IdeaScale Nation

Sunshine Coast Credit Union: Innovation Starts with Culture

July 15, 2020 IdeaScale Season 2 Episode 4
IdeaScale Nation
Sunshine Coast Credit Union: Innovation Starts with Culture
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IdeaScale Nation
Sunshine Coast Credit Union: Innovation Starts with Culture
Jul 15, 2020 Season 2 Episode 4
IdeaScale

Sunshine Coast Credit Union (SCCU) is a state-charted credit union located in British Columbia in Canada. Alex Kostenko, the Director of Strategy & Innovation at SCCU, believes that building an innovative organizational culture bridges floating ideas to implementations in reality. From SCCU's Organizational Health Index (OHI), Alex learned that advocating for the ideology of innovations in a firm isn’t enough to drive changes. Employees need a structured system with appropriate tools to be innovative, and IdeaScale provides a platform solution to connect culture to innovation and has helped SCCU increase the implementation rate by 40%. 

Show Notes Transcript

Sunshine Coast Credit Union (SCCU) is a state-charted credit union located in British Columbia in Canada. Alex Kostenko, the Director of Strategy & Innovation at SCCU, believes that building an innovative organizational culture bridges floating ideas to implementations in reality. From SCCU's Organizational Health Index (OHI), Alex learned that advocating for the ideology of innovations in a firm isn’t enough to drive changes. Employees need a structured system with appropriate tools to be innovative, and IdeaScale provides a platform solution to connect culture to innovation and has helped SCCU increase the implementation rate by 40%. 

Alex Kostenko:

For me, innovation usually starts with culture. I think about culture and moments of action and reaction all day, because those two things tend to be the root of inaction, which is the barrier to innovation. And if you aren't willing to change, you never will. And so you can talk about innovation all day long, but it won't be authentic. It will never realize the outcomes that you want from it. Without that ability to understand what the barriers are that are in your way.

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Jessica Day:

Welcome everyone to our IdeaScale Nation podcast, where we're talking to change makers, innovation program leaders, futurists, and entrepreneurs. This month, we get the good fortune to talk to Alex Kostenko, who is the Director of Strategy & Innovation at Sunshine Coast Credit Union. So Sunshine Coast Credit Union is this full service cooperative financial institution. That's been serving over 17,000 members in British Columbia and Canada. Over the course of the past four years, Alex herself has grown into a strategic leadership role there at SCCU and she designs and implements these structures that create a culture of innovation throughout. She actually wrote her master's thesis on collaborative innovation and is bringing that research and her energy to bear on the work at Sunshine Coast Credit Union today. So we're excited to pick her brain for this podcast. Alex, welcome to the podcast.

Alex Kostenko:

Thanks so much, Jessica. I'm really excited to be here.

Jessica Day:

You said in the past that you sometimes surprise yourself by working in the financial sector. How did you end up as the Director of Strategy & Innovation at Sunshine Coast Credit Union?

Alex Kostenko:

Oh, thanks Jessica. It's, it's really been , um, a fun and surprising journey for me. Um, my journey to where I am today started back in college. I have a Bachelor of Arts in History because I thought I wanted to be a teacher. Uh , I really love research, learning about new cultures and events, and understanding how they affect or reflect our actions today. Um, and despite that love for History, I found out I didn't really want to be a teacher. So I ended up exploring the world of nonprofits for a while before I moved to the Sunshine Coast, which is where I started my career with Sunshine Coast Credit Union. And as the financial industry landscape changes, we realized that my skills in research History, Anthropology and Sociology, which are not traditional skills for financial institutions, could actually bring a lot of value with within the right role and with the right structure around it. And so that's why we designed the Director of Strategy & Innovation role to be a person who could harvest information about where the world is going, and at the same time harness our organization's energy to move in the right direction accordingly.

Jessica Day:

I love that! It's like this happy accident that all of your background in History and kind of research has informed what you're doing today. Was there any point where they discovered this like kind of super power that you had in their midst?

Alex Kostenko:

Um, I would say that it was really evolutionary. I was, I was always the person on the team who would hear about a problem going on and then just in, you know, spare moments would go and research to try and figure out, you know, where else is this happening? Um, what other industries is this going on? And , and how have they done something to change that? And then just kind of brought it back in conversation. And I think people suddenly realized that, oh, that's actually where Alex's skills and kind of her magic really lies. And so it was a very organic , um, growth of the role into something that we really realized could have huge advantages if it had its own capacity and authority to do those things, and it wasn't just off the corner of my desk. So I'm very fortunate to work in an organization where we can really recognize people's passions and skills and help form our organization around those at the same time.

Jessica Day:

Well, yeah, it's definitely the sign that you work for a good organization that they were able to recognize that. But I also think it's, it's really interesting too, that's the that's led to innovation, this skill and research because I, I feel like so much of innovation is actually about discovery and , um , I know it went up , people think about a lot about innovation in the financial sector in particular, a lot of the times they're thinking about technology, like what new FinTech solutions are out there, but what does the word innovation mean to you? And does it get beyond that?

Alex Kostenko:

Yeah, I couldn't agree more, Jessica. Um , innovation to me is about breaking down barriers. So sometimes technology is a tool for that purpose, but overwhelmingly the root of innovation is just doing something differently or approaching something with a different mindset to create different outcomes. Um , as a result for me, innovation usually starts with culture. I think about culture and moments of action and reaction all day because those two things tend to be the root of inaction, which is the barrier to innovation. And if you aren't willing to change, you never will. And so you can talk about innovation all day long, but it won't be authentic. It will never realize the outcomes that you want from it without that ability to understand what the barriers are that are in your way.

Jessica Day:

It's true. That so much of your story is one of culture transformation at SCCU. So especially because specifically you've empowered your credit union employees to get involved in the continuous improvement process, but you , you said that, you know, that was something that you've discovered a need for, how did you discover need?

Alex Kostenko:

So we knew that the financial institution kind of the olden days is changing and that we knew we needed to be ahead of that change if we wanted to be relevant and sustainable for the future. Um , we reside in a really rural community outside of the Vancouver area, which is a way from a lot of the day-to-day societal changes that drive broader shifts in financial institutions. Um, one example that I always love to use is , um, Uber. So I didn't use Uber for the first time until it had been, you know, publicly, widely available, you know, for two years because Vancouver didn't authorize it, but even more importantly, it wasn't available in rural communities. So the first time , uh, that I got to use Uber, I think I was in San Diego at a filing credit union conference. And it was so exciting. Um, and it was just so, so engaging for me to see how this works and all of a sudden your brain just kind of shifts until, well, what could we do with the same kind of principle on a financial institution, but until you're exposed to it, it's really challenging. And so that's something that we deal with in a rural community all the time is when you're not immersed in the evolution of society, um , it's really hard to connect yourself to it and therefore hard to kick your work to it. Uh , this is kind of what I call the the Pleasantville phenomenon in our community and by extension in our organization where the outside world doesn't really exist and can't change what we do. Uh , the challenge was, and kind of quantifying it, to what degree in our organization could we understand where specifically the gaps were in our operations and leadership practices that were driving this kind of , uh , evolutionary and innovation resistant culture. So we engaged with McKinsey to undertake their Organizational Health Index, which is a survey that quantifies and measures organizational health and by extension organizational culture. So what we found through that survey was really validating. We always wondered why innovation felt like a dead weight. Uh , overwhelmingly our employees told us through the survey that they didn't have the structure or the tools to be innovative. So it was dead last in our ranking of management practices. Um, and that was, that was a really humbling moment for us where, you know, we've been talking about being innovative for so long , um, that we were really wondering, was it us? Is there something that we aren't connecting? And yes, it was, we were, we were very much in our employees way because we hadn't created or provided them with the tools to be innovative. And so that really gave us the impetus to create a new initiative branded better every day, which was really an initiative around continuous improvement to create, buy in and ownership for making our organization better for our employees and members. So by framing engagement and innovation, through that lens, it felt much more natural for everyone. And IdeaScale was a huge cornerstone of this project because it gave our employees that essential structure and tool to share, discuss, vote, and track their ideas. And then it really became self-fulfilling . If one person saw an idea happened from start to finish, they could feel brave enough to share their own and leadership buy-in was so essential for this. So our CEO and other executives made engagement in this platform a priority. So that employees really felt like it was a channel where they could connect and be seen by our executives so that they really got that daily validation.

Jessica Day:

I mean, I think that it's a really great thing that your executives are so bought into this. I think a lot of the time leadership looks at a survey result, like what you got with the McKinsey OHI assessment and they, they don't take action or , or they think , um , you know, that, that that's not their problem or they have other things on their desk, but they took action in this case and they've been actively involved. So , um, what sort of ideas have you been collecting and what sort of results have you seen?

Alex Kostenko:

Yeah, so our first kind of big initiative was a very reflective of the better everyday branding. So it was an open channel where any idea that you had to make our organization better every day for our members or employees could go into that channel. And we saw just overwhelming usage at the start. We just really saw complete evidence of this backlog of ideas that our employees had. Um , so we saw ideas everywhere from different , um , product facets that we could use to enrich , um, you know, different term deposits or things like that. They finally had an outlet for the feedback that they were getting from members to be able to put it in a place where it could be handled effectively. Uh , we saw lots of ideas around , um, kind of increasing and enriching our culture , um, increasing connections , uh , and actually a lot of the ideas that came out of that bucket of ideas has helped us bridge some of the challenges that have surfaced through COVID-19. So how do we get people to connect better across branches while we use different , um , tools like Microsoft Teams and making sure that everyone had a profile photo set up with their email accounts and things like that. So those are things that have either been implemented or are being implemented, and we're just seeing really exponential results from that. But most importantly , um , we did our OHI survey again after having implemented IdeaScale and having, you know, the better every day initiative under our belt for a couple of months. And innovation went from being our worst rated management practice to our top score in less than a year. And so what that meant to us was that employees really understood their ability to be innovative, and they felt like it was part of their role. So as a result of that, we saw a huge increase in our ability to implement new tools and programs. We probably increased our rate of implementations in 2019 by about 40%. So once people felt like the change that was coming at them, the new project, products and projects and tools that were coming at them were a result of their engagement and their desire to improve our credit union. Once we kind of had that meet in the middle piece that was facilitated by idea of scale and innovation, there was so much more buy-in and so much more ability to kind of get people on the bus and excited about what we were doing. So it really has been a super positive and engaging journey for everyone involved.

Jessica Day:

I think it's great that your employees are sort of also the advocates for all of your members. You know, they, they, they are the voice for that feedback, but they also have an understanding of how things work behind the desk. And so can give really meaningful feedback to you guys, as long as you're willing to implement it, that 40% implementation rate improvement is a really great stat too .

Alex Kostenko:

Yeah, we're really incredibly proud of that. And it really is a unique credit union employee facet that they really are just such deep caring people for our members and they really want to do what's best in there . They're just such an amazing conduit for us to communicate with our members and to hear from our members , uh , in a really great way. So it's, it's a really wonderful advantage for us.

Jessica Day:

Let's talk about some of the other research that you've conducted in your time. Uh , you said that there is a research paper on the subject of credit unions that found young people think of credit unions as the banking system of their grandparents. How are you transforming your member perceptions of credit unions in this way?

Alex Kostenko:

Yeah, it's so challenging. Um, because credit unions are each individual businesses, but they are part of a system. And so there's a societal perception of credit unions at kind of at large, but as part of that system, and then there's the real world kind of , um, member to credit union perception and they're very different and that's really what makes it challenging to transform that perception. So I think societally credit unions are seen as this old fashioned financial institution , um, particularly because they tended to be , um, uh , kind of fast followers for the most part, but sometimes slow followers have a lot of technology revolution that happened , um , throughout the early to kind of mid two thousands. And I think we're , we're coming out of that. And they're really amazing examples of credit unions in Canada and in the U.S. being the most cutting edge in technology and service with regards to financial , uh, industry service. But it's a really big hill to climb because once society has slotted you on a shelf with activities like going to the dentist in terms of how much they enjoy engaging with you , um , it's really hard to get out of that. Um, but the real world perception. So the perception of our members and other credit unions members, the people who we serve and support couldn't be more different. Um, so I liken it a lot to what I thought when I started working for our credit union. So I went from having zero knowledge about credit unions to thinking why in the world isn't everyone just shouting about these from the rooftop, like these are financial institutions that can give you such incredibly customized solutions and really go out of their way to help support their members and their communities. Once you've been converted, you'll never go elsewhere, but that conversion is really challenging because there is so much historical baggage and emerging competition for credit unions to overcome.

Jessica Day:

That makes a lot of sense. And it also makes a lot of sense in the context of what the culture is like there for your employees. I mean, I think engagement is not a given on the subject of innovation. Ideas are not something that are always readily shared, but it sounds like your employees want to be a part of that. And I think that's largely because credit unions are sort of a mission driven organization. So people feel personally aligned to why they would want to participate in the process.

Alex Kostenko:

Absolutely. Yeah, it truly is a value-based organization. And for us, that's really made it , um, an amazing ability to find the right people for working in credit unions. Um, because you, you have to be a certain kind of person in order to want to work for them. So it's almost like you've, you've cleared a hurdle already.

Jessica Day:

So one of the other things that you've talked about with innovation is that sometimes it means balancing , uh, not just the vision for what you want, but balancing that against what you're willing to risk or to give up. Can you tell me a story that illustrates that kind of choice?

Alex Kostenko:

Oh, absolutely. Um, so at Sunshine Coast Credit Union, we are part of a lot of collaborations as an organization. So when you're a small credit union, you need to partner up with your credit union partners, your credit union sisters, and get together to share or build something that you couldn't necessarily do on your own , um , to achieve the scale and scope, to get the things that you need to deliver for your members. Uh , so one of the first things that we always do in these collaborations is articulate our desired outcomes. So why are we coming together? And can we all agree on what we want? So normally you just move forward from there. We know what we all want. We're good to go, but the most successful collaborations that we've been part of take the time to articulate what they don't want. So what we don't want to sacrifice, or we don't want to give up. And if we find that our list of what we don't want outweighs or negates the value of what we do want, we know it'll never go anywhere. And so we know we need to put in the work upfront to refine that list and dig into the risk tolerance of the why. So why don't you want to sacrifice or give up, why? What piece of misalignment do we have within the group , uh, is going to eventually rear its ugly head if you don't deal with it upfront . So being able to honestly own up to what you aren't able or willing to risk in the pursuit of innovation will tell you more about your capacity to innovate than what your vision is itself.

Jessica Day:

Interesting. Do you have any examples of where the risks are ? What you didn't want? Like what the particular problem was?

Alex Kostenko:

Oh yeah, definitely. Do I won't name the project or name any anyone involved, but we did have a collaboration that got together. Um, the goals were amazing. They were , um , big, audacious, really exciting and innovative goals. Um, but the functional process of getting us to the place where we could deliver on the final product and have it fully integrated in every credit union was really muddled by the individual risk tolerance of each credit union involved. So if each credit union had a different no-go, then that meant we had to meet nine different, no-goes before we could have a yes. And sometimes those no-goes where drastically opposed to each other. So to use a very simple example, someone wants the landing page blue. Someone wants the landing page pink. The very simplistic example, but what it ends up doing is it ends up completely frustrating your innovation process. If you spend all of your time between conceptualization to delivery on kind of battling out all of these little pieces of uncommonality between your wants and desires for your credit union. And so the best thing to do in those processes is kind of come back and find where are we common on and what is the weight of the things that we don't agree on? And can we leapfrog over those? Can we, are they surmountable to what degrees do we need to have this customization? Is it worth under my ending , the end goal at the end of the day.

Jessica Day:

Right, then you end up talking a lot more about what you disagree about that sometimes than what you do agree about. So you've got to bring it back to that too. Um , I was wondering about some of those leaders we talked about before, are there any leaders at your organization in particular who have allowed you to supercharge your innovation program?

Alex Kostenko:

Oh, absolutely. First and foremost is our CEO Shelley McDade . So she really understood the value of cultivating and encouraging innovation and made it a big part of her role. She knew that if people could be innovative and open to new ideas and be engaged in the development and implementation of new ideas, that it would make our organization's transformation go much faster and be much more productive and engaging for employees. And I think having people just in general, across your organization, who are those, why-not people is so important, those people who hear an idea and just go, "Hey, yeah. Why not? Like let's, let's work it out." Those people are so important because they help you get past that first hurdle of someone who thinks that their idea is crazy , um, and are kind of looking for an excuse to not do it. So finding people with the confidence and skill to be why-not people and pairing them up at the right time with the risk team eventually down the road really helped people to feel encouraged and comforted and knowing that they weren't , um, going out on a limb with their idea.

Jessica Day:

That's not always the case. You know, a lot of IdeaScale customers they'll come to us and they'll be trying to start this thing on their own, develop a first proof of concept and then bring the results from that to sell back up to their leadership. So it's really a gift that Shelley didn't need that convincing and that she started by leading from this position of possibility. Oftentimes it requires some sort of optimism to believe in innovation. So it's kind of wonderful that you guys already had that.

Alex Kostenko:

Yeah, we're very fortunate.

Jessica Day:

Um , well, you've got a great title, of course, the Director of Strategy & Innovation. Um, but is the innovation role, a common one at credit unions?

Alex Kostenko:

It's becoming more common across the credit union system. I think regardless of title , uh , I know that it is a function of every credit union that I know. Um, interestingly, I think it's been a big part of young leader programs, so programs where young or emerging leaders get together to support their own leadership growth. These really tend to be a hotbed of innovation and successful credit unions usually find a way to channel that into innovation, into something functional within the organization.

Jessica Day:

You've talked a lot about the role of an innovation hub. Um, well, not here yet, but on other interviews. Have you ever experienced one? Is that where you did some of the back-and-forth with your credit union sisters and brothers? Um, and then what, what have they been like this, these experiences so far?

Alex Kostenko:

I have, so I have experienced a lot of different innovation hubs. Um , I would say that the credit union innovation hub tends to take the form of a CUSO, a credit union service organization, which is typically where our collaborations go through. Um, we create these kinds of entities that we come together and we work on something , um, or produce something new for the credit union system. Uh, but functionally, when we think about innovation hubs more broadly outside of the credit union system , uh, it's really interesting to kind of rethink them right now because innovation hubs have always been about engagement through proximity. You know, you give the right people the right space and see what they come up with. Uh, but connection right now is so deliberate that a little bit of the magic gets lost. Um, I ran a testing kind of digital virtual hackathon a couple weeks ago with a colleague, and it was really great to see that it can be replicated. You can still replicate that kind of magic of throwing people together , um , at random and seeing what new ideas they come up with as a result. Uh, but building those and facilitating those kinds of connections to create innovation in a new digital way is going to be really important. And I think what's going to happen as a result of this slight pause and kind of re-navigating innovation hubs and how they operate is going to create just a slight pause for everyone, but then a massive uptick in activity once the digital aspect kind of hits it stride. Once we figure out how to make the digital aspect , um, work is going to be really amazing. And it's also going to make them so much more accessible to remote communities that might not have had access to typical innovation hubs in the past.

Jessica Day:

So is that what your vision is for the credit union innovation hub of the future or is there more to it as well?

Alex Kostenko:

That's definitely what's been rolling around in my head about how do we bring together the credit union system in a new way. So I think that right now we have such an opportunity to collaboratively design the future of credit unions. Um , when I talk about kind of bridging that perception gap of credit unions being old fashioned, there's never been a better time to change that. But to do that, we have to actively engage across our industry, even though we're all different, we're all individual businesses, we serve different markets, we are all credit unions and only by making some of those decisions together, will we change that broad societal perception and I'd love nothing more than to see our system volunteer a few dozen emerging leaders and have them cobell the vision and structure of a new credit union system that makes us the first choice of financial institutions for Canadians. And I really see , um, an incredibly robust digital solution and digital possibility for that, so that we aren't just focusing on, you know, the Vancouver area or the Toronto area, but that we truly are creating a new proposition of credit unions across Canada.

Jessica Day:

Well, maybe as a final question, do you have any advice that you would give to some of these emerging innovation leaders at other credit unions in Canada and beyond?

Alex Kostenko:

Oh, my first piece of advice would be to become the why-not person. There's so many we shouldn't or we've-always-done-it-that-way people. The world doesn't need any more of them. Um, so become a why-not person and be that person who is the fundamental cheerleader of trying new things out. You don't always have to be the person with the bright idea. You don't always have to be the person who is constantly creating, but if you can be the person who supports and encourages and helps those who do at the right time, that is just as meaningful, if not more. And I've found in my career that that's the one thing that has really, really connected me with the right people and helped me think in the most productive and positive ways is being that why not person and exploring what is possible instead of thinking about why it can't be possible.

Jessica Day:

Makes so much sense. One of our other guests on this podcast said that innovation is an inherently, a social activity, you know, you and our idea arrives and it arrives with whoever suggested it, but it also arrives with the team of people that have become advocates and are standing behind that idea too. And those are all the why-not people.

Alex Kostenko:

Yeah, it absolutely is. And it's such an expression of care and passion and , um, you know, love for what you do that. I think it can't help, but , um , but be something that is such a positive outlet for people.

Jessica Day:

Well, those were all of the questions that I had for you, Alex, and you answered them all beautifully. It's really cool. It's really cool to hear the work you're doing. I love how empowered your employees feel. I'm sure that that is impacting your members. Um, thank you so much for taking the time to talk to us today.

Alex Kostenko:

Thank you, Jessica. I've had a great time. It is always a pleasure to talk to anyone from the IdeaScale team.