AUSTIN, Texas–Credit unions gathered here as part of a unique get-together were given a foundation in how to create effective changes in credit unions of all sizes—and then make it stick.
Joel Hartzler, senior stewardship and development director with the Filene Research Institute, kicked off the CUTomorrow Conference with a Sunday evening session aimed at preparing attendees to better absorb all the ideas they will hear today and tomorrow and then actually take home the most relevant to their credit unions and effectively implement them.
The meeting runs through Tuesday afternoon and features a dozen-plus credit unions sharing market-proven growth strategies that are some of the best to have been featured in CUToday.info
Hartzler’s comments focused on the Filene Method and the lessons it has learned and developed for creating and implementing ideas that help both the member and the credit union.
“It doesn’t matter if you are a large or a small credit union–ideas are free,” said Hartzler. “Your employees go through a member relationship every day. They know what members go through. They have a lot of ideas stored up that they can bring to the credit union to make changes. A lot of times employees don’t do that because they don’t feel comfortable doing so.”
Hartzler built much of his remarks to CUs around how to make those employees more comfortable; steps attendees were told they could also apply as they work to bring about change.
Quoting to the observation by the research institute’s namesake, Ed Filene, that “Progress is the constant replacing of the best there is with something still better,” Hartzler said another way to think of that is “We are never satisfied with how we are taking care of our members. Basically, it’s about making changes that will affect members’ lives.”
Three Types of Innovation
Hartzler told the CUTomorrow audience that there are three types of innovation:
- Incremental Innovation (lower risk, moderate impact)
- Architectural Innovation (moderate risk, long-term, structural impact)
- Disruptive Innovation (higher risk, potential for significant impact)
Filene recommends a credit union make a 70% investment in incremental, 20% investment in in architectural, and 10% investment in disruptive innovation.
“That way you continue to make changes on a smaller scale, but the revenue you make from those smaller changes allow you to make the bigger changes,” he said. “You also want to start small and get some confidence in how your membership views you, and then you can move on to making the disruptive changes in how your members see you.”
The Roadblocks
Talking about change and implementing change are obviously two different things, and Hartzler shared some thoughts on how get past the talking stage.
“When we talk to credit unions and get feedback on the changes they want to make, there are always going to be roadblocks,” he conceded. “How you get over those roadblocks is what will lead to the success.”
The roadblocks, and the best ways to respond, according to Hartzler, are:
- We’ve always done it this way. “Let someone outside the credit union share a viewpoint. That’s one good way to get over that roadblock.”
- Confirmation bias. “People will have a bias based on what they want the strategy to look like. One way we have found to get over that is to have people from different departments come together as a team in order to get the full picture and not just what they see with their department blinders on.”
- Diving in too quickly. “This is when the first thing you do is go right to that disruptive innovation. If that fails, the whole thing will fail.”
- Aversion to Failure. “Go back to your CUs and encourage thought leadership. Take ideas back from this conference; say ‘This is what I heard, what ideas do you have to back this up?’ It will make people more likely to contribute.”
- Overconfidence. “If there is a bad idea at the credit union, don’t let that discourage people at the credit union from coming up with other ideas.”
The Filene Method
Hartzler walked the participants through the Filene method, a five-step process that involves “Insights, Ideation, Prototyping, Testing and Reporting.”
He urged credit unions to begin with an objective of solving a problem, and stressed that the reporting piece is critical.
“Constantly report what is happening with the change. Is it good or is it bad? The more knowledge employees have, the more involved they become in enacting that change?”
Speaking to what’s known as “Human-Centered Design (HCD),” Hartzler encouraged CUs to really listen to how both members and employees are interacting with certain tasks/solutions.
“Listen for a theme if you sit down with members and non-members. Then create a solution to fix it,” he said. “HCD will help you hear from constituents in new ways, create innovative solutions to meet these needs and deliver solutions with financial sustainability in mind.”
Why? Doing so forces a person to get out of their biases and preconceptions, he said.
Where to Start
Whatever solution a credit union might come up with needs to be desirable (which is the criterion that comes first), feasible and viable. “The change you want to come out of any innovation or idea needs to connect those three,” he said. “Just trying to find something desirable for your members doesn’t mean it’s necessarily a change to make.
“Don’t forget that with any change you need to look at this from what does it look like through the eyes of the member,” stressed Hartzler. “It’s not about how many keystrokes are needed to implement it. That doesn’t matter.”
Other Observations
Some of the other observations made by Hartzler that were shared in more detail with attendees of CUTomorrow included:
- “Remember, sometimes we need to go slow to go fast. Think about making small changes first. Say ‘Maybe we can’t do this idea right now, but we can do these two to work our way up to this new idea.”
- Hartzler said everyday workarounds developed by employees can be a good source of insights and can lead to innovation. “If you have an employee who has a workaround they face daily, but they haven’t talked about it, those are the changes that can make the best ideas for the credit union.”
- “I’d like to see if you can go home and give your employees and branch managers an assignment: ‘Give me 10 insights you see affecting our members.’ See how many actually become ideas to make a change inside the credit unions.”
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Hartzler recommended credit unions put employees through an “Empathy Map” exercise in which employees look at the CU or a process and ask what is the member seeing, saying, doing, feeling, hearing?
“When you start to see how the member is living their life and how they view the credit union, that’s a great way to solve that problem.” - “The other thing to keep in mind is that ease of use matters. I can order a Domino’s pizza on my phone. That’s what members expect.”
- The key questions for success in creating a problem statement is to ask, “Who experiences the problem? Does it represent the end-users’ perspective? Have you avoided value judgments or biases? Does it contain a solution? How passionate is your team about solving it?”
- Diversity helps. “Instead of looking to one team or group that always has a say in what’s going on, get some diversity from others on the changes they want to make.”
- “Make it fun, as people want to participate more. “You can model, do mock ups, role play, create a fake advertisement, etc.”