What Gets Measured, Gets Done: The following article is one of six that, as part of Credit Union Journal's ongoing series on growth, takes a look at measurement metrics. The other articles can be found in the related links box on the right.
Cincinnati — Before the credit union measures back-office performance, it should first examine organizational design and check for consistent business policies.
According to Arp Trivedi, VP of strategic planning at DEI, performance measurement begins with organizational alignment. "Everything that is member-service oriented should be aligned along a continuum reporting up to one senior level VP or EVP. I have to touch the member, book the member and service the member. All that ought to report to one organization."
Trivedi said any other design can lead to reduced member service and employee performance. "The first pitfall you are going to hit in terms of performance is when those elements are scattered throughout the credit union, since your member service staff are answering to people not solely focused on the member."
Once the design is right, then metrics involves workflow analysis, "kind of understanding the old-school things. Taking out a watch or sitting down with a group and saying how long does it take us to handle a loan application, for example. What are the important timings and potential failings in the process and documenting those."
From that data the credit union should develop performance standards. But those standards depend a great deal on the credit union's business processes, which Trivedi emphasized need to be consistent. For example, if the credit union books loans through the web after normal business hours, it needs to keep that process in place 9 to 5.
Consistency removes many "exceptions," deviations from standard practices, that are hard to measure and crop up to a greater extent when business policies vary.
"For God's sake focus on consistency," urged Trivedi, who admits he sees many CUs "all over the place. Let's get those problems with consistency out of the way and then we can talk about getting the time it takes to give an answer on a loan application down and finding ways to take excess and common sense errors out of the process."
Don't also make the mistake of setting metrics based on peers, because business processes and policies vary too much between credit unions, warned Trivedi, who also cautioned against setting metrics based primarily on the budget.
"Budget is not the only performance factor," Trivedi reminded. "What is it going on in terms of overall growth and member service? A lot of credit unions keep a scorecard when they go through the measurement process, which is important. But more often than not, they are focused on the monetary aspects and don't build in the member satisfaction component, how we are doing with operations improvement, new product development. Ultimately that all rolls up to the financial analyses."
