The Voice of Canadian Credit Unions
Leadership /  •

Lean In

Credit unions and cooperatives are adapting "lean" principles [first developed by Toyota] as a strategy to better support those who work on the frontlines.

In some ways, it seems odd that a system developed 60 years ago to produce cars more efficiently works today to create well-functioning credit unions focused on member service. But talk to the people using the system and the similarities between the two industries become clearer.

They intersect at values. In fact, values are their foundation.

May credit unions, cooperatives and businesses across the country are using a “lean” approach to revamp their work. Lean was developed by Toyota as part of its then-revolutionary approach to car manufacturing. Instead of Henry Ford’s never-ending production line of vehicles that had workers repeating simple tasks over and over and over, Toyota structured its workforce in small teams that worked together to delay the best way to carry out their tasks.

Their strategy was based on two simple principles: the elimination of any step in a process that did not directly add value to the product and the smoothing of the ow of work necessary to build the product. The goal was to create better value to the end user of a product while eliminating all waste in the process, thereby cutting the manufacturing cost.

In the 1990s when it became clear that Toyota was building the best vehicles in the world and all auto manufacturers were struggling to catch up, attention turned to the Toyota Production System. For most, the focus was on the business processes and how Toyota squeezed out waste, sped up production, yet maintained world-leading quality. “A lot of North American companies tried to follow what Toyota did and failed because they didn’t look at the cultural/people side,” says Lorri Meulendyks, director, Enterprise Process Management at the CUMIS Group, which is part of The Co-operators. “They looked at the tools, not realizing that the secret sauce to why it works at Toyota is the training of the employees. In their culture, it would be disrespectful for a manager to answer or solve a problem for an employee,” Meulendyks says. “It’s more the role of the manager to mentor and teach them how to think, how to get to root cause and how to brainstorm for solutions. That’s very different than the North American way.”

The no.1 lesson of lean is to look at every process and every step from a member/client perspective and ask whether it helps them or if they would pay for it. 

But many failed to implement lean because their focus was on using it as a process improvement tool, not realizing it really is a management method. CUMIS is one of the leading proponents for lean management in the cooperative sector. It has been using it since 2009, training more than 1,400 people so far, and establishing a Best Practice Centre of Excellence that is rolling lean out to all of the Co-operators Group’s 5,000 employees.

“We really promote culture change and training for people leaders and project managers around lean management, that’s what’s different now,” Meulendyks says. “It’s become a prerequisite that people managers get trained on that now.”

Central 1 Credit Union has been on a similar path for the past two years and Michel Labelle, director of technology strategy, business process and enter- prise application services, says it has learned that cultural change is the key. “The key is not lean itself but the cultural elements that lean supports and the focus on our members,” Labelle says. “We look at all our processes from a member/client point of view.”

All of Central 1’s 600 employees have had basic training in lean and it is now part of any new employee’s introduction to the company, adds Labelle. The way to introduce it is by focusing on a small area, showing how the lean approach can save time, money and improve your service, then share that story with employees. “It’s best to start with small things and do what you can where you can,” Labelle says.

The No.1 lesson of lean is to look at every process and every step from a member/client perspective and ask whether it helps them or if they would pay for it. Lean uses the Five Whys approach developed by Sakichi Toyoda, founder of Toyota. To solve a problem, it repeatedly asks “why,” drilling down to understand any fundamental issues.

Central 1 and several other credit unions have worked with Vancouver-based train- ing company Lean Sensei International. Labelle says the company has been charting new paths as it works in the nancial services sector. “Lean is noth- ing more complex than common sense, uncommonly applied,” says Labelle. “It’s about servant leadership—the people who do the work on the frontlines need to be supported. Leadership’s role is to support them and ensure they have the right tools and processes in place to be successful.”

Meulendyks agrees: “Really, it’s applied common sense and everything you do is a series of steps, which is a process that can be improved.”

A study by Bradley Staats and David Upton published in the Harvard Business Review “found that lean principles can be applied in some form to almost all kinds of knowledge work and can generate significant benefits: faster response time, higher quality and creativity, lower costs, reduced drudgery and frustration, and greater job satisfaction.”

“Many organizations suffer from process improvementitis,” the Harvard article stated. “Their leaders pay lip service to the initiative of the month—and, not surprisingly, people don’t take the initiatives very seriously.

“Turning an organization into a lean system requires a grassroots reinvention of how work is performed. That’s as true in knowledge work as in manufacturing. The transformation demands sustained investment, a huge amount of training, a new culture and new processes. Senior leadership must treat it as a long-term change program.”

“Senior leadership must treat it as a long-term change program. ” – Harvard Business Review

Meulendyks is part of a Cooperative Lean Network that brings together lean practitioners from credit unions and co-ops across the country for conference calls about once a month where they can share successes and discuss any problems. The network was started by Kate Wetherow, knowledge management specialist at the Canadian Co-operative Association. She says the informal group came together because several people from various credit unions and co-ops were sharing ideas and realized there was a growing interest in learning more so they decided to set up a monthly conference call.

Wetherow points to CUMIS as a leader in Eastern Canada that has shown how effective lean management can be and shared information with many other organizations, while First West Credit Union (220,000 members, $9 billion in assets) has played a similar role in British Columbia. “What drives us is that there is a clear value alignment,” Wetherow says. “The first principle of lean is to understand the value you bring to your customer/client or beneficiary. For credit unions and cooperatives that are very values- and principles-centric, it’s all about the value that we’re bringing to our co-op or credit union member.”

Wetherow says some staff have initially questioned the use of lean, feeling it’s for manufacturing companies. But after looking at examples, such as how Canadian Blood Services used lean to revamp its processes, or how a non-profit delivering food in New York after Hurricane Sandy dramatically increased its efficiency with lean, they understand the values connection. “Our staff gets that alignment when they see a process improved in a not-for-profit service,” she says. “Our customers are our beneficiary and improving their livelihood is the reason we exist.” ◊