During a recent The OpEx Webinar episode, Tim Healey spoke with guest Kyle Kumpf, Process Improvement Manager at Heartland Financial USA, Inc., about the bank holding company’s use of OpEx principles – and discussed valuable lessons for all offices in the conversation.
1. The more people who have OpEx skills, the greater the success.
Heartland utilizes a bottom-up and top-down approach to improvement. Since inception, it has leveraged the expertise of its employees in 200+ projects, which have resulted in approximately $8 million in earnings and $22 million in cost savings – ultimately allowing it to become 14% more efficient compared to 7% by its high-performing peers. A portion of this can be attributed to OpEx principles being applied.
2. OpEx doesn’t have to be all or nothing.
To date, Heartland has only attempted Operational Excellence in two areas: Commercial Loan Underwriting and Small Business Underwriting. However, even reaching part of the destination in these areas has yielded goal turnaround time consistency increases to 85% and 95% respectively.
3. Spend adequate time on product families.
After the first OpEx attempt, Heartland achieved its target 11-day turnaround time in its Commercial Underwriting area 85% of the time – not quite its goal of 95%. It realized it could have seen greater improvement by designing multiple product families rather than just one. According to Kyle, precise product family analysis is key.
4. Apply lessons learned.
When Heartland moved on to its Small Business Underwriting area, it understood the importance of the product family matrix and put more effort into that critical first step. It created much better families by using more detailed criteria and more granular product types, and broke out complete from incomplete applications into two value streams. This helped jump from the goal turnaround time being met 67% of the time to 95%.
5. To leverage all OpEx can offer, you must put the work in.
It takes a lot of effort to design lean value streams to create OpEx. From creating a detailed map and analyzing mix and demand to creating workflow cycles and visually indicating abnormal flow, Heartland knew the importance of working through all the steps to realize results like an 82% reduction in turnaround time in its small business underwriting area.
6. It’s okay to start small.
Some companies opt to start with easier implementations to get their feet wet while others begin with more complex areas. Heartland opted for the latter, but regardless of where an operation chooses to begin, the important thing to remember is to not to worry about trying to get the entire organization on board right away. Instead, get a small group of supporters then use them as advocates to expand across the company.
7. Even if OpEx stalls temporarily, the work isn’t for naught.
For Heartland, after success in its Commercial and Small Business Underwriting areas, it sought to apply the OpEx principles to its Scottsdale, Arizona-based Mortgage Operations. After completing the full design, the project took a back seat to other project priorities that pulled resources away. However, the organization can easily pick up where it left off because the template simply must be updated before the institution rolls with it.
8. Moving forward is paramount.
Overanalyzing and getting bogged down in the details can stop progress. And staying put can have negative consequences – in Heartland’s case, it could hurt the bottom-line or the customer’s experience. The organization knew it had to keep moving forward toward the destination of OpEx even if it didn’t spend as much time on certain principles, like pitch.
9. Educate at every opportunity.
Heartland knows that it’s easier to grasp concepts than to practice them so it takes every opportunity to educate its people. And not just at the beginning but as the work is being done to help solidify the buy-in of the people on teams as they progress.
10. Be persistent.
It takes patience and persistence to achieve OpEx. The important thing is to keep pushing forward. Continue to learn through training and books, and don’t hesitate to ask for help either internally or externally.