Harvard business professor offers tips for operationalizing rapid pandemic response.
Like many other businesses, credit unions had to adapt quickly to the COVID-19 pandemic to steer clear of “deer in the headlights” syndrome and support members, employees and communities with critical needs, says Euvin Naidoo, senior lecturer of business administration with Harvard Business School, Boston. In this Q&A, Naidoo discusses how this crisis accelerated organizations to reprioritize, refocus and reorganize to be able to serve the needs of members and other stakeholders—and how they might incorporate this responsiveness into their ongoing management and operations.
Q: In your view of credit unions and the broader business community, how can leaders hold on to the practices that facilitated a quick and effective response to the pandemic to serve their organizations well in strategic decisions moving forward?
A: Many adopted practices, such as convening a core working group, swarming—having as many team members as possible work simultaneously on the same priority item until it’s done—or gathering specific teams to address specific challenges. For those new to agile practices, new rituals were knowingly or unknowingly adopted from the agile toolkit. Teams had to adapt to effective remote working, and some customers to new channel experiences. These digital and remote channels were either ready or needed updating or adaptation, which may have taken place in time or not. For many customers, the immediate challenges of a liquidity crunch may have also needed immediate support and response.
For credit unions, the ability to have the muscle memory to effectively and appropriately respond to member needs became critical. Changes that took place were often across several levels. At the operational level, the response times to deliver and engage members in dire need often needed to increase. At the strategic and enterprise level, leaders often had to work to drive decision-making closer to members, empowering staff to avoid delays.
As credit unions refocus and regain some “organizational lung capacity,” the question becomes: Can some of this new muscle memory developed remain? That decision will involve several steps and conscious engagement. First, leaders have to decide what practices are sustainable on an ongoing basis. An immediate step is for leaders to start with unpacking practices that made teams more effective and happier in their roles. Happiness is a core tenet of agile teams: Empowered teams that deliver on projects are usually happy teams.
The next few months will be key for leaders to listen to their teams and members as they explore which practices and operational changes delivered the most impact and consider how to embed these. This works to match operational agility with the required agile mindset that leaders need to smartly introduce newfound focus into the ongoing cultural DNA of the organization.
Q: What steps or processes do credit union leaders need to adopt to incorporate flexibility/agility into their strategic thinking and planning? How does a flexible approach to strategy look different from the way many credit unions now operate?
A: Credit unions play a vital role in supporting members, who are the lifeblood of their organizations and communities. In financial services, time is critical for stakeholders. Turnaround time for credit decisions can make the difference for a business or entity staying open or closing. As such, investing in both the operating model and enterprise strategy to break down silos across the organization to drive faster response times is key.
For many organizations, the pandemic has temporarily removed these barriers, as teams had to come together to solve issues. The focus on using this time to reflect on what has helped drive fast and smart decisions and to work to embed these positive practices is linked to mindset and leadership. Some credit unions may have already started agile journeys prior to the crisis, while others may be new to these practices. Regardless of where a credit union sits at present, leaders can work to explore parts of the organization that have effectively managed response times, member satisfaction and team happiness.
The journey will be different for each organization. The starting point depends on the current operating model as well as mindsets of the core leaders and teams. Agile change usually starts in technology-related teams. How did the credit union fare in digital channel delivery? Were updates to or the launch of an app possible over this time? Were digital and remote channels effective, or did they require a rapid investment?
At the same time, it is important for leaders to look beyond technology. Many organizations can start in areas traditionally not viewed as a home for agile practices, including risk and credit operations. Was a fast track for top-tier customers developed so that those with less complicated applications that met established criteria were cleared sooner? In marketing and communications, was the loop between business units and the relevant marketing team on an iterative operational cycle that enabled swift and real-time releases of information to internal teams as well as members?
Smart leaders are looking to learn and reflect on what can now be built on, with a mindset of running the business and adapting and growing it in an iterative manner. Was there a department or team in the organization that coped especially well in crisis mode? What can be learned and harnessed from these strong performers is a good starting point.
Q: How can executives and board members recognize the best practices they discovered while operating in emergency mode that can be adapted for longer-term strategic thinking and responsiveness?
A: Agile practices are often cited as being easy to understand and hard to implement. Any cultural change is a challenge in times of “normal” operations. In a crisis, it becomes an even greater challenge. The goal is to drop terms and jargon, including “agile,” and focus on what helped improve flow and delivery to members and staff.
For these practices and rituals to be embedded, the toughest part of an agile transformation needs to take place—the move to adopt an agile mindset. Agility is ultimately about increasing transparency, improving communication and getting closer to members by empowering teams that are closest to members. There is no need to adopt a “big bang” approach to rolling out an agile operating model. Many of the most successful agile transformations started with a pocket of excellence that grew by building on successes that served to delight customers.
Karen Bankston is a long-time contributor to Credit Union Management and writes about membership growth, operations, technology and governance. She is the proprietor of Precision Prose, Eugene, Oregon.