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BECU ($11.5B, Seattle, WA) was founded in 1935 to serve employees of The Boeing Company. What began as a cooperative with 18 members and $9.00 in assets has grown to include more than 826,000 members and more than $11.5 billion in assets. The state-chartered credit union is the largest in the state of Washington and the fourth-largest nationally. Although is has more than twice the number of full-time equivalent employees than its asset-based peers, those employees are also more productive. BECU serves 716 members per employee compared to 482 for credit unions with more than $1 billion in assets. As of June 30, 2013, its employees originated $2.1 million in loans per FTE versus $1.0 million for similarly sized credit unions. Likewise, it generated more net income per employee than its peers — $94,933 versus $29,072. Tom Berquist is the senior vice president of member strategies at BECU.
A little more than two years ago, we had a strategic conversation with our board about the role of innovation at BECU and how to weave innovation into our culture. We figured we were not going to invent hardware or the like, so we felt we should move away from thinking about innovation as solely the realm of technology.
What we could see was room for innovation in terms of service, processes, and similar areas. Our initial effort included conducting an innovation audit and developing an innovation playbook with the help of a professor who teaches innovation at the University of Washington. At roughly the same time, we learned about a San Francisco company called Spigit that produces software to tap the creative resources of many people at once. We decided to implement our playbook using the Spigit platform in an attempt to stimulate ideas for innovation from among our 1,100 employees.
The Ripple Effect
We have internally branded the Spigit software, which is essentially a crowdsourcing platform, as the “Ripple Effect.” It allows us to solicit ideas from a large population, in our present case, BECU employees.
The software allows for different “challenges,” or problems the population is meant to address. For example: How do we increase auto loans? How do we increase the number of people contributing to the BECU Foundation? How can we better promote health and wellness? These are all challenges — framed a bit better — we have actually put before our employees. The software also allows us to put a challenge before a smaller group, such as employees in a division or employees on a special team.
Once we post a challenge, employees post their ideas as solutions to challenges to the Ripple Effect website. Each challenge has an ideas and suggestions deadline, say three weeks or a month. Everyone can view the solutions to challenges posted by employees, and anyone can vote on an idea, similar to a “Like” on Facebook, or offer a comment or refinement. This is when the platform begins to show its real power. Ideas flow in — as do thoughts, suggestions, and refinements — and evolve. They improve with the input of scores and through hundreds of employees participating in the challenge. In time, the ideas that attract more positive votes and positive comments than the others rise to the top.
Management then scrutinizes ideas that have risen to the top. Some require analysis from expert teams. An idea concerning ATMs, for example, would go to an expert team in ATM operation. If an idea passes muster with a team, then upper management considers it for implementation.
Success At BECU
We really like the employee engagement we’ve witnessed. More than 80% of our employees have at least accessed the Ripple Effect system to have a look. Moreover, 46% of our employees have submitted an idea or commented on one; this is a considerably higher active participation rate than we expected. We have received more than 500 ideas, including those submitted to not only challenges but also a section welcoming ideas to help the credit union or its members. All ideas together have received more than 20,000 votes and more than 7,000 comments or refinements.
To this point, we have implemented 11 ideas that arose out of this Ripple Effect effort and are considering four more. We are pleased with the level of engagement. This is a way for the entire employee body to contribute ideas in a transparent manner. People can see their ideas, read comments on them, see how they might be refined, and track whether their ideas are rising or falling among others.
Ideas flow in — as do thoughts, suggestions, and refinements — and evolve.
— Tom Berquist, SVP of Member Strategies, BECU
This is a huge improvement over what we had before, which was something like a suggestion box. Employees were free to make suggestions, but it was like placing the idea into a black box. Employees never knew what happened to their idea, if it came close to further development or was simply overlooked or forgotten. There was no feedback mechanism. Not surprisingly, employees lost interest. What we like about the Ripple Effect process is that people can see if an idea is gaining traction or not. They can see comments on how their idea might be enhanced, why it would not work, or solutions to obstacles that might otherwise hobble it. We have been especially pleased with the way this effort has worked out culturally, that is, among our employees. People are contributing; that has helped the credit union and it has helped them.
When an idea rises to the top, we have a more formal means of getting in touch with people promoting the idea, prompting discussion, and ultimately saying why upper management is or is not moving forward on the idea.
Besides those mentioned above, challenges we have put forward include (not in these exact words): How can we do better at problem resolution when members call in? How can we retain more auto loans? How can we create more time to deliver better service to members?
Something we have had to wrestle with is how to handle ideas that have risen to the top. Some ideas are small enough for a small team or department to implement. For larger, cross-functional ideas that require significant resources, we must prioritize them in light of other projects. With these larger ideas, the time lag from recognition of a good idea to implementation is a concern, but I believe we have worked out a path for this.
Assessment And The Next Step
This program offers the power of focus and taps people in a way that yields a better result. You can frame a question that really is a priority for the organization and get people thinking about it and working on it. The focus is sharper and the result is better matched to the problem. Creating a challenge that is focused on a specific issue tends to yield better results, ones that are strategically aligned with your priorities
If we deem this platform successful, we would consider expanding it to tap into the thoughts of members. This would require more resources and we are not quite ready to do that. But it can be done. Starbucks has a place on its website, called My Starbucks Idea, for soliciting thoughts and suggestions from customers as well as commentary and voting on those suggestions. Reaching out to members in this way, of course, would require some software rebranding and a different dimension of management. But we are at the point where we could begin thinking about it.
How We Got Started
You may be interested in how we got started with this activity. As mentioned, we were looking at our culture and felt we were not living up to our expectations at fostering innovation. Our chief information officer had been talking to people about innovation and learned about a professor at the University of Washington, to whom we reached out. He said innovation does not have to be by luck and it does not have to be focused on technology. A company can stimulate a culture of innovation, so we tried to define what innovation meant to BECU and how we could purposefully weave innovation into our culture. The professor did an “innovation audit” of BECU and felt that with a little bit of infrastructure and leadership, we could build on our member-oriented focus.
Then we learned about Spigit. Not only did we lease its software, we also had its people come in to do a considerable amount of consulting, which I think proved beneficial. We made a concerted effort to roll out the initiative to the employees on the afternoon of an all-employee meeting. We demonstrated how the system was going to work so everyone received the information and introduction at once. We also used the event to kickoff our first challenge. Since then we’ve had employee-wide challenges as well as a number of smaller team-oriented challenges. The results have been very encouraging.
— As told to Brooke C. Stoddard