management & organizational consulting accelerating change and continuous improvement: presented...
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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
Management & Organizational Consulting
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
Management & Organizational Consulting
Management & Organizational Consulting
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
Knowledge
Ability
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 ScenarioBAU Scenario
Work-Out ScenarioWork-Out Scenario
Accelerating Positive Change
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Work-Out: Implementation Phases
DesignDesign
ConductConduct
ImplementImplement
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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
Team
LeadFacilitator
This is going to be great!!
Sponsor
All teams start the session together with the Sponsor giving the overview of objectives and expectations
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)
DAY ONE DAY TWO DAY THREE
8:00 KICK-OFF 8:00 Start 8:00 StartBus. 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
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
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
Management & Organizational Consulting
Action (What?) Who? By When?
1 Create contents template to identify information to be included in manual
Daryl Robinson
Carl Weeks
June 30 2010
2 Collate and analyze existing regional data for the following functions:
–Manufacturing process–Quality–Testing–Packing & Shipping
Daryl Robinson
Carl 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 Robinson
Carl Weeks
TBA
4 Document procedures and rules into a global manual for each function
Daryl Robinson
Carl 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)
DAY ONE DAY TWO DAY THREE
8:00 KICK-OFF 8:00 Start 8:00 StartBus. 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.
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 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 Timing
Pilot #1 Lost/Stolen Debit Card Replacement
March 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
Management & Organizational Consulting
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”
Management & Organizational Consulting
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
REFREEZEadapted from Kotter, Tichy, Lewin.
Management & Organizational Consulting
Thanks!
Q&A, Discussion??
Management & Organizational Consulting
Your Presenters
Barbara Mahoney, Senior VP, HR– Leominster Credit Union– 978 466 7228– [email protected]
Ray Gagnon, Principal– Gagnon Associates– 978 635 9836– [email protected]