6 minutes
The challenge with process improvement is that it is not for the faint of heart; it requires rebels who are willing to step up and tear processes to shreds, and rebuild them from the ground up.
It is not human nature to constantly challenge the status quo. It takes a rebellious nature to question everything and accept nothing at face value. The death stroke of a good process improvement plan is the belief that everything is fine because “that’s how we’ve always done it, and it’s never been a problem.” A huge advantage non-traditional competitors have is that they are not bogged down with legacy thinking and processes.
Rebels are required to shake things up.
Process improvement is a habit credit unions can create to find better, faster, and easier ways of bringing value to members and employees. In some credit union circles, process improvement is slowly gaining traction as one of the most important tools in a credit union’s hip pocket.
Here are seven tips for better process improvement results that we compiled from our experience working with hundreds of credit unions across the country.
Tip 1: It is a mistake to not involve the doers.
The only way to effect lasting change in an organization is if the people responsible for executing the change are brought fully into it. A process improvement initiative should involve the “doers” of the process, allow them to give their fair share of input and get their buy-in by involving them throughout the process. When this happens, we hear senior management teams explain that the process improvement led to a culture change in their credit unions. Involving the “doers” gets the front-line staff thinking differently, and they start to uncover other opportunities that might have been overlooked.
Tip 2: Clearly articulate the beginning and the end.
Before starting process improvement, participants should agree on what is the beginning and end of the process. For instance, the beginning of a loan origination process could be “a member fills out an application online.” The end of the loan origination process could be “a decision is made, and the member is notified” or it could be “the loan is funded.” This type of specificity will help avoid scope creep and lead to faster improvements.
Tip 3: Identify what is non-value-add.
Key objectives of process improvement include eliminating waste by identifying and removing non-value-add activities, and ultimately improving products, services, or support for internal and external customers. Achieving these objectives creates opportunities to spend more time on value-add activities. Everyone wins when this happens. Mapping the current process will help with identifying what is non-value-add.
Hint: Rework is one of many non-value-adds. An example of rework is an underwriter having to review a loan application more than once because the loan application was not completed appropriately by the loan originator.
Tip 4: Implement the easy wins as soon as possible.
Doing so creates momentum.
Change takes work. If it truly is a change, it can be quite uncomfortable. Train yourself and your team on how to change. This can ignite the rebel side you may be looking for in your team.
Proactive senior management involvement saying, “Yes, let’s do it!” on the easy wins helps get people used to the idea of change. It also lets the team know senior management is focused on process improvement and is genuinely interested in employee input. This sends a clear signal that process improvement is not senior management’s flavor of the month.
Tip 5: Make the improved process a habit.
Hab·it (hab•t/noun): A settled or regular tendency or practice, especially one that is hard to give up
In the control phase of process improvement, measures are put into place to ensure that the new process “sticks.” This is an essential component that is often overlooked. To help make the improved process a habit:
Develop supporting methods/documentation to sustain full-scale implementation.
- Lock in performance gains. Use mistake-proofing or other measures to prevent people from performing work using their old ways. An example of mistake-proofing is quickly, visually, and automatically highlighting errors or missing data so that the likelihood of incomplete or incorrect work is reduced.
- Monitor the implementation and measure success daily/weekly/monthly.
Tip 6: Know your numbers.
Far too often decision-makers really don’t know their numbers. Counting the right business every day is a must. In other words, make sure you establish the relevant measures of success for the business objectives you are trying to achieve.
For example, many loan systems have the data to help decision-makers understand how many minutes or, unfortunately, days it takes to decision a loan. Taking that data and turning it into easily understandable decision information is a necessary step toward effective process improvement.
The following is an example of a credit union’s average time to decision and average time to fund. At the beginning of their process improvement endeavor, the credit union’s leaders thought they were decisioning consumer loans in 24 hours—48 at the longest.
After we asked them to support their assertion with data, they discovered that the average time to decision consumer loans was actually 4.7 days. The average time from decision to funding was not stellar either (3.1 days). And the average time from application to funding was more than a week! Their jaws literally dropped. As you can imagine, they needed their rebels to solve this issue … fast!
After making several changes—such as restructuring the queue, revamping stipulations, and overhauling internal working agreements—the credit union vastly improved its process, resulting in more approved loans being funded, as illustrated in the graph above.
The credit union has also incorporated slicing and dicing this type of information by credit tier and delivery channel. They know the work is not finished but feel great their revolution has begun.
Tip 7: Walk in the customer’s shoes.
At times, the obvious is not so obvious. Always look at a process from the end-user’s perspective, whether internal or external customers—like our example credit union, above, looked at how long members had to wait for the loan to be decisioned and funded.
A Successful Revolution
You will know your process improvement worked well if you and your team are saying things like:
- “Thanks to our improved processes, we are able to handle the increased volume without adding staff, and our queues are never backed up like they were in the past.”
- “We actually have members commenting on how easy it is to get a loan.”
- “We learned it’s not about the new software. It’s about new processes and the mindset to utilize the enhanced capabilities.”
- “Focusing on process improvement helped us change our thinking in so many other areas of the credit union.”
- “We cut our processing times in half, and are booking substantially more loans without taking on more credit risk.”
- “We actually made it easy for people to join our credit union because we finally removed huge roadblocks from the new member process.”
It seems like when process improvement goes well, the clouds part, the sun comes out, and life just feels easier. Or maybe it’s the mischievous joy that uplifts your mood when a successful revolution has been waged and won. Either way, the credit union wins—and so does its membership.
Charlene Leland and Dan Myers are vice presidents of c. myers corporation, Phoenix.
