improving profitability no matter what rates do...moss adams 17th annual community banking...
TRANSCRIPT
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Moss Adams17th Annual
Community Banking Conference
Improving Profitability No Matter What Rates Do
– Living Process Improvement
Presented by Rob Johnson, EVP/Principal
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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
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Source: This Latest Camera Sales Chart Shows the Compact Camera Near Death, PetaPixel, 03/03/17
LINEAR VS. EXPONENTIAL CHANGE
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WHY IMPROVE A PROCESS? Speed and Convenience Better customer experience Generate more revenue Better employee quality of life Fewer errors Reduce expenses
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FUNDING MORE OF THE APPROVED LOANS
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FUNDING MORE OF THE APPROVED LOANS
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FUNDING MORE OF THE APPROVED LOANS
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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
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HIRING A PERSON TO HANDLEPROCESS IMPROVEMENT
WILL NOT ENSURE SUCCESS
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SENIOR MANAGEMENTEAT, BREATHE, AND LIVE
CONTINUOUS PROCESSIMPROVEMENT
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ALL IN IT TOGETHER
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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
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EVERY PROCESS IMPROVEMENTENDEAVOR HAS CLEAR OBJECTIVES
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EXAMPLES OF OBJECTIVES
We have improved our consumer lending process
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EXAMPLES OF OBJECTIVESNOT CLEAR:We have improved our consumer lending process
CLEARER:We have improved our direct used auto lending process
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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
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BE OPEN TO WHAT YOU DISCOVER
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ALL TEAMS AND LEVELS IN THEORGANIZATION EXPERIENCE IT
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AS-IS MAPPING
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IDEAL MAPPING
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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
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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
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EVERYONE IS IN THE ETERNALPURSUIT OF NON-VALUE-ADD
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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.
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be curious
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why 5
You need to be part of the solution
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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?
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PROJECT MANAGEMENT TO MAKEIMPROVEMENTS A REALITY
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DELIBERATE FOCUS TOMAKE IT STICK
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KNOW YOUR NUMBERS, MONITOR THEM, COMMUNICATE
SUCCESSES AND FAILURES
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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
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MAKE YOUR NUMBERS COME TO LIFE
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APPLICATIONS BY CREDIT TIER
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Nearly all C-tier applications that are approved get funded
PERCENT OF ALL APPLICATIONS
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FUNDING MORE OF THE APPROVED LOANS
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FUNDING MORE OF THE APPROVED LOANS
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FUNDING MORE OF THE APPROVED LOANS
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*Example using A+ credit
TIME TO APPROVAL – BRANCH CHANNELS
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*Example using A+ credit
TIME TO APPROVAL – DIGITAL CHANNELS
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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
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Thank You!We welcome your questions and comments.
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