Interra Credit Union’s (Goshen, IN, $598.8M) shift from an organization with a centralized decision-making process to a more sales-oriented culture gave its senior management team more time to focus on strategic planning.
“Organizational change is extremely difficult,” says Interra CU’s chief financial officer Rex Hochstedler in a recent webinar for Callahan & Associates. “Even when it’s necessary and wanted, it can be painful.”
Interra CU was formerly called Farm Bureau Credit Union but changed its name — which is a combination of “In” for Indiana and “terra,” which means land — in 2008. It started its organizational transition at that time to reduce the number of direct reports to its core management team to improve coaching effectiveness and to streamline decision making.
Interra’s former organizational structure had a centralized senior management team of a CEO responsible for 15 direct reports, a vice president responsible for 16 direct reports, and a vice president of operations responsible for 14 direct reports. The three managers had been at Interra “a majority of their working lives,” Hochstedler says, and had an average tenure of about 25 to 30 years. They had seen it grow to a $50 million credit union to a $600 million credit union.
But the credit union’s organizational structure made it difficult to make significant changes or for supervisors to effectively mentor their employees. “Something of a bottle neck had occurred,” Hochstedler says.
So, Interra linked with a consulting firm to shift to a more pro-active sales and service culture in which the credit union would better anticipate member needs and offer solutions. The transition took about three years for employees to move away from simply taking orders on the front line to engaging in a deeper relationship with members.
To help, Interra brought in software that helps staff get a full picture of the members’ accounts and suggests areas where they mught be able to save. Then, Interra implemneted an interneral service survey for employees to offer feedback about their work experience and how they engage with managers.
Interra worked with Venture Credit Union Co-operative Society for help with corporate restructuring to refocus from day-to-day aspects to more strategic focus. The moves included: broadening the senior management team with two more vice president executives, initiating weekly meetings to ensure they were following through with plans and communicating clearly, and putting together a concrete succession plan.
The changes reduced the number of direct reports to four or five employees per executive. Then, executives could practice more active coaching, with regular supervisory meeting establishing goals and working toward those goals.
“The reorganization allowed us to put in a more rapid decision making process,” Hochstedler says. “This has streamlined the things the senior management team is responsible for and allows us to focus on priorities. It’s allowed us to give up some control and to put strong people around us who we trust to use their expertise.”
This restructuring enabled Interra to add other new positions. The vice president of operations was originally responsible for 10 branch managers, which made it difficult to conduct transitional coaching. So the credit union added two regional branch managers who are now each responsible for working with five branches, allowing them to work with the branch managers directly.
On the lending side, Interra promoted its commercial loan officer to a senior loan officer who was responsible for all other loan officers. Then, it designated a loan officer for mortgages, one for consumer loans, and a third responsible for commercial lending. It also hired in marketing and business development areas.
“Our goal is to try to provide exceptional service to every member every day with every transaction,” Hochstedler says. “We want to be the easiest place for our members to do business. Really the key is identifying needs and offering solutions.”