in Quebec
has total assets of over $250 billion which is close to all other credit unions in Canada
combined105. Even with Desjardins and all the credit unions in Canada assets combined it is only
a small part of the overall banking system in Canada which has over $7 trillion in total assets106.
Stages of Life Cycle Development107

Vancity has been successful as a credit union in Canada by identifying its niche in the market
and focusing on the human side of financial services to connect with the local community and
serve their needs and priorities. As it approaches 80 years of service it has moved through many
of the stages of development.
1. Entrepreneurial Stage:
The earliest stage of development where the organization is first formed and offers its first
services or products. At this stage organizations are focused on survival and growth. Vancity
has long since passed this stage of development.
2. Collectivity Stage: During the next stage of development, the growth of the organization
allows it to develop a more elaborate design with a clear direction for the future. The added
size of the organization requires more sophisticated control mechanisms that allow top
leadership control while allowing autonomy. Vancity today already has many of these
mechanisms in place so would be past this stage of development.
3. Formalization Stage: At the third stage of development the organization becomes
bureaucratic by using rules and procedures. This bureaucracy causes the organization to
become covered in red tape that prevents employees from reacting quickly to solve
problems or capitalize on opportunities. While one could argue that Vancity may be in this
stage today we believe that they have progressed past some of the issues in this stage to
arrive at the final stage.
4. Elaboration Stage: When at this stage of development, the organization has become more
flexible and focuses on collaboration amongst leaders to solve issues. Managers work within
104
105
Canadian Credit Union Association. (2023). National Sector Results - 3Q 2023, pg. 5.
106
Kenton, W. (2023, September 27). The Big Five.
107
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the bureaucracy but do not feel the need to add new control mechanisms. This is the stage
that we believe that Vancity is at today.
The Challenge of the Elaboration Stage for Vancity

The characteristics of an organization at the elaboration stage align well with Vancity108. The top
management style is a team approach which is looking to limit bureaucracy and focus on
serving the communities and their ideals. The major goal of Vancity is to protect their reputation
as a progressive organization that is seeking to do good in the world with their financial
resources to strengthen the members of the community. Vancity has a multitude of service lines
with which they serve the community and serve their members and local businesses. It is
because of these factors that we put Vancity in the elaboration stage of development.
What this means for Vancity is that there is an ongoing need for revitalization of the business to
prevent periods of decline. One indicator of this the missed membership growth rate of Vancity
in the last year109. Canada and Vancouver both have positive growth rates so the target growth
rate of Vancity would be in alignment with natural population growth of the areas it serves and
does not seek to expand its market share. When the general population is growing but the
membership of the organization is not growing at the same rate or faster than the organization is
in decline.
Much of the population growth in Canada has been as a result of immigration to the country. The
new immigrants to Canada bring with them values that may change the ideological makeup of
Vancouver. As Vancity is a very progressive organization, it has aligned itself with many of the
social justice causes of the day. As the values of the local population change it could make
Vancity vulnerable to negative perceptions with newcomers to Canada.
Possible Decline of Vancity

As the author William S. Burroughs once said, “When you stop growing, you start dying.” While
this could be considered a cliché, in the context of business it likely holds more truth as it is only
108
109
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a matter of time before something in the market changes and decline is inevitable. With many
technological changes that have recently impacted the financial services sector, continuing to
stay ahead of the curve and remain relevant to their members is essential. Switching financial
institutions today has never been easier. The best way to combat future decline is to focus on
current day growth. This could be through the organic growth of acquiring new membership or
through the route of acquisition and mergers which other credit unions have been focused on.
If we look at the stages of decline of organizations110, it would be inappropriate to put Vancity in

the later stages of decline. There are no major crises in the credit union that would warrant a
reorganization or the need for corrective actions at this time. The financial performance of
Vancity is strong and can confidently carry out their missions of serving their membership and
the larger community around them. It is our assessment that Vancity would be at the first stage
of decline which is the blinded stage. It is unlikely that any of the leadership has detected a
deterioration in performance. The turbulence of the financial market that the COVID-19
pandemic caused has made the last few years difficult to measure or benchmark. At this time, it
would be advisable for the executive leadership to develop some effective systems to scan for
signals of decline so that they are able to bring the organization back to top performance when it
is detected.

With the recognition that Vancity has been very successful in their growth over their lifetime to
reach the final stage of elaboration. This is a great accomplishment for Vancity and is a
testament to the inherent strength of their organization. The challenge that is currently facing
Vancity is the need for constant revitalization and relevance as a company. When a company
has achieved has reached the top spot in their industry it is easy to fall into complacency and
lose the hunger that allowed them to get there. The surest sign of the health of an organization
is the focus on continuous profitable growth which will allow increasing impact in society. For the
perpetual growth of Vancity 3BC recommends:
110
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 Engage New Canadians: The demographics of Canada continue to diversity with many
immigrants to the country. The mission and values of Vancity align with many of these new
Canadians recruiting them to become members is a viable strategy for growth.
 Engage Young People: Young people today prefer to make choices to buy from companies
who share their values and desires for a sustainable future. The values of Vancity would be
very attractive to this group. Reaching out to young people to be their first financial institution
has the potential of lifelong members for Vancity as many people do not change their
financial institution.
 Explore Mergers and Acquisitions: Vancity is very focused geographically with locations on
the lower mainland. Exploring opportunities to purchase smaller credit unions in areas, like
the interior or northern BC, that Vancity does not currently have location would be a great
way to expand membership. A merger with a larger credit union which is well established in
Canada would offer a larger scalability to better financial performance and larger community
impact.
 Be Vigilant with Signs of Decline: As decline of organizations is always a threat it will be
important for Vancity to develop systems which can monitor the organization for signs of
decline.
Organizational Culture of Vancity
Overview
The culture of any organization is an essential tool that can be used to guide the employees and
direction of the organization. These shared beliefs, norms and values are commonly held by all
within the organization. Vancity is a company with a strongly defined culture that attracts both
employees and members that identify with their culture. Vancity sees itself as a force for change
to make a better world111. With a focus on environmental and social justice the culture of Vancity
is much deeper than simply a financial institution. Employees and members see Vancity as a
vehicle for activism and societal change112. It is a bold vision that has captured the hearts of
many people who believe in the difference that Vancity can make.
There is a clear purpose to why Vancity exists and what they aim to do. With a large financial
institution, it would be easy to compromise stated values for the sake of earning a better return.
This is a common challenge that faces many businesses today. Vancity walks a difficult line of
staying true to their principles while delivering a financial performance that is competitive with
any other bank. This internal integration of their culture has created a strong group identity with
employees and members alike which allows them to easily relate to each other through their
shared values.
As a financial co-operative Vancity is owned by their members so they make the effort to solicit
feedback from their members each year to ensure their objectives are in alignment with the
desires of their members. The board of directors are nominated and elected by the members
every year113 which allows Vancity to have strong external adaptation.
Organization Culture from Strategy Focus and Environmental Needs
111
Vancity. (2023). Force For Change.
112
Vancity. (2023). Who we are.
113
Vancity. (2023). Board of Directors Election.
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There are four types of culture that can be identified based on whether the organizations
strategic focus is internally focused or externally focused and whether the needs of the external
environment require flexibility or stability114.
Adaptability Culture115
For the organization that focuses their strategy on the external environment and sees value in
remaining flexible to change as the market needs shift, can be said to have a culture of
adaptability. There is a spirit of entrepreneurialism in these organizations, and they are
constantly looking to innovate.
Mission Culture
If the organization does not require the ability to rapidly change to market needs but still is
strategically focused on the external environment, then they could be described as having a
mission culture. These organizations focus on clear goals and high levels of performance in the
areas of focus to achieve their organizational vision.
Clan Culture
When the strategic focus of the organization is on the participation of the organization’s
members to respond to fast changing expectations of the external environment, then the
organization can be classified as having a clan culture. These organizations focus on taking
care of employees and empowering them to be happy and productive.
Bureaucratic Culture
An organization that sees stability as the need of the external environment and focuses
strategically on their internal organization to achieve consistency of output would be best
described by a bureaucratic culture. The high level of integration and efficiency of the
organization allows them to reliably deliver results.
Vancity’s Organizational Culture

114
115
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As an organization Vancity’s culture is values driven to achieve their social purposes and
financial performance 116. The values of Vancity are to drive social and systemic change through
the lens of diversity, equity, and inclusion to become a place that people love to work, all while
supporting environmentally sustainable initiatives for a better future. To hold their organization
accountable Vancity is transparent with the targets that they set that will make this change
measurable and report on their progress117. As a result, Vancity has been named one of
Canada’s top 100 employers118.
Using the cultural matrix to measure where Vancity is among the two dimensions reveals that
Vancity shares both the Mission and Clan cultures. The Clan culture is seen in their internal
focus in considering their employees as very important and wishing to support their needs. This
is alongside their focus on flexibility to change to meet the latest progressive initiatives in
societal culture. Their Mission culture can be seen in the focus on strong performance as a
financial institution while seeking to make meaningful change in the world. Vancity has done a
good job of balancing these two cultural orientations to allow stability and flexibility while
supporting their people and engaging the community around them. This shows their strong
adaptive culture as an organization.

The shared values and guiding beliefs of Vancity are well understood and integrated by the
employees and members. This has given a strong, well-defined culture to Vancity that is value
driven. These values have allowed Vancity to listen to the larger community for changing needs
and priorities so that they can continue to have a positive impact in the world. To guarantee the
ongoing strength of the organizational culture of Vancity 3BC recommends:
 Stay True to Values: As a non-profit business Vancity exists to be a force for positive change
in the world. Making sure to stay close to the values that Vancity was founded upon will
allow them to stay relevant to the community and ensure that they continue to have a clear
niche in the future.
 Focus on the People: Unlike other financial institutions that make seem driven solely by
financial performance and bottom-line decisions. Vancity’s strength comes from the
employees that work there and the members that are aligned with Vancity’s vision and want
to make a difference with their money. Continued empowerment of employees to do their
best work and ongoing engagement with members will guide the decision-making process of
the company.
 Solicit Feedback: A healthy organization is not afraid to receive honest and critical feedback.
By opening Vancity to formal feedback surveys of members and employees on a regular
basis the company will ensure that they are not blind to rising concerns or changing
attitudes.
Ethical Values of Vancity
Overview
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In today’s business world making ethical decisions is synonymous with making smart business
decisions. The internet and social media have put organizations under the microscope to always
be doing the right thing. Even relatively small infractions can become viral scandals overnight
that could threaten the future of the company. To overcome the dangers that are a reality of
business today, companies must instill in their leadership and employees a sense of ethics that
guides their daily decision making. These become the ethical values that define the company
and show society that the company is worthy of their business.
For Vancity, the focus from inception was based on the ethical ideas of serving their community
and being a changing force of good in the world119. This has instilled in the organization a very
strong ethical code that employees embody. The ethics of Vancity are what attracts many
employees to work for the company and is the focus of marketing campaigns appealing to new
members. This sense of doing what is right goes beyond the guiding decisions for managers or
employees at Vancity but to have a social impact through every decision that Vancity makes.
Social Responsibility120
The concept of social responsibility is seen when the decision making of the company
surpasses what is good for the company to what is also good for all stakeholders like
employees, members, and society at large. Vancity places giving back to the community as a
central objective of their business. As an example, in 2022 Vancity gave away 30% of their net
profits or $22.1 million, to organizations that are working for the betterment of the local
community121. Another example of this is Vancity’s commitment to providing financing for
affordable housing projects which may otherwise have difficulty getting approval. In 2022 alone,
Vancity financed the renovation or construction of 3,666 units of affordable housing122.
For many years Vancity has promoted environmental sustainability through setting aggressive
net zero carbon targets for the year 2040123. They have focused on developing products and
services for members that want to reduce emissions in their lives and businesses124. For
example, Vancity’s line of Planet-Wise products finance eco friendly transportation options and
make energy efficient retrofits in their homes and businesses125. Vancity wants to be the partner
that is helping to finance the transition to a cleaner economy of the future.
119
Vancity. (2023). Who we are.
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Personal Ethics126
Many of those that work at Vancity also bring to the organization their own personal set of
values which could be classified by the distributive justice framework127. In this framework the
morality of decisions is based on the degree to which they promote equity and fairness. As a
result, Vancity has declared their commitment to being an anti-racist organization. Vancity has
committed to removing the financial barriers from minority groups like Indigenous people,
people of colour, those living with disabilities, and the 2SLGBTQIA+ community128. They have
also created a continuously open job posting to prioritize the hiring of Indigenous applicants129.
This engagement with often overlooked people by Vancity illustrates the dedication to positive
social change in the community.
Values Based Leadership130

The values that Vancity explicates are shared by senior leadership all the way down to newer
members. These shared and internalized values have been recorded into the guiding principles
of Vancity131. These include environmental sustainability, social justice for financial inclusion, and
their Ethical Principles for Business Relationships (EPBRs). The EPBRs guide the leadership
decisions of who Vancity chooses as suppliers, business partners, and who they give out
sponsorship to. To lead by example Vancity is one of Canada’s largest Living Wage Employers
who pays employees at an hourly rate that was independently determined as the required
minimum for two working parents to meet the needs of a family of four132.
As a financial institution Vancity must invest in companies to gain returns for their members.
Vancity has made the choice to look for companies using progressive environmental, social, and
governance (ESG) practices to invest in and avoid those that do not133. These companies are
more in alignment with the vision of Vancity. Vancity has an Impact Investment Strategy, which
has been allocated $67 million since 2016, to invest in venture capital funds that generate
tangible ESG benefits134. As another example of their values-based leadership the VCIB, a
subsidiary of Vancity, is exclusively focused on working with organizations that social, economic,
and environmental change.
Social Audit135
Unafraid to be held to high standards, Vancity voluntarily reports on many of their values-based
targets to increase transparency. There is a climate report on the Vancity’s climate governance,
strategies, and metrics136. Vancity’s accountability statements report measures financial,
employment, diversity, community support, and governance metrics137. The 2022 annual report
126
127
128
129
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131
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results were even assured by KPMG as a third-party auditor138. These efforts undertaken by
Vancity were done to prove to members and staff that they are serious about leading based on
their values and intend to put their money where their mouth is.

It is clear that for Vancity, following their principles and leading based on their ethical values is of
primary importance to the organization. Vancity has outperformed many comparative credit
unions like CCS and FWCU in this area. The other institutions do espouse many similar values
and also have aggressive ESG targets, but Vancity can still be seen as the exemplar of a
socially progressive institution. What really sets Vancity apart is the high level of transparency
that they have with regards to their targets and reporting on their progress. To remain as an
organization that is lead by their ethical values 3BC recommends:
 Independent Committee: It would be recommended that Vancity appoint an independent
committee of employees, members, and community activists to evaluate the current
strategies and goals of Vancity. The committee would bring an outside perspective to the
executive leadership team by making recommendations on emerging areas of concern for
action or evaluating targets set by leadership.
 Share Stories: To increase the impact of Vancity in the business community and further
influence the decisions of other financial institutions, Vancity could publish stories of how
their ethical choices have helped their business. Social change can only happen when the
majority of people join the movement to change their behaviour.
 Learn Best Practices: By joining networks of organizations also promoting social and
environmental change, Vancity leadership can be inspired by others. They can learn what is
working for others and build new partnerships that may lead to new initiatives.
Innovation and Change

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Like all leading entities in any business sector, Vancity must always be ready to innovate
and lead change within the organization to position the company better for the future. As noted
in various places throughout our analysis, Vancity must continue innovating in developing its
financial products and demonstrate its innovation as it navigates a course forward that leads to
economic growth, sustaining the financial health of the company and the members of the co-
operative. As it faces the pressure and uncertainties of the external environment and directs its
change management processes to adapt and respond with agility, Vancity can focus on
fostering more innovation within its internal environment.
A few successful innovations and results of the change process at Vancity are its newly
rebranded enviro™ Visa credit cards. Built with recycled PVC plastic, the credit cards include
high contrast numbers for quick readability and now have a feature that estimates the member's
total carbon footprint of their purchases. The company has also introduced Google Pay and
allocated a budget to its current work plan to improve its mobile and desktop banking
applications.139
With change taking place all around financial institutions and within the lives of its co-operative
members, it is not a question of whether the financial product offerings Vancity offers will remain
the same but how much and how quickly it needs to keep repositioning the company to stay
competitive in the continuously evolving economic landscape. 3BC recommends that Vancity
poise itself for success by embracing an innovative culture, as mentioned twice by the
Presidents and CEO in the most recent annual report.140 With the rapid pace and technological
changes, including AI and cybersecurity, Vancity must be ready to embrace dramatic and often
systematic changes affecting its financial products, member services, operational processes,
and workforce culture.
Incremental Versus Radical Change141

As illustrated in Figure 1, Vancity will need to determine how to approach change through either
an incremental or a radical change strategy. An incremental change approach allows an
organization to progress through a continuous series of changes that do not disrupt the ongoing
equilibrium of a dynamic business, where the change may often be centered in only one division
of the organization. While incremental change may include changes in technology or systems
within an organization, the change management approach is typically done through the
company's existing processes and management structure framework. A radical change
approach affects the entire entity and is best described as transformational, as it typically affects
all employees within the organization. As such, radical changes are most often associated with
creating new internal processes and new leadership or management structures.142
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140
141
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3BC recommends Vancity position itself for a radical change given where it is in its lifecycle.
While it doesn't need to lead with radical change immediately, it must be positioning itself now
and decide to be transformative when the time is right, which includes the potential for a
sequence of mergers and acquisitions.
Strategic Types of Change

To advance its competitive position as Canada's premiere credit union of choice, Vancity has the
following four types of changes to lead through: products and services, strategy and structure,
culture, and technology.143 While each has unique potential, they are often combined into
interdependent changes, as one change may be a catalyst for another.
• Products and Services: Vancity can adapt its current financial products or look to innovate
and create new services, all with an eye to increasing its market share in attracting new
members to the co-op.
• Strategy and Structure: Related to the administrative functions of an organization, Vancity
could pursue exploring organizational structure changes or introduce systems changes to
functions such as accounting or managing individual branch locations.
• Culture: While Vancity has a set of values that already define its culture, it could consider
changes to those values to attract a wider demographic and interest in its members.
• Technology: Updating technology that improves the productivity or efficiency of Vancity's
services is another change the organization can consider.
Before recommending any particular change or set of interdependent changes, Vancity should
consider defining what success will look like after the change(s) is implemented. Each step of
the change management process, illustrated in Figure 2144, is vital for the entire change process
to yield benefits to the organization. By fostering creativity, new ways of doing things are
expressed and a mapping-out process should be completed. When there is an appetite to
143
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seriously consider creative ideas or there is an identified need to improve performance,
organizations reach the adoption stage of the change process. Decision makers move forward
with an idea or need into implementation, the most difficult part of the change process. 145 All
changes require time and resources, thereby identifying the final phase necessary to bring
about and implement a change within an organization.
After a series of brainstorming sessions and global benchmarking on innovations suitable to the
financial and banking industry, 3BC recommends the following changes for Vancity to consider.
While there are innovations and transformational change processes that Vancity will need its
Board to consider, these are primarily modest incremental changes that could be implemented
in the near future.
Products and Services:

In developing new innovative financial products for its members, Vancity should consider
blending the talents of its financial services team with the marketing department to leverage the
best product and service solutions tailored to meet current market demands.
3BC Recommendations for Products and Services Change:

 Vancity should focus on developing innovative financial products, especially those promoting
sustainability, demonstrating the company's capability for innovation aligned with emerging
market demands well suited for a credit union.
 Vancity should continue to be a pioneer in providing innovative, sustainable financial
products and services that improve a members' platform digital access experience and ease
of use.
 Vancity should expand its product and service offerings to address emerging societal
challenges valued by the communities the company is reinvesting in, solidifying the
company's position as a community leader and partner in responsible banking.
Strategy and Structure:

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As part of benchmarking change processes in comparative credit unions and banks, 3BC notes
there are a few easy-to-implement changes related to strategy and structure that are applicable
for Vancity. One strategy and structure approach is the Horizontal Coordination Model, which
involves departmental specialization, boundary spanning, and horizontal coordination.146
Personnel from multiple departments participate as a task force, ensuring they explore the
external environment and make use of resources from associations, all to be coordinated
horizontally across the departments to make recommendations on new products and services to
launch across the organization.
A trending strategy and structure approach is to create an Innovation Lab at Vancity. The
Innovation Lab would be a physical space that would be custom-designed to be a collaborative
space for teams to formalize innovative teams, such as the Horizontal Coordination Model, as
well as ad hoc groups who may only choose to experiment with new ideas. Whiteboards would
be plenty in the Innovation Lab, along with other creative brainstorming tools, supporting cross-
functional teams coming together with their diversity of skills and expertise to evolve innovative
concepts. If budgets permit, collaborative project management tools and pioneering software
solutions would be available to support entrepreneurial and creative employees using the
Innovation Lab.
3BC Recommendations for Strategy and Structure Change:

 Beyond the larger organizational structural considerations noted previously, Vancity should
consider codifying the establishment of cross-functional teams and virtual networks that
facilitate innovation and collaborative problem-solving.
 Vancity should establish an Innovation Lab to encourage employees to be creative and
collaboratively develop new product ideas and strategic solutions.
Culture
Vancity should aspire to be a learning organization where knowledge sharing amongst all levels
of the organization is encouraged, with employees supported in being continuous learners. To
further support the company as a learning organization, Vancity should consider culture change
approaches that best match the values of its workforce, fostering an openness to contribute new
ideas and concepts. Large group interventions such as team building and interdepartmental
activities should be facilitated as part of a deliberate plan that intrigues employee's curiosity,
motivating them to contribute their creative ideas as part the company's effort to foster a
continuous learning and innovation culture.
3BC Recommendations for Culture Change:

 Vancity should create the space for employees to express their innovative ideas related to
any part of the business, with senior leadership being accountable for assessing and
communicating out to the workforce with ideas are moving into implementation.
 Vancity should develop and execute system-wide learning programs that foster innovation
and continuous learning as part of their overall professional development offerings.
Technology
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Looking beyond the already proven technology solutions available to Vancity members, such as
contactless payment options through mobile wallets and contactless debit cards, further
technological innovations that support cashless transactions will remain a priority as members
look to their preferred financial institution to deliver safe, secure and convenient banking
experiences. Regarding improving customer service, AI-powered Chatbots are becoming
standard operating procedures in all credit unions in Canada, enabling more people to access
convenient financial services efficiently.147
Given the importance of needing to embrace technological change, it is essential to remind

Vancity that it has an organizational culture ready to embrace and adapt to change. The
company's empowerment of employees, flexible organizational structure and promotion of
horizontal cross-functional teams is a recipe for the company to welcome both bottom-up
innovation processes from junior employees to middle management and top-down changes
from senior management and Board leadership. Best practices suggest that Vancity should
consider framing its change process through an ambidextrous approach that considers both the
methods of exploring new ideas simultaneously and the management of implementing them
until they become a routine part of the organization148. 3BC believes that Vancity should
embrace the ambidextrous approach to its change processes as it is the maturity level and
capabilities to benefit from the innovative benefits of creating and implementing simultaneously.
Within the realm of the ambidextrous approach, there are two potential pathways: switching
structures and separate creative departments.149 3BC does not recommend the switching
structures approach, which is the creation of structure only at the times when a new idea wants
to move from initiation to implementation. Rather, 3BC recommends some version of creating a
separate creative department at Vancity as the depth and breadth of innovation are substantial
for such a large and established financial institution, including the company's significant linkages
into communities based on its co-operative model. Whether Vancity establishes an idea
incubator or a venture team or uses skunkworks, small, autonomous, and informal groups focus
on transformative ideas for the company.150
3BC Recommendations for Technology Change:

 Vancity should advance digital transformations that reduce operating costs while improving
customer relations, especially technological changes that will increase the competitive
advantage of Vancity as a credit union as compared to traditional banks.
 Vancity should make a more significant investment in leading-edge technologies, including
embracing digital and fintech innovations that provide the company with a competitive edge.
Strategies for Implementing Change

Change processes are frequently disruptive, and their implementation necessitates commitment
from senior leadership to offset the natural resistance to change or messiness a change
management effort might bring into an organization. 3BC has significant experience advising
companies on the strategies that will be most effective for implementing and, more importantly,
sustaining change processes until the expected benefits are realized.
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Common barriers to change151 that the visionary leaders tasked with implementing the change
process fall into the following categories: excessive focus on costs, failure to perceive benefits,
lack of coordination and cooperation, uncertainty avoidance, and fear of loss.152 To counter
these common barriers to change, 3BC recommends that Vancity establish a sense of urgency
for why the change is needed, providing a compelling reason for people to treat the change
process seriously and contribute their creative input. Next, Vancity will need to build a coalition
of diverse leaders who share a common purpose in desiring the change process. These self-
identified leaders will not guide the change effort; they will also cast a vision and develop a
strategy. Through creative means, that will help us as a cross-functional team discover the right
idea to meet the needs of the change process and then develop the plans that will mitigate
against any resistance to change.
3BC is confident that Vancity is ready to formalize more change processes within its culture. We
see the company as having the proper organizational structure that will enable specific strategy
and structure change processes resulting in wave after wave of innovative products and
services and technological advancements that will further the mission and vision of Vancity.
Decision Making Processes
Board of Directors and Executive Leadership Team153

Across Vancity, thousands of decisions are being made per day. The success and growth of
Vancity is dependent on the results of decisions by its management and senior leadership
teams, including the choices it makes as an organization in times of disruption and
uncertainty.154 The origins of how decisions were to be made at Vancity were rooted in its
founding statement of values that aimed to eliminate bureaucracy so decision-making in the
company would be made closest to where decisions were made. This original expressed value
in decision-making culture was birthed out of consulting a diverse mix of employees, directors,
members of Vancity and members of the communities where Vancity was operating.155
Vancity continues the tradition of following its values in its decision-making so that as a co-
operative it maintains its principle of serving the varied needs of its employees, members and
society.156 Today it looks different today in terms of accountability to the original decision-making
value, which is understandable given the size of the company and number of branch locations.
While democratic member control was one of the original principles of foundational identity of
Vancity,157 today the Board of Directors has delegated the day-to-day management of the
organization to its President and Chief Executive Officer (CEO). The CEO, then cascades down
or distributes (depending on their leadership style) the overall day-to-day decision-making and
their related accountabilities to each member of Vancity’s executive leadership team (ELT).
151
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153
(VanCity, 2023)
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(Daft & Armstrong, 2015), page 409
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(Daft & Armstrong, 2015)
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(VanCity, 2023)
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While the CEO and the ELT are given oversight to manage and operate Vancity, it is still the
company’s Board of Directors who represent the members of the organization, acting both as
stewards of its assets, with the legal and fiduciary duty to protect them. Given the amount of
influence a Director has on guiding the company, members of Vancity have the opportunity to
annually vote for their new Directors, whose terms typically three years in length. Based on
Vancity’s socio-economic and sustainability values, Board members are expected to represent
and be accountable to their members. To support them in integrating social, financial and
environmental factors into their business decision-making procedures, Directors receive training
and education in topics such as the rights of Indigenous people as well as more typical
corporate Environmental, Social, and Governance (ESG) issues.158
The responsibilities of the Board include building consensus on a forward-looking strategic

direction and regarding decision-making, ensure there is a good governance framework for
making decisions. The Board of Directors are also responsible for providing adequate oversight
of consequential day-to-day management results and fostering a strong and effective risk
management culture. Directors confirm there are mechanisms that ensure the financial
investments of members are protected and approved benevolence money directed to improve
communities is followed through as per any Board approvals.
Board Committees159
To remain effective as a Board, Directors have created sub-committees including a Governance
Committee and a Risk Committee (RC). A key responsibility of the Governance Committee is to
conduct an annual review of Vancity’s policy on Ethical Principles for Business Relationships. In
comparison, the RC meets quarterly and brings oversight and strategic advice to the Board on
existing and highly probably future risk exposure with recommendable risk strategies based on
risk appetite, common risk indicators, and acceptable tolerance levels.
Case Study of Decision Making on Climate Change160

One of the five current strategic and governance goals emerging as a priority from Vancity’s
Board of Directors is being responsive to climate change. Together with the CEO, the Board
approved climate targets on behalf of the company to “do our part across our operations to
contribute to a just climate transition” (VanCity, 2022) in a manner that would be consistent the
company’s original values-based decision-making that takes into account serving the diverse
needs of employees, members and communities.
Effective governance of climate change at Vancity includes Directors providing oversight of

climate risk management and ensuring there is “understanding, oversight, and accountability for
the financial risks and opportunities Vancity and members will face stemming from climate
change” (VanCity, 2022). Progress on how the company is advancing its Director-approved
climate commitments is shared through quarterly reports, including reporting out on various
committees set up to be accountable to climate-related goals.
Decisions regarding climate change are also a key focus area of the RC and the Chief Risk
Officer (CRO) from the ELT. Together the RC and the CRO monitor organizational risk
158
(VanCity, 2022)
159
(VanCity, 2022)
160
(VanCity, 2022)
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thresholds as part of Vancity’s Risk Appetite Framework (RAF). The RC also takes a leadership
role in helping the Board make decisions related to climate change by modelling the impacts of
varied climate-related events, such as flooding and wildfires.
Beyond the Board sub-committees, Vancity also supports its climate change decisions through
a dedicated team of eight employees that make up its Climate Strategy and Performance (CSP)
team. The CSP establishes climate change targets and leads Vancity’s strategy to achieve net
zero emissions.
Conflict, Power, and Politics in Vancity
Overview
With an organization as large as Vancity that employes thousands of people and has hundreds
of thousands of members there will inevitably arise conflict at times. How the organization
chooses to address these challenges can make the difference between escalation or mitigation
of conflicts.
For a financial institution that is responsible for many billions of dollars’ worth of assets and who
desires to also be a change maker in the world there will be naturally competing priorities. It can
be a large enough challenge for a credit union to compete with the big banks in Canada when it
comes to financial performance. When there is an additional perspective that attractive
investments cannot be undertaken if they conflict with the social objectives of the organization, it
adds another dimension to the challenge. Despite the fertile ground for rampant conflicts to
arise, Vancity has seemingly managed to navigate the treacherous waters with notable skill.
Goal Incompatibility Within Vancity161

One of the main sources of conflict that will arise within Vancity is the goal incompatibility of
financial performance and social activism. The interests of the groups responsible for these
conflicting objectives would tend to be at odds. One is focused on profitability and lowering
expenses while the other is looking to address social change through the commitment of
financial resources.
Rational vs. Political Models for Vancity162

The rational model for organizations typically works best when organizational goals are aligned,
and departments are not directly reliant on one another for goal attainment but are characterized
by pooled independence. When there are great differences between the department’s
objectives, and they are competing for the same resources then a political model is the best
option to influence decision making. Due to the low levels of reported conflict at Vancity and
shared organizational values the rational model would be the most effective way to resolve
conflict. This model calls for centralized power and control to make orderly and rational
decisions.
Power at Vancity163
Individuals within the company will need to use power to influence others and resolve conflicts.
There will certainly be legitimate power, reward power, and coercive power used at Vancity by
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some managers and leaders to achieve organizational goals. Noting the strong ethical values
present at Vancity, it is unlikely that these forms of power are as widely used or as potent as
referent power. As there is such a high value placed on equity and justice at Vancity with a keen
focus on doing the right thing, it is unlikely that leaders would stay in their position long if they
did not use referent power. The referent power draws the admiration of others within the
organization causing them to desire to emulate that leader.
At Vancity the focus on employee wellness is reflected in their power of empowerment164.

Employees are given transparency to the objectives of the organization and financial information
is shared through Vancity reports. This empowers the individual employee to make good
decisions for the company and makes them feel good about working for Vancity.
Political Environment of Vancity

One who has read about Vancity in the news or encountered someone who works there would
not suspect that the environment of Vancity is political. At least not in the negative sense of a
political environment where leaders are trying to compete with one another and are willing to do
underhanded maneuvers to get their way. Vancity is certainly political in the positive sense of
listening to disparate groups to hear them out and negotiating a consensus among those groups
so that the organization can move forward. The leadership at Vancity expends a lot of effort to
listen to employees and member’s needs, and address stakeholders in the community. These
types of discussions take a lot of political skill to ensure that all parties are heard and feel
satisfied with the outcome.
A reason why Vancity has successfully been able to combat negative political activities is
because of their strong focus on the community and mission. Vancity has a strong culture of
ethical values that are shared by employees and members which aligns with many of the
primary goals of these people. An example of this is the strong focus on supporting employees
in their roles and choosing to pay a living wage to all employees. This eliminates criticisms of
hypocrisy by Vancity showing that they are actively trying to do good and are not focused solely
on corporate profitability.

When power struggles and politics interfere with business operations it will lead to discord in the
company, lowered morale, and lower performance. As Vancity has naturally competing interests
in their goals as a company the opportunity for conflict is high. To combat the negative effects
this can cause in an organization 3BC recommends:
 Employee Empowerment: By giving information to employees that allows them to know what
effect their performance has on the financials of the company it can inspire them to make the
best decisions for Vancity.
 Leadership Development: For leaders in the organization that could use additional skills to
improve their ability to navigate difficult situations where competing goals have created
conflict.
 Public Relations: Developing a public relations strategy to keep the image of Vancity
untarnished is important as much of the competitive advantage of Vancity revolves around
their positive image as a company that cares.
Key Findings & Summary Recommendations:
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This comprehensive organizational analysis of Vancity showcases the credit union's
steadfast commitment to its core values of social responsibility, community focus, and
sustainability. Vancity stands out in the competitive landscape of financial institutions through its
unique cooperative model, which not only emphasizes member welfare and environmental
stewardship but also directly contributes to local communities. Despite its commendable
achievements and innovative approach, Vancity faces challenges in sustaining growth and
adapting to the rapidly evolving financial services sector. The need to enhance the consumer
experience through technology, leverage its position as a socially responsible institution, and
reinvigorate growth has emerged as strategic imperatives.
Throughout this report, 3BC has made recommendations that will support and enhance
Vancity’s position in the financial services industry in Canada. We understand that it is not viable
to implement every recommendation, so to drill down on three key specific areas for
improvement, we have detailed the following:
3BC’s “Key-3” Recommendations:

• Leverage Technology and AI:
Vancity should leverage technology and AI to remain competitive and responsive to the
changing dynamics of the financial industry, where digital innovation is key to attracting and
retaining members. The integration of advanced data analytics and AI can significantly
enhance personal banking experiences, offering customized financial advice, predictive
analytics for personalized product offerings, and streamlined online banking services.
Among the easiest products and services to be impacted are mobile banking applications,
fraud detection systems, and customer service chatbots, which can all benefit from AI to
provide more efficient, secure, and personalized member experiences. These tech-driven
improvements are crucial for Vancity to meet the expectations of a tech-savvy membership
and to lead in the realm of ethical and community-focused banking.
• Social Responsibility as a Key Differentiator:
It is evident that Vancity's membership growth has plateaued, likely primarily due to the
evolving financial services landscape and the changing needs and preferences of potential
members. As a pioneer in ethical banking, Vancity should further leverage its reputation as a
'socially responsible' financial institution. By intensifying its efforts in community-focused
initiatives, sustainable banking practices, and profit-sharing models, Vancity can reinforce its
values of social responsibility. Strategic partnerships with like-minded organizations,
increased transparency in its sustainable practices, and targeted communication campaigns
can amplify its impact, attracting members who prioritize ethical considerations in their
banking choices.
While Vancity's strong emphasis on social responsibility, community-focused initiatives, and

ethical banking practices has set it apart as a pioneer, these attributes alone may not be
sufficient to attract a broader demographic in a highly competitive market. To address this,
Vancity needs to enhance its visibility and appeal by more aggressively marketing its unique
value proposition, particularly to younger individuals and new immigrants who may not yet
fully appreciate the impact of Vancity's socially responsible initiatives on their personal and
community well-being and to focus recruitment efforts on culture and fit.
• Reinvigorating Growth:
54 | P a g e
Vancity should pursue a merger and acquisition (M&A) strategy to overcome stagnation in
membership growth and tap into new markets and demographics. By strategically acquiring
smaller credit unions165, Vancity can expand its geographic presence, bringing its unique
blend of ethical banking and community-focused services to a wider audience. This
approach not only facilitates economies of scale, enhancing operational efficiency and
service offerings but also aligns with Vancity's mission by integrating institutions that share
its commitment to social responsibility and sustainability.
Acquisitions in the two key provinces of British Columbia (BC) and Ontario should be
considered first. In BC, the acquisition of Prospera Credit Union, Community Savings Credit
Union, Interior Savings Credit Union, Summerland & District Credit Union, and Sunshine
Coast Credit Union would add penetration in the Fraser Valley, Okanagan, and Vancouver
Island regions.
In Ontario, the acquisition of Your Neighborhood Credit Union Ltd., FirstOntario Credit
Union, and Northern Credit Union Ltd. would provide sound expansion within the Toronto
and GTA regions.
Subsequent expansion into the Canadian East Coast via M&A is also possible.
Such expansion is pivotal for Vancity to maintain its relevance and leadership in the evolving
financial sector, ensuring it continues to meet the needs of current and future members
while adhering to its foundational values.
By implementing these strategic recommendations, Vancity can navigate the challenges

ahead, harnessing its strengths to ensure continued growth, member engagement, and a
lasting positive impact on communities and the environment.
165
Canadian Credit Union Association. (2023). The Largest 100 Credit Unions - 2Q 2023, pgs. 3-4.
55 | P a g e
References
Bank Act, S.C. 1991, c 46. Retrieved from https://laws-lois.justice.gc.ca/PDF/B-1.01.pdf
Canadian Credit Union Association. (2023). National Sector Results - 3Q 2023. Retrieved from
https://ccua.com/app/uploads/private-files/3Q23SystemResults-05-Dec-23.pdf
Canadian Credit Union Association. (2023, September 25). The Largest 100 Credit Unions - 2Q
2023. Retrieved from https://ccua.com/app/uploads/private-files/top100-2Q23_22-Sep-
23-1.pdf
Central 1. (2020, October 20). Central 1 enables thirdstream to deliver customizable origination
journeys on Forge Digital Banking Platform. Retrieved from
https://www.central1.com/news/central-1-enables-thirdstream/
Coast Capital Savings. (2022). Annual Report. Retrieved from

https://www.coastcapitalsavings.com/media/5333/ccs_2022_annual-report.pdf
Coast Capital Savings. (2022). Financial Statements. Retrieved from

https://www.coastcapitalsavings.com/media/5274/ccs-2022-financial-results.pdf
Credit Union Incorporation Act, RSBC 1996, c 82. Retrieved from

https://www.bclaws.gov.bc.ca/civix/document/id/rs/rs/96082_01
Daft, R. L., & Armstrong, A. (2015). Organizational Theory and Design (3rd Cdn. ed.). Cengage.
Financial Institutions Act, RSBC 1996, c 141. Retrieved from

https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/96141_01
First West Credit Union. (2022). Annual Report. Retrieved from

https://assets.firstwestcu.ca/2023/04/11094041/FW-Annual-Report-2022-Full-web.pdf
First West Credit Union. (2022). Consolidated Financial Statements. Retrieved from
https://assets.firstwestcu.ca/2023/04/10141640/FW-Annual-Report-2022-CFS-web.pdf
FP Canada. (2023). Financial Stress Index. Retrieved from

https://www.fpcanada.ca/docs/default-source/financial-stress-index/fp-canada-fsi-2023-
survey-results.pdf?sfvrsn=4500e023_3
Glassdoor. (2024). Vancity. Retrieved from https://www.glassdoor.com/Overview/Working-at-

Vancity-EI_IE39878.11,18.htm
Global Risk Profile. (2023). Global Corruption Index 2023. Retrieved from https://risk-
indexes.com/global-corruption-index/
IBIS World. (2023). Credit Unions In Canada. Retrieved from

https://www.ibisworld.com/canada/market-research-reports/credit-unions-industry/
#IndustryStatisticsAndTrends
56 | P a g e
Kenton, W. (2023, September 27). The Big Five: Here Are Canada's Largest Banks by Total
Assets. Retrieved from https://www.investopedia.com/terms/b/bigfivebanks.asp
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https://www.financialresearch.gov/financial-stress-index/
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Retrieved from Savvy New Canadians: https://www.savvynewcanadians.com/credit-
unions-canada-guide/
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Conduct One. Retrieved from https://pestleanalysis.com/what-is-steep-analysis/
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NY: Free Press.
United Nations Finance Initiative. (2024). Financial Health & Inclusion Commitment. Retrieved
from https://www.unepfi.org/banking/commitments/commitment-to-financial-health-and-
inclusion/
Vancity. (2022). Annual Report. Retrieved from

https://www.vancity.com/SharedContent/documents/AnnualReportArchives/
2022AnnualReport.pdf
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https://www.vancity.com/SharedContent/documents/AnnualReportArchives/
2022VancityConsolidatedFinancialStatements.pdf
Vancity. (2022). Principles for Responsible Banking Self-Assessment. Retrieved from

https://annualreport.vancity.com/_doc/2022-Vancity-Principles-for-Responsible-Banking-
Self-Assessment.pdf
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https://www.vancity.com/about/leadership/board-of-directors/election/
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57 | P a g e
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58 | P a g e

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Table of Contents

Vancity Company Overview:

This general organizational

Vancouver City Savings Credit Union,

However, the idea of an inclusive,

As a member-driven, community-focused financial cooperative, it boasts 54 branches across

Vision for a Transformed Economy10

Vancity’s plans and actions are

Distinctive Features of Vancity:12

Products and Services:13

Key Financial Figures:14

Organizational Strategies: Analysis of Vancity’s Strategic Goals and Effectiveness

Vancity’s Goals and Objectives

Strategies to Achieve These Goals

Strategic Orientation Analysis

Adaptive Strategy to External Changes

Operational Dynamics Analysis

Vancity’s strategic and operational approaches demonstrate a well-rounded and sustainable

Classification According to Miles and Snow

Vancity's Organizational Structure

Leadership and Governance

Strategic Departments and Subsidiaries

Effectiveness of Vancity’s Organizational Design

Assessing Vancity’s Organizational Effectiveness

Why use the Resource-Based View (RBV)

Resource-Based View Analysis

Conclusion and Strategic Implications

Why use the Internal Process Approach

Internal Process Approach Perspective

Vancity’s Internal Processes

Internal Process Approach Analysis

Conclusion and Strategic Implications

Why use the Goal Approach

Vancity’s Stated Goals and Objectives

Conclusion and Strategic Implications

Why use the Integrated Effectiveness Model

Integrated Effectiveness Model

Analysis of Vancity’s Organizational Effectiveness

Conclusion and Strategic Implications

Why use the Balanced Scorecard Model

Balanced Scorecard Model Analysis

Learning and Growth:

Conclusion and Strategic Implications

3BC Analysis and Recommendations:

Analyzing Vancity’s Organizational Effectiveness

Vancity’s Key Resources and Capabilities

Organizational Structure: A Vancity Analysis

Why Vancity's Hybrid Structure Differs From Other Structural Models

Definition of Vancity's Hybrid Structure

Pros and Cons of Vancity's Organizational Structure

Conclusion and Strategic Implications

Summary of Products and Services Provided by Vancity

Consumer Lending Products and Services64

Business Banking Portfolio67

3BC Analysis and Recommendations:

The critical macro social trends affecting Vancity’s performance are:

The key technological trends affecting Vancity’s performance are:

The key economic trends affecting Vancity’s performance are:

The key environmental trends affecting Vancity’s performance are:

The key political trends affecting Vancity’s performance are:

3BC strongly believes this is a marketing differentiator to be exploited as a recruitment strategy

While we have yet to interview a

International Environment – Organizational Design