How Can Credit Unions Achieve Greater ROA? O2 CEO Shares Strategy to Boost Operational Effectiveness

Credit unions are always looking for ways to do better for their members. That often means looking inward at your credit union’s operations. Credit union leaders must consider whether they have the right people, policies and procedures in place, as well as the right tools. Some may have an idea of what needs to be improved, but ensuring you’re taking the right steps can be a challenge.

The Credit Union Connection Co-Founder/Publisher/Editor Sarah Snell Cooke recently talked with O2 Consulting Group CEO Bonnie Ortiz to learn how credit unions can improve their efficiency and, in turn, help them achieve their ROA to invest back into their members and the organization. This dynamic duo digs into project management, dives into operational excellence and then wraps strategic planning around them. You won’t want to miss this episode!

Download O2 Consulting Group’s FREE Case Study: Breathing New Life Into One Credit Union's Operations: Efficient, effective and experienced project management for modern credit unions!

Read the full transcript below:

Disclosure: Transcript is automatically generated

Sarah Cooke 00:04
Welcome, everybody to The Credit Union Connection. I'm here today with Bonnie Ortiz, who is the CEO and founder of the O2 Solutions Group. Welcome, Bonnie.

Bonnie Ortiz 00:17 Thank you, Sarah.

Sarah Cooke 00:19

And Bonnie and O2 specialize in operational excellence, project management and strategic planning, which in in kind of a unique way. So we're talking a little bit about that. But first, why don't you give us a little bit of your background Bonnie? Sure, I

Bonnie Ortiz 00:34

appreciate it, Sarah, and glad to be here today. I have had a long career in both business development and operations, but my passion is really operations. I have been with the credit union industry now probably almost 20 years, and loving, you know, loving the mission driven organizations started at the Partnership Federal Credit Union through a merger, and found my way to working with people, processes, tools, their resources, and really trying to help them find all the efficiency and effectiveness that they can.

Sarah Cooke 01:11

Yeah, ya know, and right now, efficiency is so key, right? You know, for credit unions, probably every business, of course, but, you know, as the economy's kind of uncertain, and credit unions have the tight liquidity situation right now, what's essential for a strategy or a culture, or both of operational excellence?

Bonnie Ortiz 01:34

You know, I think I would start with what I just said, you know, analyzing your people, your processes, your systems and your tools on a regular basis. And there's no better time to do that than during your strategic planning. And I know that, you know, for years, we've looked at strategic planning as if Well, we know that we have to do it, you know, we know that NCUA requires it. But it's always comes as such a rough time, right? You're budgeting you're doing all kinds of other things. But the reality of it is, that's the perfect time for you now, especially after COVID, trying to get members back and trying to make sure that our membership is growing, and that we're also penetrating our existing member base, it's so important for us to stop and look at what we really want to accomplish in the next year, build our goals, not only for growth, but also to align those to our operational capacity. If we don't know whether we are efficient or effective in all areas across the credit union, it's gonna be hard for us to put that kind of a plan and a strategy together. So one of the things I love doing is starting there, helping folks to understand how to really go through a conference by aligning the two together. And make sure that when you come out of that conference, you not only have your goals identified, but some of the strategies that you are going to employ, because that way the projects that you choose that come out of that are always going to align to your goals, and you're gonna prioritize and make sure that you know, those that just aren't right, are pushed to the side.

Sarah Cooke 03:15

Yeah, it makes it easier to say no, right? It's part of the efficiency part I assume. So what are some of the cone efficient, inefficiencies that you you run into with credit union clients? And how, how can you talk a little bit about how you go about streamlining that? Sure,

Bonnie Ortiz 03:31

well, let's start where it all begins, right, with account opening. And often, you know, while we're all trying to strive for more digital solutions, and more efficient and effective solutions, we can take those off the shelf solutions and make them into monsters. You know, depending on the policies, we have the customization we put to it. And so making sure that members are going to be able to get through that application process in what they consider to be a reasonable period of time. Because otherwise, they're going to walk away. All right, likewise, on the lending side, you know, your turnaround time, you know, for your loan processing, your, you know, your loan approval. Those are two of the big areas. Then, when you start to get into the, you know, into the back office, you're starting to look at things like collections. You know, if you have a lower delinquency rate that might not be as important to you, but for those credit unions who are using a lot of indirect lending, maybe those credit unions that have a membership that doesn't have, you know, all "A" paper, you know, they have to watch that and so you can get yourself into a negative place when you don't have the right processes and procedures in place and maybe even the right outsourcing models for you. Last thing I think, I would say certainly not definitely this isn't the those aren't the only areas, but I would say that as we look at the member journey, you know that it is really important for us to track that member experience, and really look at the gaps that you have, you know, so that then you identify early on where your problems are, and then you can solve for them a lot more easily.

Sarah Cooke 05:19

how you solve force, a lot of them might be project management. Great, great segue. So you've said before to me that, you know, credit unions often come to you with leading with project management questions, what sort of requests are you seeing right now?

Bonnie Ortiz 05:39

I see three different types. The first type is really around, I've gotten myself started into this massive project. Card processing migrations, for example. They're large, they're complex, they're riddled with risk, and they often have two or more vendors associated with it. So when you take a look at something like that, small and midsize credit unions often don't have the bandwidth to be able to support a project and support everything they do on a day to day basis. And most of the time, they really don't have the disciplines in project management along with their subject matter expertise. So they end up getting themselves halfway down the road, three quarters of the way down the road. And they're in trouble. And so I'll come in, and I'll, you know, kind of resurrect that with my tools and my processes. The other thing that I see is folks really wanting help with prioritizing the projects that they know they have to get done, and figuring out how do I get, you know, 10 pounds into a five pound sack. And we work through that to make sure that they are choosing the right projects, and then putting the right people to it and having a playbook that they can use for scope management, timeline management, you know, budget management. And then I would say the last place that I see it is from process improvements. So we're just talking about operational efficiency and an excellence that if you want to get there, every process improvement project you identify is going to require a project plan. And so you know, if I'm asked to help or to pry it provide advice or recommendations on how to improve that particular department or process that always ends up being a project. So that's step one, and then a step two. Yeah,

Sarah Cooke 07:31

and it's interesting, because those inefficiencies, really run counter to providing members the highest return possible. And that ROA is how we continue to serving members. Right?

Bonnie Ortiz 07:42
I mean, isn't that the truth?

Sarah Cooke 07:45

Yeah, helps credit, credit unions remain relevant, you know, by being efficient, producing a better bottom line, so that they can continue serving more members with newer, newer, you know, get widgets and whatnot. Along the way remaining a little bit,

Bonnie Ortiz 08:01

I was actually I'm actually sitting in a credit union today. And this morning, I sat in a meeting, and we were talking about something with regard to onboarding your new staff, and how difficult it is in Member Services and retail areas these days to be able to do that efficiently and effectively, and retain that staff. Right. And all the comment was made by the CEO. Well, you know, when we started this process, we didn't have you and we didn't have these project management playbooks. But now we do so we're gonna start this all over again.

Sarah Cooke 08:32

And so since we've kind of gotten on to the philosophy behind credit unions, one of the things that O2 does, it's a bit different is in strategic planning. You mentioned this at the beginning that it has a kind of through a operations lens, if you will, can you talk a little bit more in detail about that?

Bonnie Ortiz 08:52

Um, sure. You know, O2 is very different in a number of ways. You know, my philosophy is that, you know, you roll up your sleeves, and you help people to get down where they are, you know, so you want to look at what they're trying to accomplish, what their goals are, what their needs are. But often, they don't even know the right questions to ask, you know, because they're so busy, you know, all day long. And again, I'm gonna say, smaller and midsize credit unions are trying to wear a million hats. And so bringing the right people to the table, asking the right questions, making sure that they're, you know, thinking about it from the lens of operations. You know, operations is often the back office, it's often thought of as the back office, but it really isn't. When you look at growth, when you think about growing your membership, and ensuring that you both grow the membership and deepen the engagement with your membership. If you don't have a plan for getting there, it's just not gonna happen. Because if your people aren't strong enough, if you don't have the right people in the right seats, if you don't have the right processes or any processes, and if you don't have the right tools, or the right resources that he and training materials, etc, you're not going to meet those goals. And if you do, your staff is going to be so burnout. You know, by the time that you get to the end that the churn starts to occur, you know, that's what we do. And I would say one final thing, and that's that, we roll up our sleeves, you know, we are not just strategists. Have a group of very seasoned people who have been there, they've lived it, they've done it in almost every department, you know, in a credit union. And therefore, you know, they want to roll up their sleeves and not just build the blueprint with the tasks and assign them to the credit union folks, but they're gonna willing to take on those tasks. Yeah,

Sarah Cooke 10:58

yeah, no, and the, that operational piece is so important in the efficiency, especially with those small and midsize credit unions that you mentioned, because, you know, we're seeing them merge left and right, and the more efficient we can be. And again, as you mentioned, wearing, you know, two or three hats, each person, you know, the more efficient you can be, the more likely they are to succeed in surviving and thriving as a credit union. So anyway, I'm gonna get all philosophical in the credit game. Great Britain philosophy again, but anyway, so I'm gonna let you wrap this up, why don't you share your final thoughts with us about, you know, credit unions, that operational efficiency, however you'd like to wrap it up, go for it.

Bonnie Ortiz 11:46

So I think I'm going to start with something that I say on my website kind of is right out of the gate, and that's, you know, I have had the pleasure of working with an enormous number of incredible CEOs, people with vision, people with foresight, people who are innovative, and people who really want to make a difference. Often, those folks are not married to someone within their own credit union that has the same passion, you know, this same intent and focus on the operation side of the business, because I love that side of the business so much, because I enjoy partnering and having that teamwork, with the CEO with the rest of the C level suite. It just makes it so easy for us to come in as a team. And really, again, roll your sleeves up and help. So whether I start at the beginning by helping you with your strategy, and I'm determining how we align those goals to you know, your projects, or whether I start at the back end with project management, because you're in trouble, you know, and the goal was to really build a long term relationship. The goals [should] be there to serve those teams that are serving their members. Its members first, you know, always. And that's just such the cool thing to me about credit unions, you know, being in this industry. I've been in the telecommunications industry, the healthcare industry, and now the financial industry, all focused on credit unions. I don't think I'd go anywhere else. Yeah,

Sarah Cooke 13:24
it has excellent place to wrap up. Thank you very much for your time today Bonnie.

Bonnie Ortiz 13:28

You're welcome.