Speaking of lean banks, last year, First West was our feature company for our newsletter. A copy of this article is below. To ensure you don't miss out on what's on the cutting edge of lean, sign up for our newsletter, released quarterly.
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Recently, Lean Sensei International interviewed Launi Skinner, Chief Executive Officer of First West Credit Union. With $7.1 billion in assets, 1,300 employees and 171,000 members, First West is B.C.’s third largest credit union. As a forward thinking credit union, this financial body is a unique model for their industry, having maintained local names and leadership at each of their operating units following the merger of Valley First and Envision Financial. Traditionally, credit union mergers entail name changes and hierarchical recalibration. However, First West blazed a new trail when it decided to maintain the local names and local leadership to fulfill the vision of developing an organization where each employee would be empowered to be part of the solution every day. It is this very vision that makes Lean a natural fit for First West. First West’s Lean journey, is not only a Lean success story but a hallmark of successful Lean deployment in the service industry.
Lean, a Natural FitSkinner explained how First West first came to embrace what Lean could do for their organization.
First West was first introduced to Lean Sensei International three years ago. First West’s board chair, at the time, had worked previously with Lean Sensei and was a firm believer in how Lean had transformed his own business. As an organization, First West had people who were well versed in Business Process Improvement or in Six Sigma but aside from the board chair, no one in the organization had extensive knowledge of Lean. Following the initial meeting, First West met with other organizations who had partnered with Lean Sensei and learned about the value that Lean had brought to their organizations. It became apparent that Lean was indeed the way to go.
The Role of Leaders with LeanIn consultation with Lean Sensei, the executive team and Skinner put together a three-year plan with the first year addressing education of the board and executive team. As role models of the organization, the executive team participated in Executive Lean training to understand more about Lean, its relevance and how the methodologies could be applied to a financial institution. Every year since then, First West organizes development days to have executives “go to the gemba” and work directly on projects that address issues facing the organization. The executive team is actively involved with Lean, participating in kaizens at regional offices, branches and insurance offices. The CFO and his team have participated in two kaizens and Skinner has been part of two kaizens this year as well.
Overcoming HurdlesSkinner emphasizes that Lean is a commitment. If you believe that the biggest opportunity for your future is to have an organization with a workforce that is empowered, you have to commit and you have to invest. This may require you to determine what you are willing not to do in the short term to build up capacity. You have to see where the short-term need is versus the long-term. For us, we would not be able to do what we are doing today if we had not adopted Lean principles.
When First West began doing Lean, their people were excited and they completed a number of kaizens. However, the organization soon realized that they needed to manage the total pipeline of activity. Coming to this realization was also a trigger to create a vehicle of communication. Currently, the organization has about 75 concurrent kaizens. At any point in time staff are able find information on current projects and their leaders, the people involved and the progress of the project. Communication across the organization is part of engaging employees and recognizing them as an integral part of organizational success.
Lean for ServiceWhen implementing Lean in a service industry, there are three main areas in which service organizations differ from manufacturing organizations.
Connect the dots through the use of semantics that are more meaningful to transactional processes. For example, the term process-time is used rather than cycle-time.
Frequent turnover and larger workforce
The workforce is a dynamic component for service organizations. Retailers, for instance, hire hundreds to thousands of people and inevitably experience higher turnover. First West found that there needed to be levels within Lean. For example, it was more appropriate for some employees to have only basic Lean training (Lean 101) while others needed the more comprehensive Blackbelt training. The depth and breadth of training needs to match the frequency and the way that employees will be leveraging Lean tools in their role.
For service companies, there are many processes around how you deliver service and there is more flexibility within processes. There may be three or four decisions that need to made at once, not only the next one.
First West sustains Lean through continued engagement on the organizational level, the executive level and the individual level. Each employee must identify a Lean goal as part of their annual goal setting. At the leadership level, each member is responsible for taking 20 goals and translating them into three to five meaningful targets. Then, as a team, each person commits to making the Lean goals one of the team targets. This approach exemplifies the depth of First West’s commitment to Lean and their dedication to bringing increasing value to members.
Skinner describes First West as a Lean organization. Going forward, they aspire to be the leader of Lean organizations. They would like to bring their passion for Lean and member service to their suppliers, vendors and other credit unions. It is their goal to transform the entire credit union industry.