The Measures FPCU Has Taken To Boost The Bottom Line
By most measures, Nader Moghaddam has had a successful first year at the helm of Financial Partners CU.
The former executive vice president at Kinecta Federal Credit Union took over as president and CEO of Financial Partners Jan. 10, 2005. Through November, the credit union had increased its income (3.5 times the 2004 number), boosted ROA (70 basis points, compared to 19 BP one year prior), lifted net worth (9.4%, up from 8.4% in 2004), and enjoyed a rise in loans and assets while also cutting delinquencies and chargeoffs.
But more important, according to Moghaddam, is the "member side of the equation" and the CU's staff's happiness. Third-party surveys found member satisfaction up from prior years, with 85% of members stating they are "very satisfied" with Financial Partners and 98% falling in the "satisfied" and "very satisfied" categories combined.
"Surveys of our employees show they think we are on the right track, and they cited improved leadership and training," he said. "And, we've impacted pay and benefits for employees. In past years, we may have been penny wise but pound foolish. Perhaps we were a little tight with pay and benefits, thinking we were saving money. But, it is important to have satisfied, proud employees."
So what changed? A commitment to improved training and communication, Moghaddam said. Having had positive experiences at his previous credit union stops with the Cohen Brown sales management system, he implemented a variation of the system at Financial Partners, which he termed APEX, an acronym for Achieving Partner Excellence. It includes video-based training and simulated interactions, with an emphasis on teaching how to identify member needs and proactively make suggestions.
Senior management at Financial Partners CU went through APEX training last April, and the remainder of the organization followed in May. As a follow-up, the credit union installed a system of "success cards" in July for all staffers who had direct member contact, including tellers, sales, the contact center, consumer and mortgage lending, and collections.
Moghaddam said the success cards allow management to use positive reinforcement, and they have built accountability among support staff. One example: the abandonment rate in the phone center has dropped to 4% in the most recent quarter, down from 10% to 14% in the previous year.
"This is my fifth implementation, and we've really knocked the cover off this thing," he said. "The Cohen Brown system has been widely used in the banking world for the past five or six years, but for us, the program has evolved beyond training. We have raised the level of standards and expectations."
Lori Reeves, Financial Partners CU's senior vice president of marketing and public relations, agreed. Reeves has been with the credit union since 1983, and said she has witnessed many changes in those two decades.
"A lot of people talk about these things, but the structure of what we are doing makes a difference. APEX was the key to our improvement in the past year," she said. "Having a common language helped bring understanding. The whole organization went through one core phase of training, plus we had modules specific to each individual's responsibilities."
Added Moghaddam, "We're involved and we care. We are not walking around with a baseball bat looking for folks. Instead, we get people hooked on positive reinforcement."
Each quarter, the top 10% of employees who have a success card get a "day of fun," he explained. Prizes have included trips to Disneyland or Catalina Island.
Moghaddam said management is in the process of determining the President's Club for top performers in 2005. The winners will be taken on a black-tie dinner cruise in February.
The system seems to be working for Financial Partners CU. Reeves said the contact center not only has improved service and reduced the abandonment rate; it has tripled the number of loan applications taken by phone.
"The phone center now is responsible for 45% to 50% of total consumer loan applications monthly," she said.
According to Moghaddam, the CU has an "electricity in the air" that is so palpable, visitors comment on it.
"We made a commitment to repartner with our membership. We cut 15 fees, we paid employees more, we are making more money and we have happier members. The mood we have here is incredible."