Dale Johnson knows something about saving money. The former PricewaterhouseCoopers bank practice consultant, now president and CEO of Sun Community FCU, knew very well how much hiring an outside firm to come up with an efficiency plan would cost his $408 million institution.
So instead of paying an outside consultant about $150,000 to create a plan, Johnson created his own. The aptly named "Cost Savings Plan" did just that and the El Centro, Calif.-based credit union reports it saved over $500,000 in just one year.
Johnson's plan has earned Sun Community a Best Practices Award from CU Journal.
Like most credit unions, Sun Community went through the process of reviewing staffing benefits and vendor costs. Johnson's new plan, however, called for managers to propose their own cost savings plan for their departments. "We really wanted to get buy-in from the ground," he added. "The managers own their plans and they are motivated to make them work."
There was one caveat: the plans could not reduce the level of member service. To incentivize the managers, whatever amount approved proposals saved in the first month would be given back to each manager as a bonus.
"The people on the ground know more than the president." Johnson noted. "If the CEO thinks he knows everything, he's wrong"
Sixteen out of the CU's 22 managers have participated since the plan started in September 2015 and so far each has received an average of $3,000 in bonus compensation, according to Johnson. The biggest bonus -- $8,000 -- was awarded to a manager who renegotiated the CU's card services provider contract. The lowest was $1,500.
"Everyone went through every invoice they signed – everybody," he said. "They went through everything. They called vendors up and got a better deal."
And once the managers got going, it became less about the money, according to Johnson and more about "being a part of it." In fact, two managers who earned bonuses (one $5,000 and the other $2,000) refused to accept them because they felt they should have found these savings already. "That response was quite surprising to me," he added.
Sun Community's plans to continue its "Cost Savings Plan" and will try to make it more "interesting" next year.
"It's a process," Johnson noted. "I always tell people that you can't control income, but you can control expenses if you want to. Always keep that on the radar. Never let up trying to become more efficient."
