Week Two Learning Log - Sections One and Two: Capability Audit and Audit Analysis

Section One:  Capability Audit completed and included in the learning log.

Capability Audit of Generic Capabilities

How effectively do we currently perform on each of the following 13 capabilities?	How effective Currently (1=low, 5=high) 1    2    3    4    5	2-3 Most critical (check which)
Talent: We are good at attracting, motivating, and retaining competent and committed people.	4
Speed: We are good at doing things fast, with agility, adaptability flexibility, cycle times, and responsiveness.	3
Shared mindset: We are good at managing or changing our culture, which may involve doing transformation of firm identity firm equity, firm brand, shared agenda.	3
Learning: We are good at generating and generalizing ideas with impact through knowledge management and sharing best practices.	4
Collaboration: We are good at teamwork, working across boundaries, doing merger integration, and sharing information.	5
Innovation: We are good at administrative, product, channel, or strategic innovation.	3
Accountability: We are good at establishing rigorous performance principles that set clear performance expectations and hold people accountable for results.	5	X
Leadership: We are good at building leadership depth through the company and embedding leaders at all levels who build confidence in the future.	4
Strategic unity: We are good at articulating and sharing a strategic point of view, a strategic agenda, and shared strategic priorities.	4
Efficiency: We are good at reducing costs without affecting quality through redesign, reengineering, or restructuring.	3
Customer connectivity: We are good at customer relationships with a customer-focused organization and customer intimacy.	4	X
Social responsibility: We demonstrate good corporate citizenships by managing our carbon footprint, philanthropy, and values.	5
Risk: We are good at managing risk by attending to disruption, unpredictability, and variance.	4	X

I conducted this capability audit to the Loss Prevention Unit within a credit union.

Section Two:  Audit Analysis

An analysis of the Capability Audit I conducted resulted in some interesting discoveries. There were certainly a few things that stood out as best practices in my department.  This appears to be common as investors seldom look for an organization which is above average in every area; conversely, they analyze how well the organization’s distinct identity aligns with its strategy (Ulrich, Brockbank, Younger & Ulrich, 2012).    Because I work for the loss prevention area, we are responsible for a myriad of activities.  These include compliance work, fraudulent activity (including check, debit and credit card fraud), collections, and legal work.  There is a significant amount of recording of related data, reserving for potential losses, and actual dollar impacts when the decision is made to charge something off. 

We rated very high on accountability.  Each person in this five person area has distinct responsibilities, reports, and detailed goals.  They are reviewed monthly and the progress toward these annual goals is updated, and rated on a scale of 1-5.  Issues are noted and addressed, and there is little ambiguity about who does tasks.  Some are rotated among the team members monthly, and everyone gets a part in learning part of the other teammates' primary responsibilities to reduce risk of knowledge sitting with one person only.  Because we are audited annually by both the NCUA (required) and our private accounting firm (which is voluntary), the risks are well known and documented.  Anything found in the audits are addressed immediately and detailed follow-up actions are done.  Procedures are reviewed by both team members and management on regular basis. 
While there had been some issues with turnover on the team in the past, for the past nearly two years there has been consistency.  With the exact same team members over time, our delinquency ratio has improved as well as the recoveries on charged-off debts.  That is a result of customer connectivity.  Working closely with our members, a lot of the times we can come to arrangements or work out a solution through legal means.  We need to listen why they are in the situation they are in, and come up with solutions to help them get back on track.

The audit highlighted some important areas my team is good at.  However, it did the same for areas needing improvement, specifically speed.  I don’t see us as being the most efficient area.  There is significant wasted time on items and tasks that have little impact or value.

I found the audit useful and interesting, and am considering sharing it with my manager as the compliance officer of the corporation.

Ulrich, D., Brockbank, W., Younger, J., & Ulrich, M. (2012). HR from the Outside in: Six Competencies for the Future of Human Resources. The McGraw-Hill Company.