LIVE OAK, Texas-Randolph-Brooks FCU is using the same process improvement strategies to beat competing financials that the Japanese used to gain market share on the Big Three automakers.
The $3.6-billion CU employs "kaizen" events, a fast-moving business activity aimed at continually improving all functions of an organization. "This is how the Japanese carmakers overtook GM," said CEO Randy Smith. "We've used them for a year and saved over a million-dollars in operating costs."
A strict adherence to process improvement, including three full-time employees dedicated to that business discipline, led to using kaizen events at RBFCU. A kaizen event, Smith said, is usually one week in duration, and the team analyzing a business process is comprised of individuals who work outside the department that is under scrutiny.
"You form a team of non-experts in the area you are looking at. Maybe a new teller, someone from marketing, HR, or business development," Smith explained. "You get a team of eight to 10 people, and for a week they concentrate on reviewing a process and make recommendations to improve it."
Smith said one of the reasons kaizen events are so effective is because of their speed, leaving little room for procrastination. But they also work because they rely on non-experts. "Experts think they know it all and you can't tell them anything," Smith added, saying a team with open minds is needed to examine a process.
"That makes all the difference. You want people who are brand new to a process to come in and say, 'I don't understand why we do that. Why do we fill out two pieces of paper?' Well, the standard answer is, 'That's the way it's always been done.' That's the thinking you have to get far away from."
The kaizen team sequesters themselves in a room for a week and uses "yellow sticky notes" to track every step of a process, no matter how small. "Maybe a process takes 100 steps and you don't realize it until you break it down," Smith said. "The team then determines how to make that process 75 steps, or 50, maybe 10. We have had very dramatic improvements. They get rid of all of the parts of the process that don't add any value. Over and over this thing has hit home run after home run."
For example, members were spending too much time on hold when they called the Member Service Center. A kaizen event streamlined the process by consolidating the number of computer screen MSRs work with, creating a skills-based training program, and realigning call-tree prompts. That reduced member hold time delays by 33% and eliminated seven staff members.
While the speed at which the kaizen teams move eliminates dawdling, the fast pace lets everyone in the organization know that if the group taps them on the shoulder, they have to move, since changes are implemented immediately. "That's the rule," Smith said. "Everyone has got to get behind it."
'Heroes of the Credit Union'
The kaizen process requires leadership-SVPs at RBFCU-to brief the credit union on what the team found and the potential savings. If the cost reduction is sufficient enough, Smith said the team will do a 15-minute presentation to the board, get a team photo made, "and become heroes of the credit union."
Smith added that a kaizen event helped the credit union understand that it was unnecessarily imaging more than one-million documents. "We image a lot of documents-over four-million a year," Smith said. "We never would have realized the unnecessary output here if the kaizen team had not shined a bright light on it."
Kaizen events are working out a lot of waste in RBFCU's processes, and Smith said there is a great deal of low-hanging fruit for credit unions to tackle with the events. "You are derelict in your duties to members if you are not using these techniques," he said.
Looking to learn more about 'kaizen' and how you might use it to improve processes at your CU? In addition to considerable online resources, Amazon.com has numerous titles available on both the process itself and how companies have implemented it.