Lessons from McDonalds
I have been working in credit unions since June 18, 1980. That was the day I started my career as a teller at Pacific NW Federal Credit Union in Portland, Oregon. It was a Government employees credit union. We were allowed to smoke in the office. The only rule was when a member came to our window, you should put your cigarette down in your ashtray (which had the CU logo and was provided by HR). I’m not kidding. We had computers but there was no screen. If you wanted to get a member’s balance you punched in some code, crammed a card into the top of the typewriter wheel and pressed print. A great many trees were killed back then.
This small credit union did not have the luxury of a greeter station or even an MSR position. So new accounts, new CDs, everything but loans were done on the teller line. I remember us having a “Lucky 13” party to celebrate hitting $13 million in assets. About the same time I was promoted to the newly created position of Member Service Rep. I had a desk, a renewed sense of purpose, my own business cards and most importantly a box on the organizational chart. On my first day HR showed me the org. chart. I had never seen such a thing and so asked the obvious question, “Where are the tellers?” She held up the piece of paper and waved her hand below it and said “Down here.” So you can see how excited I was to basically exist. We were growing at a pretty rapid pace and I saw more changes in the structure. Generalists becoming specialists at such important tasks as typing up a certificate of deposit.
Three years later I left Pacific NW for greener pastures and a chance to learn more. I went to work for United Grocers FCU. This credit union served independent grocers who pooled their resources to try and compete with the large chains by centralizing their distribution and back-office functions. Pretty slick. The credit union was located across the street from the warehouse in a house. The living room and dining room made up the lobby, complete with one teller window. The President’s office was in the bedroom and our back office was the kitchen. We had one desk where a member could sit for a longer transaction like getting a loan. We were a staff of 4 with $6 million in assets. And other than the accounting (which was mostly done with General Ledger books still and the job of the President) we all knew how to do everything. Teller transactions, open a checking account, take a loan application, close a loan. I made $750.00 a month.
Fast forward to today. I heard a friend say that their credit union was working on creating “Universal Employees” in all of their branches. I had not heard this phrase before so I asked her what that meant. She told me that members don’t like it when they get passed around from desk to desk to get things done so they are cross-training all member facing employees to be “generalists” so they can open an account, take a loan application, close a loan…etc. So what I heard is they are a $600 million credit union that wants to act like a $6 million CU.
Bigger is not better. In fact in all my years I have found that the bigger the credit union the more complicated the processes seem to become. Case in point: Back in 1984 we could get a loan out the door the same day using a manual typewriter to type the loan documents (in triplicate with carbon paper – liquid paper anyone?) and a dial-up modem to retrieve a credit report (not a score – there was no such thing) and a Burroughs machine to calculate the monthly payment.
Today at many credit unions it takes 24-48 hours to get an auto loan out the door (unless you’re an indirect auto loan which are super speedy because there is built in incentive to do so).
With the exception of online banking, and yes, I’ll acknowledge increased regulation, the tasks have not changed much in 37 years. Getting a loan out the door should be crazy fast now, and it’s not rocket science.
I will acknowledge that I think many credit unions are stuck in the rut of trying to be all things to all people. They’ll offer 5 different checking accounts, IRAs, HSAs, Trust Accounts, Mortgage Loans, Business Accounts, etc. I see the need for specialists when this is the case. And maybe therein lies the problem and a possible solution. Get back to the basics, what do our members really want?
I just saw the movie The Founder. The story of Ray Kroc and McDonald’s. The movie sought to expose the fraud of Ray Kroc – he technically wasn’t the “founder” of McDonald’s but rather he “found” the McDonald’s brothers and their revolutionary model that was the birth place of fast food. Mac and Dick McDonald had a full service restaurant with 37 items on the menu. They saw their business boom and then decline and eventually it flatlined. As Dick was closing the books one month he noticed that 3 items represented 87% of their sales. Burgers, fries and soft drinks. He convinced his brother to shut down the restaurant and retool the entire kitchen to deliver only 3 items in 30 seconds. It was revolutionary. It eliminated dishes, silverware, wait staff. And overnight it was a hit with families who could buy a burger for 15 cents! Nothing fancy, four dots of ketchup, four dots of mustard, a sprinkle of onion and a burger patty on a bun, wrapped in paper.
What is our burger, fries and shake?