Don’t Trust The Process. Rip It Apart.

Formalizing a process improvement program has helped IAA Credit Union develop employees and improve efficiency.

 
 

Top-Level Takeaways

  • For years, process improvement was a part of every employee’s role at IAACU.
  • In 2016, the credit union introduced a team approach to engage employees who wanted to make the credit union more efficient and provide a better member experience.

CU QUICK FACTS

IAA Credit Union
Data as of 09.30.19

HQ: Bloomington, IL
ASSETS: $264.1M
MEMBERS: 16,871
BRANCHES: 3
12-MO SHARE GROWTH: 6.1%
12-MO LOAN GROWTH: 6.4%
ROA: 1.16%

The path to process improvement at IAA Credit Union ($264.1M, Bloomington, IL) started in 2013. That’s when the credit union’s CEO, Sean Wells, started an informal audit that reviewed operations and processes more through the lens of the member, rather than the employee, experience.

He required every employee of the credit union — more than 40 — to focus on prescribed processes and brainstorm ways to improve them, starting with the mortgage application process.

“We asked everyone to get together with their teams for a few hours per week over the course of a quarter to identify and present two ideas on how to improve the process,” Wells says. 

It worked at first, but in the months and years that followed, enthusiasm waned. 

“Some were into it,” the CEO says. “Others just wanted to focus on their day-to-day jobs.”

By 2016, requiring all employees to participate in process improvement had stopped working, but IAACU wasn’t ready to give up. Instead, it created a formal process improvement program, the internal branding team, that gives future leaders an opportunity to develop stronger workflow processes for the credit union.

Training For Green Belts

Six Sigma is a well-known training methodology popularized in the 1990s by General Electric and has historically been applied to process improvement at manufacturing and construction firms; those who follow its methodologies do so by using empirical and statistical methods to remove “defects” in a given process.

Sean Wells, CEO, IAA Credit Union

“Six Sigma teaches you to improve a process by getting it as close to zero defects as possible,” Wells says. “We thought, that’s exactly what we’re trying to do.” 

As such, Wells knew he wanted Six Sigma to be a foundational block in IAACU’s process improvement team.

The team carries up to six employees at any one time, and employees must apply for a spot on the team. Team members serve a 24-month term, with the option to extend 12 months at a time, during which IAACU offers developmental training, including off-site training and conferences as well as mandatory yellow or green belt Six Sigma certification in addition to their assigned process improvement projects.

The credit union’s proximity to Illinois Wesleyan and Illinois State universities as well as two community colleges means the cooperative has a pool of young employees from which to recruit. Unfortunately, these employees often work while they are in school and move on to greener pastures once they’ve graduated. Development opportunities like Six Sigma gives employees a reason to stick around. 

“We expect so much from our people,” Wells says. “We want to give back to them, too.”

IAACU has contracted an outside black belt to mentor its team. The black belt has thus far prepared two of its yellow belts to become green belt certified.

Wells, an Air Force veteran with a background in process improvement, considered Six Sigma to be particularly valuable for the credit union’s broader goal. 

“In a past job, I ran a department of 25 project managers focused entirely on improving the product,” the CEO says. “We wanted the Six Sigma methodology because it’s so focused on the process and not the product.”

Making The Team

Employees must apply to join the process improvement team; those in supervisory roles or higher are ineligible. The application has three questions geared toward ensuring the team attracts employees who are eager to learn and work. 

“We’re not looking for those who are going to tell us things would be better if we had free coffee,” says Nick Sosnowski, vice president of operations.

The application asks employees to consider:

  • What role or career path do you aspire to in the next two-to-three years?
  • What goals do you hope to achieve by applying to this team?
  • In your opinion, what areas could most benefit from process improvement?

Wells and Sosnowski weigh the answer to the third question heaviest, as it highlights an applicant’s critical thinking. Together, all three questions paint a picture of how enthusiastic the applicant is.

“The team is more effective when you have people who want to be there and are engaged,” Sosnowski says. “We get more value by finding people who want to take the next step in their professional development.”

In addition to critical thinking, IAACU looks for those who are member advocates, great teammates, change leaders, and active communicators — not to mention results-oriented and business-savvy. Once on the team, members serve a 12-month term and dedicate eight-to-10 hours per month to the cause. Today, there are six on the team.

Process Improvement In Action

To determine which processes IAACU needs to improve, Wells and other senior leaders grade processes based on member impact or efficiency. 

“We look for things that boost our brand, create efficiencies, and create return on investment,” the CEO says.  

After leaders identify a process, such as ways to improve the new member onboarding process, the process improvement team digs in. It applies traditional project management frameworks, which include establishing a charter and assigning an internal project sponsor, before overlaying the Six Sigma methodology.

“The team creates a project charter that outlines a clunky process they believe can be improved,” Wells says. 

To start the examination, team members meet with the process owner to identify project deliverables. 

You’re looking at things empirically. You don’t have the opportunity to say, ‘Well, I don’t like it.’

Nick Sosnowski, Vice President of Operations, IAA Credit Union

The team co-opts a meeting room, dubbed a process room, for the duration of the review and begins by interviewing those well-versed in the current process. The process room is filled with white boards and furnished with markers and sticky notes, allowing team members to map out, in detail, every step in the current process. Once that’s done, the team combs through the map, looking for anything that creates friction in the member experience.

“They weed out aspects of the process that are superfluous,” Wells says.

It’s during this step that the consistent framework provided by Six Sigma training becomes especially important. Team members share not only a common language but also a methodology that forces them to objectively review the process at hand, removing the emotional attachment from the review.

“You’re looking at things empirically,” Sosnowski says. “You don’t have the opportunity to say, ‘Well, I don’t like it.’ You’re reviewing metrics: users, time outs, time saved. The truth is clear.”

Ultimately, the team makes a recommendation to the project sponsor, a senior level credit union employee who acts as the final arbiter on whether the recommendation will result in action. All parties involved confer in an hours-long meeting called a tollgate where the sponsor reviews the recommendation, asks pertinent questions, and adds additional insight where necessary. From there, the sponsor runs with the recommendation or tables the project. 

Since 2016, IAACU has relied on the team’s recommendations to improve multiple processes, from ACH payments for loans to the mortgage application. The credit union considers the team a valuable tool in retaining staff and believes it’s a big reason why IAA posts efficiency numbers significantly better than the peer average. To wit, IAACU’s efficiency ratio, 66.3%, bests asset-based peer performance by nearly 20 percentage points. 

“We’re not super hardcore in adhering to the methodology,” Sosnowski says. “If you can get a strong team in a room and ask them how to make a process work better and look at it objectively, it makes a difference.” 

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