Transforming Agile Culture at Unity SACCO

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Unity SACCO, a cooperative society providing financial services to its members, faced significant challenges that threatened its sustainability. Financial mismanagement, a stagnant culture, operational inefficiencies, and declining member satisfaction were just the surface symptoms of deeper issues. Despite having a well-formulated strategy, execution was poor. The SACCO’s financial health, as indicated by key financial ratios, deteriorated, prompting the management to seek external expertise. Summit Consulting Ltd was hired to work with the management team to transform Unity SACCO using the ACT (Assess, Change, Transform) approach. The Sacco experienced several challenges, including:

  1. Poor financial controls and lack of transparency led to significant losses, erosion of member trust, and declining key financial ratios such as:
  • Return on Assets (ROA):Dropped from 1.5% to -0.5% over two years.
  • Debt-to-Equity Ratio:Increased from 1.2 to 2.5, indicating over-leverage.
  • Net Profit Margin:Fell from 10% to 2%, reflecting declining profitability.
  1. A risk-averse and change-resistant culture, with people were rigid to change, prevented innovation and responsiveness to member needs.
  2. Outdated processes and technology led to slow service delivery, errors, and high operational costs. The Sacco processes were mostly manual leading to bureaucracy and slow turnarounds.
  3. Increasing member complaints and declining satisfaction scores indicated a need for a more customer-centric approach.

Summit Consulting was engaged to work with management to change the situation. The Summit Consulting team began with an inception meeting to align expectations, understand the SACCO’s vision, and set the stage for the transformation journey. We deployed our ACT approach – assess, change and transform as follows:

Stage 1: Assess

We started with a detailed Assessment of the Sacco:

  • Conducted a comprehensive analysis of financials, operations, portfolio asset quality, management efficiency, liquidity, and member satisfaction.
  • Identified key pain points through surveys, interviews, and focus groups with members and employees.
  • Mapped existing processes to pinpoint inefficiencies and bottlenecks.
  • Despite having a strategy, it was discovered that execution was poor due to lack of ownership, silos, and slow decision-making processes.

Unity SACCO was like a sleeping elephant: large and powerful but slow and unresponsive. The challenge was to awaken this giant and harness its potential effectively. To do this, clarity of the challenges was critical. We needed to make sure all key stakeholders understood the hole the Sacco was in and the interventions to reverse it.

Stage 2: Change

We then proceeded with the strategy refresh, in light of the new developments.

  • Conducted strategy workshops to refine and refresh the SACCO’s strategic plan. Prior to the workshops, we issued pre-workshop surveys, visited the Sacco’s major outlets / branches, and help discussions with key customers and partners. This further informed our understanding
  • Focused on setting clear, actionable goals and defining roles and responsibilities to ensure accountability. We helped the team define clear lead and lag indicators, and established accountability sessions to create clarity of the journey and outcomes.

Cultural shift:

  • Launched a “Culture of Excellence” program to promote values of agility, innovation, and member-centricity.
  • Created cross-functional teams, termed “Agility Packs,” similar to packs of wolves known for their coordination and efficiency. These teams worked collaboratively to drive innovation and solve critical business challenges.
  • Recognized and rewarded employees for contributions to innovation and improvement.

Operational efficiency:

  • Introduced lean methodologies to streamline processes and eliminate waste.
  • Upgraded technology infrastructure, including the adoption of a modern core banking system.
  • Automated routine tasks to reduce manual errors and improve speed.

Financial management:

  • Implemented robust financial controls and auditing processes to ensure transparency and accountability. We ensured that key people are recruited into key roles, and specifically a certified public accountant to lead the chief finance officer role. This strenghtened the finance and accounting function.
  • Provided financial management training for staff to enhance skills and knowledge, starting with the board members.

Member engagement:

  • Rolled out a “Voice of the Member” initiative to continuously gather feedback and insights.
  • Developed new products and services based on member needs and preferences.
  • Enhanced communication channels to keep members informed and engaged.

Unity SACCO aimed to transform from a sleeping elephant into an agile cheetah: fast, responsive, and adaptable. This change was essential for competing effectively in a dynamic market.

Stage 3: Transform

During the strategy workshops, we explored ideas to transform the Sacco. Some of the ideas that came up led to:

  • The establishement of a continuous improvement framework to ensure ongoing refinement of processes and services.
  • Regularly conducting strategy reviews and agile retrospectives to adapt to changing market conditions and member needs.
  • Fostered a culture of innovation by encouraging experimentation and rapid prototyping.
  • Expanded digital services, including mobile banking and online loan applications, to improve accessibility and convenience for members.

Results

Financial health and transparency

  • Improved financial controls led to a significant reduction in losses and restored member trust.
  • Key financial ratios showed marked improvement:
    • Return on assets (ROA):Improved to 1.2%.
    • Debt-to-Equity Ratio:Reduced to 1.4.
    • Net profit margin:Increased to 8%.

Agile and innovative culture

  • Employees embraced the new culture, leading to higher engagement and productivity.
  • Cross-functional teams drove innovation, resulting in new member-centric products and services.

Operational efficiency

  • Streamlined processes and upgraded technology improved service delivery times and accuracy.
  • Automation reduced operational costs and increased efficiency.

Member satisfaction and engagement

  • Member satisfaction scores improved significantly, with higher engagement and loyalty.
  • Positive feedback on new digital services and product offerings.

Unity  SACCO’s transformation journey highlights the power of the ACT approach in creating an agile culture for strategy execution. By assessing the root causes of failure, implementing necessary changes, and fostering a culture of continuous improvement, Unity SACCO successfully revitalized its operations, restored member trust, and positioned itself for sustainable growth and success. The metaphors of the sleeping elephant and the agile cheetah illustrate the importance of agility and responsiveness in driving organizational transformation.

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