Management & Organizational Consulting Accelerating Change and Continuous Improvement: Presented by: Barbara Mahoney, SR VP, HR Leominster Credit Union & Ray Gagnon Gagnon Associates How HR Led the Way at Leominster Credit Union . . .
Feb 10, 2016
Management & Organizational Consulting
Accelerating Change and Continuous Improvement:
Presented by:
Barbara Mahoney, SR VP, HRLeominster Credit Union
&
Ray GagnonGagnon Associates
How HR Led the Way at Leominster Credit Union . . .
Management & Organizational Consulting
AgendaHow it all began at LCUA bit about “making change”GE Work-Out
– Where it came from & how it worksWork-Out at LCU: the “Pilot” PhaseWork-Out becomes “On-TRACK”
– Developing LCU internal change capability LCU: On its own with On-TRACKSummary, Q&A
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LCU’s Change Agenda: How It All Began
Strategic plan – 2001-2005– Key Goal: “Achieve World-Class Productivity”
• Supporting Strategy: “Analyze current business processes to determine if best suited to optimize productivity”
• Organizational agenda: eliminate boundaries, barriers, to X-functional collaboration and teaming – “silos”
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How to Do It?
Two sides of the question:– “We know this stuff better than anyone; we
can do it on our own.”– Value of a “neutral, 3rd party” look?
objectivity?Decide on 3rd party
– Key factor: “GEWork-Out” capability
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LCU Change Objectives Improve:
– Effectiveness & efficiency of key business processes– Member experience
Bring about:– Improved communication– Increased employee knowledge, appreciation and
understanding of practices/procedures in other departments
Break down “silos” to improve teamwork & collaboration across the Credit Union
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A bit about “making change”
“Change has no constituency.”
-- former GE CEO Jack Welch
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Change Management Model Making the Case for Change
– Creating:• a Shared Need• a Sense of Urgency• Dissatisfaction with the Status Quo
Shaping and Sharing the Vision– Describing the Desired Future State– Building a Guiding Coalition
Mobilizing Commitment– Empowering Broad-based Action– Generating Short-term Wins
Making Change Last– Reinforcing/Celebrating Success– Anchoring Change in the Organization
UNFREEZE
TRANSITION
REFREEZE
adapted from Kotter, Tichy, Lewin.
(ADKAR)
Awareness
Desire
KnowledgeAbility
Reinforcement
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Work-Out: After a Decade
“GE had another huge advantage that accelerated our quality effort: we hada Company that was open to change, hungry to learn and anxious to move quickly on a good idea. This learning environment came from a decade-long, soul-transforming cultural initiative called “Work-Out.” Work-Out is a continuing effort to achieve what we call ‘boundaryless behavior’-- business behavior that tramples or demolishes allbarriers of rank, function, geography and bureaucracy in an endless pursuit of the best idea -- in the cause of engaging and involving every mind in the Company.”
-- Jack Welch, former CEO, General Electric Letter to “Share Owners and Employees”
1997 Annual Report
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Work-Out: A Proven Approach GE IBM Philips Frito-Lay Bristol-Myers Squibb Borden Novartis Joy Global Serono
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Work- Out: Empowering Internal “Experts”
Traditional Perspective Work-Out Perspective
Managers(Directive)
Doers(“Salute and execute”)
Internal “Experts,”“ Closest to the Action”
Leaders (Facilitative)
empower
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Work-Out: How it works . . .
Carefully defines initiatives into discrete team ‘missions’ or ‘challenges’– High focus– Fast-track
Enlists cross-functional teams of process owners and those with a vested interest
Uses “guerilla tactics”– “get in, get the job done, get out”
Puts pressure on management to lead vs. direct Engages and empowers “end-users”
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TIME
RESULTS
%
BAU Scenario
Work-Out Scenario
Accelerating Positive Change
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Work-Out: Implementation Phases
Design
Conduct
Implement
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Design Phase: Components Due diligence
– Sponsor’s “take”– Interviews
Design Team Meeting– define Team Challenge, Scope, Metrics, Deliverables – select participants; size session
Reference Data Package Logistics
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Conduct: Kickoff and Overview
Team#1
Team#2
Team#3
Team#4
Decision-Making
TeamLead
Facilitator
This is going to be great!!Sponsor
All teams start the session together with the Sponsor giving the overview of objectives and expectations
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Conduct Phase: Sample AgendaDAY ONE DAY TWO DAY THREE
8:00 KICK-OFF 8:00 Start 8:00 Start
Bus. Challenge - Spons. Team Work Sessions Team Work Sessions 8:15 Topic Overview - Champ. “Main Tent”8:45 Process Overview – GA “Main Tent”
Finalize Presentations
Teams Start-up
12:00 LUNCH 12:00 LUNCH 12:00 LUNCH
1:00 Team Work Sessions Team Work Session 1:00 Practice Presentations
3:00 “TOWN MEETING”-- Team Presentations-- Decisions
6:00 Adjourn DAY ONE 6:00 Adjourn DAY TWO 6:00 Adjourn DAY THREE (Possible evening work)
Decision-MakersBriefing
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Issue:
Recommendation:
Cost/Benefit Analysis:
Action Steps: Who: When:
Owner:
Work-Out Team Output: Action Plans
1.
2.
3., etc.
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Issue # 2: –Global standards for quality control, testing and manufacturing of
rollers are inconsistent between the regions due to:– Different product designs– Different machinery and requirements to produce rolls– Inherited production methods
Recommendation # 2–Document global standards for roller quality control, testing and
manufacturing practices Owner
–Daryl Robinson & Carl Weeks
Work-Out: Sample Team Output
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Cost/Benefit Analysis Benefits
–Creates documented global standards for:• Manufacturing processes• Quality Control• Testing• Packing & Shipping
–Creates best practice for manufacturing using knowledge from existing regional processes
–Potential increase for productivity Cost
– General travel and documentation cost
Work-Out: Sample Team Output
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Action (What?) Who? By When?1 Create contents template to identify
information to be included in manualDaryl RobinsonCarl Weeks
June 30 2010
2 Collate and analyze existing regional data for the following functions:
–Manufacturing process–Quality–Testing–Packing & Shipping
Daryl RobinsonCarl Weeks(appropriate regional mgrs.)
July 31 2010 for some items.
Other items - TBA contingent on completion of roller GDM
3 Use data to create global standardized procedures and rules for each function
Daryl RobinsonCarl Weeks
TBA
4 Document procedures and rules into a global manual for each function
Daryl RobinsonCarl Weeks
TBA
Work-Out: Sample Team OutputAction Plan for Recommendation # 2
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Conduct Phase: Sample AgendaDAY ONE DAY TWO DAY THREE
8:00 KICK-OFF 8:00 Start 8:00 Start
Bus. Challenge - Spons. Team Work Sessions Team Work Sessions 8:15 Topic Overview - Champ. “Main Tent”8:45 Process Overview – GA “Main Tent”
Finalize Presentations
Teams Start-up
12:00 LUNCH 12:00 LUNCH 12:00 LUNCH
1:00 Team Work Sessions Team Work Session 1:00 Practice Presentations
3:00 “TOWN MEETING”-- Team Presentations-- Decisions
6:00 Adjourn DAY ONE 6:00 Adjourn DAY TWO 6:00 Adjourn DAY THREE (Possible evening work)
Decision-MakersBriefing
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The Work-Out “Town Meeting”
Team#1
Team#2
Team#3
Team#4
Decision-Making
Team
LeadFacilitator
Sponsor
Yes No F.S.
xx xxx
x
TeamRepresentative
ActionPlan
The teams then present their action plans to the Leadership Team to get feedback and immediate decisions. “Further Study” decisions must have a specific time frame for closure and usually require some additional data before a decision can be reached.
xxI approve!
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Progress Checkpoints
30 days 60 days 90 days
Teams meet informallyto share information andrequest help in removing
roadblocks
All Work-Outparticipants meet to
share results and CELEBRATE!!
Teams meet with Decision-Makers to report
progress
The time frame for implementation is usually 30-60-90 days
Work-Out: 30/60/90 Check-Points
Consultant/facilitatorprovides Team/Sponsorw/ support as needed.
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Work-Out at LCU
The “Pilot” Phase
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Pilot #1: Lost/Stolen Debit Card Issue:
– Goal: “Deliver ‘Best’ Customer Service”– Ave. 7-9 days to return lost/stolen card (occasional 13-15)
Approach: 2-day Work-Out– X-funct. team: Deposit Ops., IT, Contact Ctr., Retail Branches– “map” “as is” process; ID causes for excessive “cycle time”– problem-solve causes– “map” “to be” process to reduce “cycle time”
Results:– Replacement time reduced to ave. 3-4 days– “Greatly reduced FedEx costs”– Fixes leveraged across other “card-related” processes for bigger
win
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Pilot #2: Home Equity Line/Loan Approval
Issue: – Approval process too slow– Additional goal: increase rate of loans approved
Approach: 2-day Work-Out– X-funct. team: Consumer lending; IT; Contact Ctr.;
Loan Servicing; Branch Mgmt.; Vendor on call– “map” “as is” process; ID causes for excessive “cycle
time”– problem-solve causes– “map” “to be” process to reduce “cycle time”
Results:– Loan/line approval cycle-time improved by >30%– 13% increase in Lines/Loans approved
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“On-TRACK” at LCU: Consultant-Led &TransitionActivity Process TimingPilot #1 Lost/Stolen Debit Card
ReplacementMarch 2006
Pilot #2 Home Equity/Line/Loan May 2006
Training Developed November 2006
Training Delivered January 2007
On-TRACK III(co-led)
Portfolio/Account Initiation/Maintenance
February 2007
On-TRACK IV(shadowed)
Cross-Selling June 2007
On-TRACK V(shadowed)
File-Maintenance Procedures
June 2008
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On-TRACK Representative ResultsConsultant-Led & Transition
Key, internal file-maintenance procedures between Branches & Deposit Ops. better integrated
Steps reqd. by Branch personnel reduced by 56%, freeing up retail capacity to support CEO’s “sales culture” initiative
Reduced front-line file maintenance errors by >50% in key product area
Eased work-loads and reduced “system stress” between Branches and “back-office”
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“On-TRACK” at LCU: Self-Sufficiency
Activity Process Timing
On-TRACK VI Loan Checklist/Cross Sell
Sept/Oct 2009
On-TRACK VII Collection Dept. Processes
May 2010
On-TRACK VIII IRA Processes October 2010
On-TRACK “8.5” Check Reconciliation May 2011
On-TRACK IX Project Mgmt. Process September 2011
On-TRACK X User/Responsibility Codes
March 2012
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On-TRACK Representative ResultsSelf-Sufficiency
Loan application process modified to collect more data to maximize cross-sell opportunities
Collections process cycle-time improvements:– Telepayment: –65%– Hold-harmless: –50%– Address changes: –40%– Set-off process: –100% (automated)– Payment shortages: –100% (automated)
IRA account opening process: –83% IRA reduced error rate: –66% Defined global, X-funct. “project-mgmt.” process
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On-TRACK Representative ResultsSelf-Sufficiency
User/Responsibility Codes Simplification– Reduced from 2 to 1 per employee– Created efficiencies in tracking teller/MSR
activity– Deactivated former employee codes
eliminates member account inaccuracies– Improved accuracy of employee activity
tracking
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Qualitative Results“There were many intangibles that came out of this process improvement work. This process improved teamwork and collaboration across the credit union. . . . It has brought understanding among our people of how changes they make can impact other areas of the credit union and, based on this, how important it is to share information/policy/process changes across functions. In short, it has made us a more aware and better-functioning team as an organization.”
-- Barbara Mahoney, VP HR, Leominster Credit Union, Leominster, MA
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On-TRACK: “A Way of Life” at LCU
Integral part of annual Strategic Plan– Commitment to 2 On-TRACK’s yearly
L’ship recognizes sustainability as critical to success
Employees “waiting in line” to participateHas become a part of our day-to-day –
“the way we do things around here”
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Critical Success Factors Senior management commitment & active
involvement, continuity– Executive Sponsor: CEO– Process Champion: Sr. VP HR– “Process” vs. “Event” Mindset
Resources – “calendar time,” $ investment, people
Clear “missions” and “boundaries” Key players – not just most available Offsite sessions Follow-through during Implementation Phase Publicized, celebrated “wins”
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Change Management Model Making the Case for Change
– Creating:• a Shared Need• a Sense of Urgency• Dissatisfaction with the Status Quo
Shaping and Sharing the Vision– Describing the Desired Future State– Building a Guiding Coalition
Mobilizing Commitment– Empowering Broad-based Action– Generating Short-term Wins
Making Change Last– Reinforcing/Celebrating Success– Anchoring Change in the Organization
UNFREEZE
TRANSITION
REFREEZE adapted from Kotter, Tichy, Lewin.
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Thanks!
Q&A, Discussion??
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Your PresentersBarbara Mahoney, Senior VP, HR
– Leominster Credit Union– 978 466 7228– [email protected]
Ray Gagnon, Principal– Gagnon Associates– 978 635 9836– [email protected]