Does your credit union have ‘Phase Two Syndrome’?

For a long time I worked in credit unions and couldn’t understand a simple problem: It seemed like we were really good a cranking out the ‘big bang’ project. You know, converting a bill pay or converting to a new credit card provider. But afterwards? We would struggle. We would struggle to do updates to those products.

It seemed to me that when we got the product together we were really good at reaching parity, meaning that the product we were changing to was 80% the same as the product that we had, and it was 20% different. That 20% difference was usually in features. Sometimes it would be cost. But most of the time it was features. Somewhere along the way while we were implementing the product we would learn that we could get the product out on the timeline that we had and get to parity, meaning that it did all of things that the old product did. That was sort of the bar.

Then, later on, we would make a promise and we would say, “We will come back and do the rest.” And we would usually call that Phase Two, which would lead us to “Phase Two Syndrome.”

Here’s how to tell if you have Phase Two Syndrome:

  • Symptom #1 – There is a general distrust between the departments in your organization and Information Technology.
  • Symptom #2 – You are frustrated with most of your digital vendors because you need new features or have paid for new features and they are not out yet. Then, when you go to find out what the problem is, every single person points to the other person.
  • Symptom #3 – People from other departments are sneaking around Information Technology with cookies and free food in order to coax programmers and implementation people to do their bidding.

If any of this sounds like you, then you likely have Phase Two Syndrome.

How do you fix Phase Two Syndrome? Well, first you have to understand the root of the problem, and if you’re executive leadership at your credit union, I hate to say this … you’re part of the problem. The challenge is this: When you have a new product and you implement it, there’s a big difference between what I’ll call Phase One; implementation, and then Phase Two; which is continuous improvement. We’re all really good at Phase One, but it’s really hard to handle Phase Two. That’s what creates distrust.

Let me give you an example. Here’s a scene from a conference room at your credit union. Two people are sitting around the table. It’s likely a manager from credit cards or another processing area, and an IT manager.

IT Manger: So I see we have a new project on the books.

Department Manager: Yes, yes we do. I’m very excited.

IT Manager: Okay, well let’s get moving with it. I was looking at the timelines, and we can only get A, B and C done. We’re going to have to push off E, F and G.

Department Manager: Yeah, that’s what you said last time when we were implementing project X, but we never got back to that.

IT Manager: Oh come on, you know that we had those regulatory issues come down and the NCUA was in and we just didn’t have time to do it.

Department Manager: Yes I know, but when are we going to get to it?

IT Manager: Oh, I have plans for that.

Now, here is the interesting thing: The IT manager sincerely has plans for this. He is not in the wrong. He is doing what he can to get this done. The department manager isn’t in the wrong here, either. It’s fair of her to expect these features and to expect a timeline for Phase Two. The challenge is that Phase One implementations require a different mind set than Phase Two implementations. Phase Two implementations run along a practice we call “continuous improvement.”

Now, let’s just talk about that for a minute: continuous delivery and continuous improvement. There are companies like Facebook, Twitter, and Apple that continually put out releases to their products. Have you ever had an app on your phone automatically update? Keep an eye on it. You’ll see the big players that I mentioned above all deliver continuous updates. This is important because this instills a trust into their consumers and members.

If you have one of these products and there’s a bug or an issue with it, you learn to trust that there will probably be a new release within the next few days. So before you complain, you’ll sit back and wait to see if it gets fixed. You can then install the new update as soon as it’s available.

However, what I’ve determined in the credit union world is that these releases are few and far between. If you have a mobile banking product or home banking product, it’s not likely that you will even push out yearly fixes. In fact, bi-annually would be good. So, how do you resolve this?

Well, continuous improvement and continuous delivery requires a separate project management track. It’s a different mindset. It uses agile, and because it does that it means that you’re going to continuously be pushing to put out new things.

Now, many of you are going to say, “Yes, but we are at the mercy of our vendors for these improvements.” I would argue that most vendors have improvements waiting in the wings for you right now. The challenge they have is getting on your schedule to get it out the door. However, if you knew that you were going to do a release every quarter, and you knew that you had a capacity within IT of X amount of hours, you could plan for that and you could always be continuously improving your world.

This would also help to restore trust. The distrust between the departments and IT that sometimes occurs is really synthetic. It’s not real because the reality of the situation is that IT wants to perform and deliver, and the department also wants to deliver. They’re put at odds because you’re trying to fit a round peg in a square hole.

The continuous improvement process allows the group that is iterating on the platforms you have to focus on those iterations. It also allows the groups that are instantiating new product, which by the way is much more far reaching, to focus there. It changes whole processes within your organization. It can change your call center and it can touch all areas, which is why these projects are so difficult. Think of a core conversion. Think of a home banking change.

But something little like fixing a bug or adding a small new feature? You can learn to master the art of the little and do small releases. I would even recommend for most credit unions working toward a bi-annual release as your first step. You would see a tremendous improvement both in the relationships of your departments and your relationship with your members.

Once your membership learns to trust that you’re going to do regular releases, continuously deliver updates you won’t see the types of reviews that we typically see in iTunes. And, once the staff begins to trust that there absolutely will be a Phase Two, they will calm down as well, and IT will be happy.

What does this cost you? Well, it’s going to cost you some resources. It’s going to cost you some implementation time and some training time. That’s why here at BIG we have our digital strategy offering that includes guidance on continuous improvement and delivery. These are the kinds of things that we like to help credit unions with.

John Best

John Best

Financial technology service expert John Best crushes the reiterated maxim “thinking outside the box” to tiny particles, leveraging his lofty, yet proven, financial technology “innovativeness” for credit unions nationwide. Recently ... Web: Details