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VIENNA, Va. – How do you reorganize a 4,200-employee business with minimal confusion and upheaval and without laying anyone off? Brian McDonnell, president/CEO, Navy FCU faced that scenario last month when he reorganized the operations and support sides of the $18.5-billion credit union, and though by his own admission there were some bumps felt and complaints heard along the way, the changes have so far gone “fairly smoothly.” As McDonnell describes it, the former staff organization chart for the credit union was “more product focused than member focused.” On the operations side, for example, there were individual product groups and vice presidents for each of the CU’s products, and every time Navy introduced a new product it would create another department. “If we had a member who was delinquent on several loans they had with us, they would get calls from someone in the collections departments in each product area. That can get very annoying,” McDonnell said. Exactly how long Navy FCU was organized like that is unclear to McDonnell, but he said it was like that for as long as he’s been with the credit and that’s been 30 years. The reorganization “has been as long time coming,” he said. Actually, McDonnell had considered reorganizing Navy for the past two years, but it was the credit union’s plans to open its fifth call center in Escambia County, Fla. near Pensacola that finally got things moving. “It was the perfect opportunity,” he said. “I decided if we were going to reinvent Navy FCU, it didn’t make sense to do the new call center the same way we did our other four call centers.” Once McDonnell made up his mind to move on his ideas, it didn’t take him long to put them into action. He put his plans down on paper in March, and by June the reorganization became effective. The objective, he said, was to take advantage of Navy’s delivery channels so there would be uniformity in the credit union’s delivery programs. In mapping out the reorganization, McDonnell got input from Navy FCU’s management council. The goal of the reorganization, he said, was not only to align the credit union so it could better serve members, but to also allow for staff cross-training and succession planning so there would be a steady stream of upper level managers. McDonnell also made sure he kept Navy’s staff apprised of his plans and the purpose for the changes. Getting the staff’s input upfront, he said, was important so they’d learn about what he had planned “before they knew something was up.” “Change is hard. There was backlash from some of the staff, but I wanted their feedback. When you tell a person, for example, that they’re going to lose responsibility for an entire call center and they’re being moved under the delivery channels department, that takes some adjustment. I reminded them that the priority is serving our members and not to forget that target,” said McDonnell. The reorganization still divides the CU’s staff into a support group and an operations group, but now all the delivery channels – call center operations, electronic services, network services, and projects and automated systems – are together under the delivery channel department instead of them being organized by product area. Also, instead of having separate departments for each of Navy’s loan products, there is now one lending department that includes secondary marketing, credit and loan production, loan servicing. There is also one collections department which is responsible for collections works on all of Navy’s products. In addition, McDonnell promoted five women to vice presidents positions who had previously been assistant vice presidents – Debbie Calder, vp, call center operations; Lynda McDaniel, vp, membership; Kathy Zierers, vp, savings products; Patricia Schneck, vp, marketing and advertising; and Cindy Moore, vp, product development. As for the Escambia County, Fla.-call center, it will use a skills-based routing system that features multi-graded personnel who have various levels of skills in handling incoming calls. A first level call center employee, for example, will handle basic calls such as stop payments or third party funds transfers. More advanced level employees will handle more complicated member calls such as troubleshooting or IRA assistance. When a member calls in, a computerized system will match the difficulty of their request with a representative with the appropriate skill set. Navy will offer on-going training to call center employees so they have the opportunity to increase their skill set and raise their level. “When members phone the call center for assistance they want to be connected to the appropriate part of the organization that can help them and not have to be transferred to a different person for different product information,” he added. Ground breaking for the planned 55,000 square foot facility began in March, and operations are expected to begin by December 2003. Navy FCU will initially employ a staff of 55 there by the end of 2003. They will include 15-30 managers and supervisors from Navy FCU’s Virginia headquarters who will apply for transfers. Navy FCU projects employment at the call center will reach over 400 by the end of 2005 and almost 500 by 2008. Eventually all of the credit union’s call centers will be migrated over to the skills-based routing system. McDonnell estimates that should take until the end of 2004 to be completed and to work out the kinks in the system, but he’s confident the new organization structure will work because “we have a great bunch of managers.” -

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