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One Financial Institution’s Evolution – A Success Story

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Client Objectives:

  • Engage our people to rally around the strategy and build a bridge to successful implementation
  • Create a foundation of the right people in the right seats to take us into the future, while delivering outstanding and efficient experiences

Things were going well, yet leadership was certain that the institution was capable of more.  Considering how hard everyone was working, there wasn’t as much forward progress as expected, and it wasn’t clear how to fix it.  They were looking for a partner with extensive industry experience to help provide insights and help the leadership prioritize so the organization could meet its full potential at their desired speed.

The Approach:  Continuous Business Model Optimization

Using our multi-faceted Continuous Business Model Optimization approach to help them reach their objective, we started by asking deep questions to fully understand the situation and identify any gaps.

One of the many reasons for their success on this transition is that the organization really grabs onto productive change and is great at supporting new approaches. Together, we created processes and practices specifically for their organization, all of which were customized to fit their environment, structure, and culture.

Strategic Planning:  Clarity and Alignment

One of the first steps was Strategic Planning to help the Board and Management get clarity and alignment around the strategic direction for the institution.  Despite the pandemic, we were able to execute successful virtual sessions, working with Management first as they re-examined their business model and worked as a cohesive team to create longer-term strategic priorities and shorter-term action steps.

When the Board was brought into the next session, they considered the extremely uncertain environment and decided that they would adopt most of Management’s ideas and not “hunker down” or shy away from serving their lower-credit customers.  They did increase their focus on, and frequency of, monitoring measures of success to ensure that the rapidly changing environment would not take them by surprise.

Strategy as the Decision Filter

The strategy was used as a driver and a decision filter for subsequent solutions as they were put into place.  This is incredibly important—the strategy truly served as the north star for all other activities.

A key decision filter was the alignment of strategy and desired financial performance. Understanding a range of outcomes for where the strategy is leading from a longer-term financial perspective (Strategic Financial Planning) helps give all stakeholders —including the Board —perspective and a foundation for informed decisions.  The client had a good handle on this and was able to provide useful scenarios throughout the planning process.  This continues on, as the Board and Leadership engage in Strategic Planning annually to ensure the direction is strong and make any adjustments as necessary.

Uniting the Organization Around the Strategy

Leadership was looking for a way to get everyone to rally around the strategy and row in the same direction in order to move the strategy forward at their desired pace.  This is often a head-scratcher for organizations.  Like many others, they had many of the pieces in place, but it wasn’t always working as well as they thought it should, and they were facing a certain level of burnout, saying yes to everything.

Strategic Implementation:  Turning the Plan into Action

Ensuring that the strategic plan becomes a reality, which we call Strategic Implementation, was a major focus.

While they had a Project Management Office (PMO) and individual projects were being tracked and managed well, some important elements were missing.  We introduced specific practices and processes to keep the organization focused on the most important strategic priorities throughout the year, especially as the inevitable adjustments and course corrections occurred.

We started by helping them establish a Project Governance Committee (PGC) that included senior executives and the PMO to carry out those duties.  We also helped them establish practices for living up to their long-term commitment to effectively track and report their measures of success.

Effective Strategic Implementation involves multiple areas, which can be roughly broken down into the following four essentials.  We used this model to help frame the organization’s unique needs:

Process Improvement:  Prioritizing Efficiency

The need for Process Improvement was identified during strategic planning. Consumer lending efficiency and improved account opening experiences were priorities.  Initially, they worked on making consumer lending more efficient for the slam-dunk applications so there would be more time to handle the large volume of more challenging, lower-credit applications.  In subsequent phases, the process for the more challenging applications was revamped, along with the account opening process, creating better experiences for all customers, as well as employees.

We mapped the processes as they existed at the time, ensuring that people who performed the processes—managers, compliance, system experts, and executive sponsors—were part of the process improvement engagement.  Collaboration with the right people is foundational to viewing the process from multiple important perspectives, including the customer experience, employee experience, efficiency, and risk perspectives.  Additionally, linking Process Improvement to Project Governance helped to oversee these initiatives, ensuring alignment with resource management and other projects within the institution were being properly prioritized.

Part of our role is to challenge the participants to recognize non-value-add steps and friction.  The rough spots in the processes were eye-opening as the hoops they’d been asking their customers to jump through came to light, such as asking high-credit customers for references.  As friction points were identified, the team collaboratively came up with ways to improve, ultimately saving staff time and delivering quicker decisions, resulting in more loans on the books.  The team found their ability to substantially improve the processes to be empowering and it began to shift the thinking away from “that’s the way we’ve always done it.”

Once they experienced Process Improvement, they realized that cultivating Process Improvement capabilities internally was the clearest route to improving many more processes on an ongoing basis.  They sent some of their people to c. myers’ Process Improvement Education to learn our methodology, which has been designed for—and tested in—the real world of financial institutions.  Beyond methodology, we also focused on using strategy as a guide, facilitating process improvements, measuring successes, the role of business intelligence, and effective execution.

Continuing down this path ultimately leads to a Culture of Continuous Process Improvement, which builds Process Improvement into the DNA of the organization by tracking and prioritizing ideas for improvements and committing resources toward Process Improvement every year.

Strategic People Planning:  Building the Future Leadership

The CEO transition highlighted the need for Strategic People Planning.  The incoming CEO wanted to reimagine a forward-looking leadership structure.

We facilitated decisions related to how the organization needs to be structured for the future and the competencies that will be needed for key positions.  The thought process is geared toward where the industry is headed and how the strategic importance for areas such as Business Intelligence, Marketing, Human Resources, Customer Experience, and Payments will continue to change over time.

The new CEO made structural changes to the C-Suite and the next level over the first few months to better set the organization up for success.  The changes were significant, so we helped establish clear working agreements and met with them frequently to check in as the team jelled over the next year and began hitting their stride.

Leadership Development and Continued Growth

To ensure the new structure would bring the anticipated benefits, the people slated to fill the roles needed to be ready.  They needed to strengthen the competencies that were identified for their new positions, and they needed to function well in their new teams.

The CEO participated in CEO Readiness and especially appreciated having dedicated time to think about the organization’s strategy, needs, culture, and how the first 90-180 days would ideally play out.  It can be a lonely transition to become a CEO.  Having a partner to ask questions of and bounce ideas off was valuable during that first year.

Other key people were entered into our Strategic Leadership Development programs.  Some development was customized for individuals to build their desired leadership competencies, while other sessions were designed to help teams work better together. They started with Senior Leadership and have continued working through the organization.

It’s important to note that some of the successes represent culture change.  It takes sustained effort to shift how people think and act. Even if you’ve developed perfect processes and practices, the necessary changes in mindset will not happen overnight.

The Ongoing Evolution

The evolution at this institution continues as more individual and team leadership development is underway along with ALM Education.  As one of their competitive advantages, they are working on ways to support people during the onboarding process, incorporating Agile Methodology into the management of some of their projects, and working to ingrain continuous process improvement into the culture as they focus on sustainability.

The organization reports, “Enterprise project timelines, on average, have reduced by 6 months since working with c. myers to launch our Project Governance Committee, including resource tracking, process improvement, and an agile approach.”

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What Comes Before AI? PI.

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6 minute read – In light of the many conversations we are having with our clients about artificial intelligence, we thought it would be helpful to repost this blog as a reminder to explore the power of process improvement, before artificial intelligence.

When it comes to newer technologies in the financial services industry, the usage of artificial intelligence (AI) is front and center, but it comes with its own set of challenges including not always achieving promised performance levels and unanticipated pitfalls.  But the challenges don’t mean that the opportunities aren’t worth pursuing.  Institutions are seeking to learn faster as they take advantage of new AI capabilities and they’re finding that applying process improvement (PI) principles before implementation is key to gaining the full advantages of AI without creating unexpected issues.

AI is already commonly used in lending decisions, fraud prevention, and customer service, and as the field advances, new AI applications seem to appear daily.  While the following questions apply to AI implementations, many of them are also relevant for less-complex solutions such as robotic process automation (RPA) that simply automates manual processes.

6 PI questions to ask before implementing AI:

1.  What is the clear objective of this AI implementation?

This question isn’t limited to PI, of course.  It should be answered for almost any strategic initiative, project, or endeavor the institution undertakes.  It is especially important that the objective is crystal clear with AI implementations since there is still so much to be learned.  As you prepare to articulate the objective, it helps to ask, what problem are we trying to solve or opportunity to take advantage of?  How will this support our strategy?  What will be the tangible outcomes?  What benefits will be realized?  How will we measure success?  Starting with a clear objective and measurable success outcomes that align with the strategy is the first and most important step and is critical to hitting the mark.

2.  Are we paving the cow path?

A common pitfall is what is referred to as “paving the cow path” or automating what we’re currently doing without considering whether that’s still the best path.  When pieces of existing processes are automated or enhanced with AI, a question that sometimes remains unasked is, do we really need this step at all?  PI is used to reveal steps that are no longer necessary and highlights business decisions for reconsideration.  For example, when automating report generation, find out if anyone is still using the reports.  Or when automating the payoff of multiple customer credit accounts for a debt consolidation loan, a business decision might be made to instruct the customer to pay them off, eliminating the need for automation.

It’s tempting to think that there’s really not much harm in automating an unnecessary step since it will function on its own, but the cost of automation or AI enhancement is not limited to its initial cost.  Just like other technologies, it must be maintained with updates and any changes made to the data stream coming in or out may necessitate changes in the interface.  This creates inefficiency if the automation or AI wasn’t strictly necessary in the first place.

3.  How would we approach this enhancement or problem if AI didn’t exist?

In PI, it’s important to consider various ways to achieve the objective, so this question is extremely helpful with AI because so many new solutions are being created.  The newness and novelty make it easy for the thought process to be dominated by the capabilities of the solution rather than the problem to be solved or enhancement to be offered.  Take some time to think through other ways to achieve the benefits.  Some have identified less complicated, less expensive solutions by asking this question.

4.  What impacts might this implementation have that we aren’t thinking about?

One of the principles of PI is to seek out unintended negative effects on the customer or employee experience such as, system efficiency, time spent, or costs.  For example, an AI implementation that provides personalized customer experiences could create friction in the account opening or lending processes as they are modified to gather additional data.  Or perhaps the system slows down due to the additional demands.  PI is extremely helpful in uncovering this type of conflict, which can then be weighed carefully against the benefits or adjusted to minimize added friction.

5.  Are our sources of data and data governance policies ready for AI?

The institution’s processes for gathering, protecting, and maintaining data need to be stronger than ever.  Sophisticated AI solutions are built to learn from data without being explicitly programmed and often require large volumes of complete and accurate data to learn from.  This could be internal or external data and the potential exposures to privacy, transparency, and bias issues are magnified with AI.  In addition, regulations are still evolving for how to protect against these and other risks.

Just scratching the surface on data governance, assuming you are using a third party for the AI solution, get clear on how the third party uses data (internal and external) and whether they have adequate guardrails in place.  For usage of internal data, consider whether there is enough for the solution to learn from without creating biases or incorrect answers.  Similar to business intelligence initiatives, there is often work to be done on capturing the right data accurately and consistently as well as clean-up of existing data.

6.  Is our vendor management process up to the AI challenge?

The complexities of working with AI vendors may make this the right time to do PI on the vendor management process.  Strong vendor management can not only track how the institution is using AI, but can also help ensure that your governance policies are applied and tracked consistently.

AI is an exciting, rapidly-developing, area that holds much promise for the financial services industry.  Since it’s relatively new, there is much to learn.  Using these process improvement questions and examining the processes that AI is a part of, as well as other processes it affects, could save some headaches and put you on the road to better results for the whole organization.

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c. myers live – The Power of Real-Time Forecasting for CFOs & C-Suite Teams

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As the world continues to change, with a pace that is accelerating day by day, it is more important than ever for CFOs to be aligned with their C-Suite on the financial future of the organization.  In this episode of c. myers live, we dive into how to effectively use a forecasting tool in real-time to help CFOs and C-suite leaders gain clarity on actions their institutions might consider taking, while continuing to have the conversations needed to move the organization forward.  

See below for the survey results referenced in this episode:

 

 

 

 

 

 

 

About the Hosts:

Sally Myers

sally myers headshotSally is a founder of c. myers corporation and an owner. Driven by a deep commitment to helping financial industry leaders and regulators for more than two decades, her guidance has shaped c. myers’ focus on helping clients create opportunities and approach problem solving from a scalable perspective. She has also been a strategic force behind the development of c. myers’ financial models.

Learn more about Sally

Michelle Bliffen

Michelle brings over 30 years of experience in human resources, higher education, and financial institutions to the C. Myers team.  Michelle combines strategic insight with a deep understanding of organizational dynamics to drive meaningful change and operational excellence.  She draws on her natural curiosity to facilitate discussions, fostering collaborative environments that encourage reflection and growth.

Learn more about Michelle

Other ways to listen to c. myers live:

listen on apple podcastslisten on spotify

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CFOs Harness Real-Time Forecasting to Drive Long-Term Value

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4 minute read – CFOs have shared with us that their leadership teams are increasingly eager to identify which organizational initiatives truly move the needle, especially as they navigate uncertain times together. 

Recognizing this growing interest, we’ve been working alongside CFOs to develop strategies that keep their teams focused on high-impact areas without overwhelming them with excessive details.  

Below are just a few examples of the collaborative approach we are helping CFOs take with their C-Suite as the importance of multiple-path, multiple-year forecasting increases. 

Through our collaborations, we’ve found that fostering open conversation and engagement is an effective first step. 

Setting the Stage for Meaningful Dialogue 

As CFOs embark on this journey, we often suggest reminding the C-Suite of a few key points: 

  • Every C-Suite member is fundamentally in the people business, whether creating products, engaging customers, or battling competition. 
  • Many executives are facing an unprecedented combination of external forces, from economic volatility to AI advancements. 
  • The future holds multiple potential scenarios, making it crucial to focus on what truly matters. 

Leveraging Collective Insights 

To spark productive discussions, we’ve helped CFOs implement simple surveys as a foundation for conversation.  In a recent project involving over 100 financial institutions, we gathered diverse perspectives on expected growth rates for the next three years.  The range of responses provided a rich starting point for strategic dialogue.  

Transforming Insights into Action 

Using our interactive forecasting model, we’ve assisted CFOs in translating these perspectives into potential financial outcomes.  By running multiple real-time scenarios, starting with average projections of the C-Suite as well as exploring the various ranges, we help teams identify critical growth areas for both immediate and long-term focus. 

This approach, which one CFO described as “a fast scientific experiment,” enables leadership teams to unite around a proactive, value-driven strategy rather than merely reacting to daily pressures, as they unfold. 

Anticipating and Preparing for Challenges 

A significant benefit of this forecasting approach is its ability to visualize potential stresses before they materialize.  We’ve guided teams through thinking about mitigating options in advance, helping them prepare for various risk scenarios. 

The Power of ‘Rehearsing Tomorrow, Today’ 

Many CFOs we’ve worked with have found that combining real-time, multiple scenario forecasting with collaborative C-Suite engagement creates a powerful approach to developing and prioritizing opportunities and risk mitigation options.  They often refer to this process as “rehearsing tomorrow, today” – a way to proactively shape their organization’s future. 

In conclusion, while every organization’s situation is unique, we’ve found that this collaborative approach to real-time forecasting and strategic discussions can be a game-changer to thrive in today’s complex financial landscape.  

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7 Practices for Building Successful Execution in Your Institution

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6 minute read – Turning visionary strategies into tangible results requires not just planning, but the disciplined execution of your most critical projects.

In our work with financial institutions of all sizes and unique business models, we’ve identified seven practices that lead to successful execution, as well as opportunities to prevent potential missteps and ensure success.  These seven practices are ingrained in institutions that have mastered strategic implementation to the point where it becomes second nature, woven into the very fabric of their organizational culture.

1. The foundation of successful execution lies squarely within the strategic planning process.  It’s imperative that your strategic framework is meticulously designed to forge a clear connection between your strategic initiatives and overarching goals, aligning them seamlessly with budgetary considerations, desired financial outcomes, and available resources, beyond just humans.  This integration not only ensures that your initiatives are financially viable, but also empowers your organization to harness its resources effectively, driving impactful results and enabling a cohesive path toward achieving your strategic vision.

 

2. Gaining support and buy-in from senior leadership – even the best strategic process is ineffective without the support and commitment of senior leadership. It is essential for top executives to actively engage with and follow the strategic process, setting an example for the rest of the organization.  When leadership visibly demonstrates their commitment, it encourages others to do the same, fostering better coordination across the institution.  Although senior leadership typically helps determine the institution’s strategic direction, strategy often breaks down as it is communicated throughout the organization, making it crucial to clearly and regularly articulate strategic objectives and their rationale, so that daily decisions and tasks are aligned with the institution’s strategy.  This alignment ensures that strategic decisions made throughout the year are consistent and well-integrated.

 

3. When considering additional projects that fall outside the strategic plan, it’s essential to first assess where your resources are currently allocated.  This understanding is crucial for making informed decisions about whether to proceed with new projects and determining the appropriate timing for their execution.  Senior leadership must use the strategic plan as a decision-making filter to evaluate the impact of any new initiatives, particularly since they can strain already limited resources.

 

4. If you’re not regularly checking in – minimally on a monthly basis – on the progress of your strategic projects, you risk missing key opportunities to clear roadblocks that could impede your strategic goals.  Regular check-ins ensure not only that your objectives are being met, but also that they stay aligned with the overall strategy.  For example, these meetings allow for essential discussions about priority projects, enable timely adjustments as new information arises or timelines shift, and address challenges with vendors.  Without these regular meetings, you lose the chance to explore the best solutions for overcoming obstacles that could affect your most critical strategic initiatives.

 

5. While it’s crucial to avoid constant adjustments to your strategic plan, there are times when changes are necessary.  Flexibility doesn’t mean abandoning the plan; it involves finding new ways to achieve goals when circumstances shift.  Whether driven by market changes, internal resources, or external pressures, leaders must pivot their approaches while remaining focused on ultimate objectives.  This may involve adapting tactics or adjusting timelines, all while preserving the strategic vision and ensuring continued progress in a dynamic landscape.

 

6. Often throughout the year, new ideas surface across different areas of the organization that may require a project approach that shifts the priority of resources. When these ideas and projects surface, it is essential to use the strategic plan as a decision filter.   Adding mid-year projects that are simply “shiny objects” can cause a whiplash effect, lowering team morale.  Similarly, underground projects, which often bypass the agreed-upon process, can grow in scope and cause unnecessary strain on resources.  Both types of projects – whether shiny or stealthy – need to be carefully vetted to ensure they align with your strategic goals.  As part of this discussion, you must also consider which other projects will be postponed or stopped, recognizing that your resources are finite and must be used effectively to move the institution forward strategically.

 

7. During project planning, teams often overlook the project demands across critical departments like marketing, training, compliance/risk, or finance, leading to last-minute scrambling to ensure the needed resources are there.  To avoid this, it’s essential to vet all department needs thoroughly in the planning phase, ensuring that necessary support is identified early.  Similarly, departments may assume they can complete a project independently until they realize they require additional resources such as hardware, software, staff training, external vendors, or customer messaging.  Given that most projects are cross-departmental in nature, it’s important to approach the planning phase with the expectation that you will need resources from other departments, and plan accordingly to keep projects on track and within the desired timeline.

Strong strategic implementation is what ultimately brings a well-crafted plan to life.  The seven practices outlined above are key to ensuring that your institution not only executes its strategic goals effectively but also embeds these practices into the organization’s fabric.  If your institution needs a strategic implementation kickstart, we can begin with an assessment to get you moving in the right direction towards becoming great at execution of your most important strategic projects and building it into the DNA of your institution.