Moss Adams17th Annual
Community Banking Conference
Improving Profitability No Matter What Rates Do
– Living Process Improvement
Presented by Rob Johnson, EVP/Principal
ABOUT C. MYERSThink to differentiate. Drive better decisions. We have the experience of providing actionable
decision information to over 550 credit unions• 50% of those over $1 billion in assets• 25% of those over $100 million in assets Process Improvement, Project Management,
Strategic Planning, A/LM, Model Validation, Strategic CFO Bootcamp
Facilitate 130+ strategic engagements each year
Source: This Latest Camera Sales Chart Shows the Compact Camera Near Death, PetaPixel, 03/03/17
LINEAR VS. EXPONENTIAL CHANGE
WHY IMPROVE A PROCESS? Speed and Convenience Better customer experience Generate more revenue Better employee quality of life Fewer errors Reduce expenses
FUNDING MORE OF THE APPROVED LOANS
FUNDING MORE OF THE APPROVED LOANS
FUNDING MORE OF THE APPROVED LOANS
MAKING PROCESS IMPROVEMENT A HABIT1. Eat, breathe, and live process improvement 2. Clear objectives3. All teams experience it4. Eternal pursuit of non-value-add 5. Make improvements a reality 6. Make it stick7. Know your numbers
HIRING A PERSON TO HANDLEPROCESS IMPROVEMENT
WILL NOT ENSURE SUCCESS
SENIOR MANAGEMENTEAT, BREATHE, AND LIVE
CONTINUOUS PROCESSIMPROVEMENT
ALL IN IT TOGETHER
EXECUTIVE SPONSOR Assures project success aligns with
business goals Supports the team and removes
obstacles Manages business risk of project failure Acts as a vocal and visible champion
EVERY PROCESS IMPROVEMENTENDEAVOR HAS CLEAR OBJECTIVES
EXAMPLES OF OBJECTIVES
We have improved our consumer lending process
EXAMPLES OF OBJECTIVESNOT CLEAR:We have improved our consumer lending process
CLEARER:We have improved our direct used auto lending process
EXAMPLES OF OBJECTIVESNOT CLEAR:We have improved our consumer lending process
CLEARER:We have improved our direct used auto lending process, so that our funding ratio has increased from 63% to 68% by June 30, 2018
BE OPEN TO WHAT YOU DISCOVER
ALL TEAMS AND LEVELS IN THEORGANIZATION EXPERIENCE IT
AS-IS MAPPING
IDEAL MAPPING
HOW IS THE TEAM SELECTED? People who do the work need to be involved in the
process improvement:• Tell us how it really is• Creative ideas on how to make it better Decision-makers need to:
• Listen with an open mind• As appropriate, make “in-the-moment,”
“low-hanging fruit” decisions• Be committed to implementing agreed-upon
improvements in the process, timely
HOW ARE PARTICIPANTS SELECTED? Lending example: People who do the work need to be involved, such as:
• Loan originator • Underwriter• Loan processor
Compliance
Manager who knows process from start to end
Business owner
EVERYONE IS IN THE ETERNALPURSUIT OF NON-VALUE-ADD
PROCESS IMPROVEMENTNon-Value-Add Or Value-Add?Non-value-add (NVA) activities usually meet one or more of the following criteria: The activity has no customers, internal or external Customers/members are not willing to pay for it The activity is not required for financial, regulatory, or
other business reasons
All other activities are value-add.
be curious
why 5
You need to be part of the solution
WHY TO THE POWER OF 5 Funding of A+ loans is 63% Customers got loans somewhere else – Why? Customers waiting for decision – Why? Lending busy with large number of denials that
need a second look – Why? Want to approve as many loans as possible – Why?
– Why?
PROJECT MANAGEMENT TO MAKEIMPROVEMENTS A REALITY
DELIBERATE FOCUS TOMAKE IT STICK
KNOW YOUR NUMBERS, MONITOR THEM, COMMUNICATE
SUCCESSES AND FAILURES
THE RIGHT COMMUNICATION Legacy processes are not protected Ask challenging/probing questions Demand feedback Talking works best More and more quality updates=higher
chance for success
MAKE YOUR NUMBERS COME TO LIFE
APPLICATIONS BY CREDIT TIER
Nearly all C-tier applications that are approved get funded
PERCENT OF ALL APPLICATIONS
FUNDING MORE OF THE APPROVED LOANS
FUNDING MORE OF THE APPROVED LOANS
FUNDING MORE OF THE APPROVED LOANS
*Example using A+ credit
TIME TO APPROVAL – BRANCH CHANNELS
*Example using A+ credit
TIME TO APPROVAL – DIGITAL CHANNELS
1. Eat, breathe, and live process improvement 2. Clear objectives3. All teams experience it4. Eternal pursuit of non-value-add 5. Make improvements a reality 6. Make it stick7. Know your numbers
MAKING PROCESS IMPROVEMENT A HABIT
Thank You!We welcome your questions and comments.
c. myers corporation800.238.7475cmyers.com
c. myers