Do You Have a Culture of Continual Improvement?

There are a couple of things I know that are true about change.  First, for us to improve in life, it requires change.  Second, what is very good today may not cut the mustard tomorrow.  Third, if you do not improve, someone else will leave you in the dust.

We see these characteristics in finance all the time.  Think about all the different changes to the delivery of financial services that have hit over the past decade—internet banking, using an app to bank on your phone, online mortgage and loan products, texting payment, crowdfunding—just to name a few.  Now would any of these items ever come up if credit union and banking folks decided in the year 2000 that what we have now is all OK and there is nothing ever more in the future that is needed to improve the communication of delivery channels between the client and finance professionals.

We must hoist the sacred cow upon the alter of improvement and start the bar-be-que if we are to ever grow as a company.  For this to work best in an organization, it requires a culture of continual improvement.  This concept is so important to some companies that you can find it as one of their core values.  But even if it is not identified as a core value, you still need a heart seeking attitude of how we can do better.  How can you grow?  If you don’t it is like my Aunt Lil used to say, “Once you have fully ripened, the next step is that you start to rot!  So, stay green and learning in life!”

This desired culture requires that you take time to inspect everything that you do to see what can be done better.  Many times, it is easy to do what we call the “spilt milk” analysis on something that went wrong.  In my last banking job, we took time periodically to do this with loans that went bad.  Sometimes, we could identify things that we failed to do at underwriting that would have mitigated some of the loss.  It is easier to look at a failure and analyze what could be done better.

We don’t often think about inspecting the times we succeed.  Often that time is spent on celebrating.  But with every win, there are key actions that should be repeated for the next success.  There are also those areas where further improvement can be made.  Recently, Bill Belichick, coach of the New England Patriots, was asked what other things he would want to accomplish in his coaching career before he retires, as he is already one of the most successful coaches in professional football history. 

“Well I just want to have a good practice tomorrow.”  was his reply.  This shows a commitment to continual improvement.   It also shows a method to break down what needs to be done in small steps.  It is easy to make today better than yesterday.  It is nearly impossible to make this year better than last.  But if you work on making each day better, you will accomplish the latter goal. 

Continual improvement creates momentum in the organization.  Momentum for items that are new or improving, can be one of the best friends of a leader.  A leader who is trying to swim upstream against a tide of negative momentum in the company, often fights losing battles.  I found this out years ago when doing martial arts.  If you can use the momentum of your attacker, it is much easier to get him to fall.

So, once your organization has decided that you will be committed to continual improvement, your next step is to brand that.  You may not want to just call it “a commitment to continual improvement.”  Maybe terms like “make it better”, “finding new solutions”, “grow outside your confines of yesterday”, or “do more today than yesterday” express continual improvement in a catchy way that the team can latch onto.  This language is important as you can drop it in your conversations with others in your company.

After branding it, the next step is for the leader to model continual improvement.  A leader must show that he/she is getting better personally to motivate the team to do the same.  The question here is if everyone in your area is doing the same things you are doing to get better, are you improving or are you just keeping busy each day.  If you want continual improvement as part of your culture, you must show it intentionally each day. 

The next step toward making continual improvement a part of your culture is to teach it.  Teaching a concept always helps you master that concept or skill.  We see that on our end when we teach lender classes.  This does not necessarily mean that each leader must get up and give sermons on continual improvement, but it needs to be sprinkled in normal conversations and may include an occasional sermon.

Andy Stanley gives five different questions that need to be answered when you teach a behavioral concept that you want in your organization.  You need to wrap your culture characteristic around each of these questions on a continual basis. 

·         What it is?

·         Why is the characteristic important?

·         What will it require of us?

·         What does it feel like once we have that?

·         What is at stake if we have it and if we do not?

After continual improvement is taught, the next step is to institutionalize it.  Now this is different for different companies.  It may include items like allowing your new employees to evaluate the company once or twice in their first year of work.  Another idea is to do a review of every major event once an event is complete.  We eliminated the traditional employee review process for a quarterly check-up that has many ways a team member can judge what is working and what it needs to be changed.

The final step is to recognize or reward continual improvement.  People will repeat those items they are rewarded for.  So, this can be publicly rewarding things that team members do to improve.  This encourages further innovation and initiative.  These items can be small or they can be large. 

You can probably guess now that this process is one that requires it to all be repeated, over and over again, in a company if they are committed to getting better each day.  Sometimes, a good place to start is to see what are you doing that is old and tired with your staff or clients.  Sometimes seeing that will help put ideas in your mind of where to begin the path of continual improvement.



In other news, do you know who has silently become a giant bank that you do not think of as a bank?  Amazon!  Amazon reported that Amazon Lending Service has surpassed $3 billion in loans to small businesses since it started in 2011.  In the last 12 months alone, Amazon has loaned over $1 billion to businesses.  This helps the business expand and hikes up sales for third party merchants, which provides another Amazon revenue stream. 

Amazon Marketplace VP Peeyush Nahar stated, “We created Amazon Lending to make it simple for up-and-coming small businesses to efficiently get a business loan, because we know that an infusion of capital at the right moment can put a small business on the path to even greater success.”

The rate of repeat business is high as over 50% of the 20,000 small businesses that use Amazon Lending, end up taking additional loans.

So the lesson here is if you only think your main competitors for lending will always be banks, you are wrong.