WASHINGTON—IH Mississippi Valley CU is spending significantly less time counting cash, closing loans and opening new accounts thanks to a new efficiency program that revamped 24 of the credit union’s processes.
IH Mississippi Valley underwent CUNA’s Process Analysis & Optimization (PAO), a collaborative program between CUNA and FI Strategies, St. Louis, that helps credit unions recognize internal inefficiencies and take steps to correct them.
The benefits of efficiency to CU competitiveness is no secret, noted Paul Roberts, chief consulting officer with FI Strategies. But he reminded that efficiency is not just about reducing operational costs, but also involves eliminating unnecessary employee activity so staff spend as much time with members as possible.
CUNA and PAO last year completed a two-year program at the $962-million IH Mississippi Valley in Moline, Ill., during which six “think tank” sessions with staff members throughout the credit union discovered various procedural inadequacies and areas of inefficiency. The think tanks evaluated the credit union’s processes and developed action plans to streamline them.
Some of the improvements the CU made as a result of PAO, according to CUNA:
- A new cash counting system saves 12 working weeks per year
- Reduced member service downtime
- More focused, goal-oriented board reporting
- More efficient labor allocation and process ordering
- Home equity processing time streamlined by 40%
- Auto loan processing time decreased by 50%
- New member account opening process streamlined by 25%
Big time savings resulted from identifying the CU’s inefficient cash counting process. Prior to implementation of PAO, when cash came in, two staff members would leave the service line to count it, taking 45 minutes.
“Multiply that 45-minute process by 14 branches, and the credit union found that they had received and counted $108 million in cash over the course of a year—and were off by only $10,” said Angela Prestil, director of business development at CUNA. “By revamping their cash counting procedure, supervisors were able to reallocate 476 hours—12 working weeks—to coaching and developing their staff. Additionally, they were able to redirect two staff members to more important tasks, such as establishing new accounts, loan generation, mortgages and improving member service.”
Get Staff Involved
Paul Roberts, FI Strategies
Roberts said improving process efficiencies works best when staff are heavily involved in identifying issues and developing solutions.
“With PAO, credit union teams are empowered to recognize procedural inadequacies and propose new ways to correct them,” he said. “PAO is based on proven principles of industrial engineering but also incorporates a component where we are not the ones who come in and do all the work. We facilitate the process so it’s self-discovery—and the credit union and its employees create the solutions to the issues.”
Roberts said that type of approach not only is most effective at identifying the issues that need fixing, but also at getting buy-in from staff once changes are in place.
“This way the change becomes engrained in the organization,” said Roberts. “It all stems from people looking in the mirror and asking why they are doing things a certain way.”
Prestil said that “teaching staff to fish” works best in a sales and service culture.
“With PAO, we believe in teaching credit unions the skills they need to be successful so they carry on long after we leave,” she explained.
Roberts said the program at Mississippi Valley began by asking staff three questions:
- What is the dumbest thing you do in your job every day?
- What are the most time-consuming things you do each day?
- If you were boss for a day, what would you change?
“We got a huge number of responses from the IH team,” said Roberts. “From those comments we identified a handful of very specific issues that were causing frustration among staff and were taking away from time they could spend providing members with service and selling them the products they need.”
The PAO team then prioritized the list of issues/inefficiencies and broke them out into groups of four. Each round of PAO, which lasted about three months, addressed four issues. In the end, the credit union tackled 24 projects over two years.
“There was nothing that was ‘off the table,’” explained Roberts, who said the program includes a 1.5-day classroom course on the basics of industrial engineering. “We teach them to look at productivity from various different perspectives.”
When addressing an issue, employees were asked to flowchart work processes, ask why steps in a process were being taken, and if steps could be removed, done another way, or consolidated.
Too Many Manual Forms
Roberts said reviews often found staff were relying too heavily on manual forms, taking information from members that was not used a great deal or even needed, and that documents were often being audited too many times.
“We asked why they were auditing a document four times when twice would do,” said Roberts, who added that a lack of strong systems integration often led to work redundancy.
Like many credit unions, IH Mississippi Valley needed to become more efficient, as resources were being wasted.
“By engaging in the PAO program, the credit union significantly enhanced their culture of sales and service,” said Prestil. “Armed with new approaches to efficiency, staff across the credit union have been empowered to overhaul burdensome procedures, use resources more wisely, challenge the way their processes are handled and initiate positive change.”