Texas Dow Employees Credit Union was founded in 1954 and now serves members south of Houston along the Texas Gulf Coast in such communities as Texas City, Brazoria, Lake Jackson and Victoria. It has more than $1.3 billion in assets and more than 125,000 members. It has fourteen branches. To this time, it has worked at serving the small communities rather than moving into the larger cities.
You tried to make over the credit union when you arrived in 2003?
ES: Yes. The Board hired me to transform the credit union. There had been little investment either in management or in building up the infrastructure. The credit union had about $700 million in assets and was 40% loaned out. But what I really decided to work on was the internal culture.
ES: For a time we looked at two different models. One I’ll call the Wal-Mart model: low touch, high volume, low cost, transaction-oriented, no frills. The other was the opposite: high touch, less emphasis on transaction, very personal, exceptional service to please every member at every experience. Naturally, as a small Texas town credit union we chose the latter, which is much more like small Texas town culture. We decided to stay in small communities but to win over the hearts and minds of the people in those communities. But from where we were internally I knew it was going to be a long hard haul.
Your emphasis was on the experience?
ES: Yes, I came from a retail background. One thing I was taught was that retail is a “horizontal experience.” Customers are not going to compare their experience at your institution to theirs at other banks and credit unions (incidentally, I think it is a big mistake for credit union people to think along these lines). Rather customers are going to compare their experience with you to experiences they had with other retailers during their day. If they interact with you between going to the post office and the DOT to renew a driver’s license, they are going to compare you favorably. If they sandwich you between calls to Williamson-Sonoma and Land’s End, they are likely to think you come in third. We decided we wanted to raise our retail experience so high that no matter what persons did during the day, they would think their experience with us was the best, in fact a high point of their day; that way they would surely remember us.
So you hired trainers for your front line people?
ES: No — quite the opposite. We knew many institutions would do that, namely start with the front line people and leave it there. We took a completely different approach. We figured that unless and until our own people began treating each other with the kind of respect and interest we wanted our front line people to treat members, the front line people would not be acting the way we envisioned. We determined that the place to begin was at the very top, at senior management, and that we would spread down.
You trained the senior staff?
ES: Not right off the bat. What we did was hire a third party for a survey and evaluation of all 17 of our internal-service departments, measuring them on how well they delivered service to other departments, and especially to our employees who serve members. All employees were asked how well each department delivered service; then from the raw data we ranked the departments 1 to 17. It made everyone conscious of delivering good internal service and working at doing better. I was ranked myself (though no one else was evaluated by name). We didn’t stop there. We conduct the survey every six months. Departments rise and fall in the rankings. Some heads of low ranking departments were replaced with persons who fit more into what we were trying to accomplish – serving those who serve members.
The internal culture changed?
ES: Yes, but it was more difficult than you could imagine. We worked this way for two years, never once measuring member opinion on how the front line was serving them – that would come even later. We really wanted to get the internal service culture right. Internal service department people began to smile when they delivered service, ask if they had accomplished what was asked of them, asked if there was anything else they could do, made sure the person requesting service had the server’s contact information and thanked the person for calling to get the service. Accounting, IT, HR, Marketing, Facilities, -- all internal service departments were evaluated and ranked. We published all of the results from every internal service survey to everyone, the good and the ugly together. It was tough. After more than two years of this, we thought we were ready and implemented the culture through the front line staff. We now enjoy a 97% satisfaction rate with members, with more than 30% extremely satisfied and more than 35% highly satisfied.
You’ve been able to sustain this?
ES: We have a saying – it’s on all of my emails: “If I’m not serving a member I’d better be serving someone who is.” We discovered that it wasn’t the employees who needed work but the senior and middle management. Once they were imbued with this new service culture, the front line people took to it readily.
All this has paid off?
ES: Very well. When we move into a small community we always do exceptionally. We offer better convenience and hours than the existing banks. People spread the word. We moved into one town of 2,800 people and opened 1,000 new accounts in less than 12 months. We have 90% penetration in our main markets; our worst penetration is 40%. And we continue to train heavily. Our front line training area even has a mock teller line; they train with everything they will deal with at a real branch, down to the cash and vacuum tubes. We employ six full-time trainers and train for six weeks, whereas before training was a half day of orientation and then out on the floor. And we still evaluate all our internal-service departments twice a year. A culture of treating everyone with the highest respect and the best service is a winning model.