WORKING SMARTER, NOT HARDERLean Services for Canada’s Credit Unions:

A Pilot Project Profile

Faced with compressed margins, increasing regulatory constraints

and rising member expectations, Credit Union’s are under tremendous

pressure to realize efficiencies while maintaining the superior level

of service their members have come to expect. The Lean tools help

organizations address these challenges by providing a systematic

approach to identifying and implementing process efficiencies.

Lean brings a fresh perspective to addressing issues that have long

affected credit unions. It is a system which places focus on tasks that

create value for members and takes aim at tasks that do not create

value, also known as waste. By eliminating these wasteful activities,

credit unions can achieve dramatic improvements in productivity,

quality and lead time.

The Foundations of LeanBecome member obsessed. The Lean principles begin with members and move backward from there. Having a clear understanding of what members value provides focus and identifies exactly what needs to be delivered flawlessly, every time.

Simplify, simplify, simplify. Identify activities that use resources unnecessarily and target them for elimination. Examples include:

• Incomplete paperwork• Excessive waiting or delays between processing steps• Unnecessary tasks, such as creating reports that are not read

Become an employee champion. The people who know which activities waste time, effort and energy in your credit union are people carrying out these tasks every day. Tap into their experience and knowledge and you will create effective solutions with staying power.

Lean Put to WorkUnderstanding the needs and challenges faced by credit unions, MNP worked closely with three Canadian credit unions – Conexus, Innovation and Cornerstone - during a 3-month pilot project to learn and apply the Lean tools.

For credit union participants, the goals were simple:

• Teach the Lean concepts and show how they resonate within the credit union space

• Identify opportunities for improvement within credit union operations• Obtain hands-on experience designing and implementing a rapid

improvement event• Measure the resulting improvements

MNP’s approach to process improvement is highly collaborative and focuses on employee engagement and knowledge transfer. By directly involving individuals who do the work, we more accurately capture where opportunities are, and ensure the solutions are effective and sustainable.

MNP’s Lean Pilot Process

“By learning and applying Lean in a group environment, staff members from across credit unions

learn more as they share experiences, challenges and successes.”

— MNP’s Christy Nikel, Process Improvement Manager and session facilitator

Program Plan Current State Future StateRapid

Improvement Events

Results

Program PlanTo set the stage for success, clarify the approach and determine deliverables, members of the designated executive teams of each credit union participated in a planning session. This session provided an introduction to the Lean concepts, providing real-life examples of how they can be applied within the credit union environment.

Once the Lean tools were reviewed, the phases and deliverables of the program were discussed. Each credit union selected a process to analyze that would have a high expected benefit to their organization.

Once processes were identified, team members were selected to ensure representation from all areas these processes impacted.

With processes identified and teams in place, it was time to identify where wasteful activities were occurring in each process flow through Value Stream Mapping.

VALUE STREAM MAPPING: FINDING WHERE WASTE IS HIDING

A Value Stream Map visually captures all activities required to take a service from request to delivery. This method crosses departmental boundaries, breaks down silos and creates a unified focus on member needs. Rather than making point improvements which may have negative consequences up or down stream, this holistic approach ensures that the entire process is optimized, from one end to the other.

PARTICIPANT FEEDBACK: PROGRAM PLAN

“I am really looking forward to the re-allocation of efficiency savings to fulfill our vision.”

“I am most looking forward to the team work atmosphere and cross-functionality of the group.”

Conexus Cornerstone Innovation

Syndication Process Consumer Loan Applications New Member On-Boarding

Current StateTo create the Current State Value Stream Maps, a group workshop was held involving the team members selected during the program planning session from all three credit unions. The session opened with a review of the Lean tools and evolved into a hands-on application of the tools.

The first step was to define “value” from the customer’s perspective. The process team for each credit union identified who the customers were and what they wanted or valued from the process. This provided focus on what activities needed to be delivered the right way every time. Now teams could pinpoint where these valued activities occurred in each process and better see where wasteful activities may be pulling valuable resources.

To capture the current state, each credit union identified — in sequence — all of the activities being completed to bring their selected process from beginning to end. As they proceeded from step to step, team members identified wastes that were occurring as well. Each credit union had an internally designated facilitator to lead their group. These facilitators were tasked with keeping the team on topic and ensuring an accurate depiction of the process flows and issues was captured. MNP provided support and coaching to all three groups throughout this process.

While current state value stream maps are very effective in identifying wasteful activities, the real value comes from finding ways to improve. Creating the Future State Value Stream Maps identifies initiatives that will reduce the waste and result in higher quality, improved productivity and shorter lead time.

PARTICIPANT FEEDBACK: CURRENT STATE

“I really liked the concept of leaning down our processes. It really made me think about what I was

doing today and how much of my time is spent doing things that really are wasted moments.”

Future StateThe following week, the teams came back together to create Future State Value Stream Maps. By looking at their process map, each team asked: What could we do to eliminate these issues? Improvements were identified and placed on the maps above the step they pertained to. Some examples of improvements include “reduce delays,” “eliminate errors” or “simplify document.” Each team captured improvements across the entire process stream, providing a holistic view of where the opportunities existed.

The improvements were then prioritized according to ease of implementation and expected benefit. A simple yet effective matrix format was used: the horizontal axis represented expected benefits and the vertical axis represented ease of implementation. Each improvement was placed in the appropriate spot on the matrix and the result was a clear path for moving forward.

Improvements located in the upper right-hand quadrant of the prioritization matrix represent the low hanging fruit— improvements that have a very high expected benefit and high ease of implementation. These are, of course, fantastic projects to begin with. They can be designed and put into place quickly to gain momentum, and when employees see the results freeing up their time, it lessens anxiety and generates more support for change.

The next step was for each credit union to select one improvement from their prioritization matrix that they wanted to implement with support from MNP.

EXPECTED BENEFITS

EASE

OF

IMPL

EMEN

TATI

ON

PARTICIPANT FEEDBACK: FUTURE STATE

“The part of the session I liked the most was applying the process to something relevant to our

credit union.”

Rapid Improvement EventsThe act of designing a specific improvement, implementing the change and measuring results is called a rapid improvement event. For this phase of the pilot, Christy Nikel, Process Improvement Manager and a program facilitator, worked directly with each of the credit unions to learn and apply the Plan, Do, Check, Act system:

Each credit union participated in workshops to conduct a root cause analysis, design the chosen improvement, develop an implementation plan and create a change management plan. Working with Christy as needed, each credit union was then ready to implement their selected improvement.

Conduct root cause alanlysis

Brainstorm possible solutions

Select best solution

Design best solution

Gather baseline data

Develop implementation plan

Create change management plan

Implement and obtain feedback

Gater “after” data

Analyze results

Make adjustments,

or

Incorporate changes into standard work

PLA

N

DO

CH

ECK

AC

T

ResultsConexus Credit Union: Syndication Process

After considering all of the improvements along their syndication value stream, Conexus chose to focus first on the Agriculture & Commercial annual review process.

Inconsistent process steps and information stored in numerous locations made parts of the annual review

activity time consuming and not efficient. Once the team identified the specific changes required, they discovered a need for a technology solution that would require deeper analysis. As a result, the implementation of this initiative is still underway.

Cornerstone Credit Union: Consumer Loan Application Process

Upon completion of their value stream maps, Cornerstone knew the first improvement they wanted to focus on was the loan route sheet.

Given the length of the document and time it took to complete, the sheet was often received from the lenders with incomplete information provided. Frustrations mounted within both the lending support team and the lending team when missing information needed to be tracked down. Team members from both of these groups were brought together to discuss the challenges surrounding the document and redesign it to improve ease of use. With everyone in the same room, each issue was able to be addressed and discussed.

The newly designed loan route sheet takes 75% less time to complete and resulted in a 50% reduction of omitted information. They have also noticed a vast improvement in the level of communication and collaboration between lenders and the lending support group. As word spread of their success, other departments in the organization are now asking for a similar redesign of their documents, sparking a culture of continuous improvement.

QUICK RESULTS, EASY WINS

Another exciting outcome of this process was that the Cornerstone team took the initiative to take on additional improvements from their Future State Value Stream Map. By identifying and implementing improvements that didn’t require significant discussion or approvals, they were able to obtain quick wins and feel empowered to make change.

Innovation Credit Union: New Member On-Boarding Process

When Innovation determined that travel time was impacting the new member process they agreed this was where the first improvement had to be made. When they worked with MNP on-site they determined that each new member waited in line an average of 12 minutes to get an access card and select a PIN.

By ensuring that each staff member office used for new member on-boarding was equipped with a PIN machine and ample access cards, they eliminated the need for members to leave the office and wait in a line. Since in the past employees had waited alongside the members, the new system was also an effective way to free up staff time and give them the ability to focus on member needs.

Involving team members in every step of this initiative proved to have its own positive rewards; they expressed real enthusiasm for the change and the resulting momentum made successful implementation of the new system an easy transition.

Going ForwardAfter two of the three credit unions had implemented their improvements, MNP brought the designated executive group back together to share results. Christy demonstrated how Lean can assist with achieving their strategic goals using the balanced score card measurement tool that is already common in the credit union system. By looking at what had been accomplished and linking it back to the balanced score card, participants saw the broader picture of how Lean will impact their organization and help fulfill their strategic goals long term.

By gaining hands-on experience applying the Lean tools, everyone obtained a clear understanding of how to move forward and continue to nurture a culture of continuous improvement.

Executives from all three credit unions expressed an appreciation for the common-sense approach that Lean provides, and were interested in maintaining momentum and implementing further improvements. Participants also expressed an appreciation for the mentoring and coaching they received throughout, and shared that they are continuing to have underlying fears about the difficulty of achieving these results without hands-on support. The overall goal of the Lean pilot was to help each organization transition to a sustainable model and bring the Lean program in-house to form part of their culture and skill set. The participating credit unions recognized the employee engagement success they’d had and said they were seeking to replicate this process as soon as possible in other areas of their organization to capitalize on the momentum.

Participants provided positive and informative feedback to MNP on the process, which will be used to further enhance MNP’s customized Lean process for credit unions. Continuous improvement of MNP’s Lean process will further increase the value obtained by participants of future group sessions and one-on-one engagements.

MNP is continuing to support the three participating credit unions to develop internal skills and will provide ongoing coaching and change management support. Our MNP team is dedicated to supporting Canada’s credit unions through this and every journey of continuous improvement.

ABOUT MNP CREDIT UNION SERVICES

MNP’s Credit Union specialists aim to strengthen credit union leadership, knowledge and financial position, significantly enriching the communities in which we both live and work. MNP’s footprint of more than 70 offices across the country allows our team of more than 3,000 to effectively serve credit unions and their members. We have extensive experience providing accounting and business advisory services to more than 130 credit unions across Canada. Recognizing this as a time of opportunity for credit unions, we have built a dedicated and growing Credit Union team that delivers advice and services specifically designed to help credit unions achieve their goals. Our Credit Union specialists help credit unions through growth and sustainability challenges, management of regulatory and compliance burdens, all while ensuring protection of members’ assets. Our team has helped credit unions build strong board governance, leverage technology for competitive advantage and maximize members’ value while eliminating waste. We’re all about providing more for members and looking for ways to support credit unions in this pursuit.

To find out more about MNP’s Lean services tailored to credit unions or how MNP can assist your credit union, contact one of our leaders or a local Credit Union specialist at www.MNP.ca/creditunions

Praxity AISBL is a global alliance of independent firms. Organised as an international not-for-profit entity under Belgium law, Praxity has its executive office in Epsom. Praxity – Global Alliance Limited is a not-for-profit company registered in England and Wales, limited by guarantee, and has its registered office in England. As an Alliance, Praxity does not practice the profession of public accountancy or provide audit, tax, consulting or other professional services of any type to third parties. The Alliance does not constitute a joint venture, partnership or network between participating firms. Because the Alliance firms are independent, Praxity does not guarantee the services or the quality of services provided by participating firms.

Visit us at MNP.ca/creditunions

Annette Kuckartz, CA National Credit Union Leader T: 1.877.500.0778 E: annette.kuckartz@mnp.ca

Doug Macdonald, MBA, PMP Regional Financial Services Lead, Ontario Consulting T: 1.877.251.2922 E: doug.macdonald@mnp.ca

Christy Nikel Process Improvement Manager T: 604.637.1589 E: christy.nikel@mnp.ca