What Does This Credit Union Look Like From The Member Perspective?

Steve Webb, COO of Neighbors Federal Credit Union, discusses how the credit union is realigning its strategy and turning its design upside-down in the process.

 
 

Neighbors Federal Credit Union ($736.9M, Baton Rouge, LA) was started by a handful of educators in 1954 with a shoebox, a couple hundred dollars, and the goal of making financial services available to school system employees in their area. Now, with $737 million in assets and roughly 75,000 members, Neighbors is the largest community chartered credit union in the state of Louisiana. Neighbors has undergone a variety of changes, but its mission has stayed the same: Enhance members' financial well-being and be a partner in the communities it serves.

In this Q&A, Steve Webb, COO of Neighbors, discusses how the credit union is approaching a new alignment strategy and why it is turning the traditional organizational design model upside-down in the process.

What does Neighbors Federal Credit Union’s organizational structure look like today?

Steve Webb: Our organization is broken down by the traditional front- and back-office functional areas. However, one of our major strategic initiatives this year is to develop a strategy to re-align the organization’s structure. Most org charts are designed from the top-down. They start with the board of directors, and the CEO reports to the board. From there, the executive vice president is over the retail functions and the executive vice president/chief financial officer handles back-office functions such as accounting and investments. We’ve used this model for years, but the time has come to take a fresh look at how we are organized — starting from the member’s perspective.

Steve Webb, chief officer of operations, Neighbors Federal Credit Union
Steve Webb, Chief Officer of Operations, Neighbors Federal Credit Union

Why are you rethinking the organization’s design now?

SW: New technology has blurred the lines between the front- and back-office. For example, mobile banking began in the back-office and ownership in the current structure landed in IT. However, mobile banking is a major front-office/member interaction channel. We have to move beyond asking “is the technology working?” and move toward asking “are we serving our members effectively through this channel?”  

By starting with the member’s mindset, we can organize for maximum efficiency and deliver the best service. We’ve been evaluating experiences. For example, if a member calls with a question, how many people do they go through before they get the answer they need? As a credit union, we need to put the right resources and skill sets at the front-line so we can meet members’ needs quickly and easily. Today, that might involve knowledge and skills that used to be considered “back-office.”

How is the credit union developing its new strategy?

CU QUICK FACTS

Neighbors Credit Union
data as of 3.31.15
  • HQ: Baton Rouge, LA
  • ASSETS: $736.9M
  • EMPLOYEES: 228
  • BRANCHES: 12
  • 12-MO SHARE GROWTH: 10.30%
  • 12-MO LOAN GROWTH: 12.49%
  • ROA: 0.47%

SW: We have a group of vice presidents from various functional areas of the credit union working collaboratively to design a new organizational structure for the future. One person is running point on this project and has assembled a team of four other individuals out of the fourteen VPs we have. This management sub-set covers an assortment of areas such as accounting, retail, and lending and periodically presents its recommendations to the full management team for feedback.

Has this been a smooth process?

SW: Developing a new “alignment strategy” is one of our key strategic goals, but it is not without its challenges. We’ve asked the VPs to take themselves out of the equation completely, which can be difficult. We want them to visualize what the credit union would look like if they started from scratch today. How would they organize and design it to best serve the member? They can completely eliminate positions and restructure entire departments. Their current positions, as they know them today, might not even exist as they design the best long-term solution.

No one is going to lose their job, of course, but we need to look at things differently and not be limited by traditional thinking. For example, we have an entire department called “back-office operations” that handles online banking, debit cards, and a host of other things. We envision this will change quite a bit with some functions going to the finance/accounting area and others becoming a new, member focused department.

How are you incorporating member feedback?

SW: We have two member feedback programs. A mystery shopping program where members can shop and grade us on remote channels and ongoing Net Promoter surveys. Member feedback, particularly comments, are very telling.

We review the feedback daily and use it to identify opportunities for improvement or follow-up with members when needed. The overwhelming majority of the comments are favorable, but even within positive comments we can discover new opportunities to serve our members. Listening to the members is vital to ensure the credit union remains successful in the future.

When does the credit union plan to implement the new alignment strategy?

SW: We’re on our third iteration of the new org chart and are still making adjustments. We are also in the midst of a number of other major initiatives, including a core conversion and the retirement of our CEO at the end of the year. The next six to 10 months will be a period of major transition for the credit union, but our goal is to be ready to present a fully vetted alignment plan to the new CEO that the entire executive and management teams have approved.

Our goal is to be ready to present a fully vetted alignment plan to the new CEO that the entire executive and management teams have approved. 

That plan might shift based on the new CEO’s vision, but as an industry we are all challenged by how to best organize to efficiently serve members through new channels and new technology. It’s time to break the old model and build a new one.

 

 

 

May 18, 2015


Comments

 
 
 
  • I applaud your hard work Steve Weber on this ground breaking effort to align to the member view. That is hard work! I am very interested in watching to see if this effort can be successfully executed from an insider view only. My experience tells me that creating the transformational changes you desire are very difficult when the team has been shaped from the same cultured from the same paradigms. I don't want to rain on our parade but really appreciate the challenge you have set for your self and the organization. I encourage creditunions.com to track and report on your ongoing process so others can learn from your successes and failures. Your journey is unique, admirable and would be considered a BHAG even by Jim Collins' standards.
    Rich Jones