In 2005, Hurricane Katrina unleashed unprecedented devastation on the Gulf Coast. Homes and businesses were destroyed, lives were shattered, and the long road to recovery seemed impossibly daunting. The Small Business Administration (SBA), the federal agency responsible for providing disaster recovery loans, was thrust into the center of the storm – and quickly became overwhelmed.
Hundreds of thousands of loan applications poured in, far exceeding the agency’s capacity. Disaster victims, desperate for assistance, faced agonizingly long wait times. Employees, working tirelessly under immense pressure, were demoralized. Public trust in the SBA plummeted, and the agency faced intense scrutiny from the media and Congress. The situation was, by any measure, a crisis.
When Steve Preston took the helm as the new SBA Administrator, he faced a seemingly insurmountable challenge. He could have brought in an army of consultants, implemented a complex new technology system, or issued a series of top-down directives. Instead, he made a crucial decision: he chose to trust the people who knew the system best – the SBA’s own employees.
The Crisis at the SBA—Drowning in Applications, Lost in the System
The aftermath of Hurricane Katrina exposed deep-seated problems within the SBA’s disaster loan process. The sheer volume of applications was unprecedented, but the challenges went far beyond just numbers.
- Outdated Systems: The agency relied on outdated technology and paper-based processes that were simply not equipped to handle the scale of the disaster.
- Siloed Departments: Different departments within the SBA operated in isolation, leading to communication breakdowns, redundant steps, and a lack of coordination.
- Lack of Ownership: As one loan-processing supervisor, Elsie, put it: “We were operating like an assembly line—everyone focused on their task, no one seeing the whole picture. No wonder disaster victims felt lost in our system.”
- Low Morale: Employees were overworked, overwhelmed, and feeling increasingly disconnected from the agency’s mission.
The result was a backlog of over 160,000 unprocessed loan applications, unacceptable wait times for disaster victims, and a crisis of confidence in the SBA’s ability to fulfill its vital role.
A Different Approach: Trusting the People, Transforming the Process
Faced with this daunting situation, Steve Preston recognized that a traditional, top-down approach would not be enough. He understood that the people who were closest to the problem – the frontline employees processing the loans, interacting with disaster victims, and navigating the flawed system every day – held the key to finding solutions.
His approach was guided by a fundamental belief: that the vast majority of the best ideas for improving an organization already reside within that organization, in the minds of its employees. The challenge was to unlock those ideas and empower employees to act on them.
This wasn’t about simply asking for suggestions; it was about creating a system for employee-powered innovation. It was about fostering a culture of collaboration, ownership, and continuous improvement. It required a leap of faith, a willingness to trust the expertise and ingenuity of the workforce.
The Ideas-to-Action Process in Action
I was on a family vacation when I received the call from Steve Preston, outlining the crisis at the SBA and his belief that the employees held the key to a solution. He needed a way to unlock their potential – fast. I knew the Ideas-to-Action methodology could help, and the next day, I was on a plane to the SBA’s Disaster Loan-Processing Center in Fort Worth.
After two days of interviewing employees and leaders, the sheer scale of the challenge was clear. But so was the potential. We proposed a three-day transformation planning event, bringing together frontline staff and leadership. And, sitting right there at the table with them, ready to get started, was Steve Preston.
My team and I facilitated the process, but it was the ideas of SBA employees on the front lines and leadership commitment to empowering effective action that delivered immediate results. Applying the Ideas-to-Action principles cross-functional teams were brought together; the end-to-end process was mapped and analyzed for delays, waste, and bottlenecks. Solutions emerged quickly with those requiring no system or policy changes acted on immediately and others prioritized for business case creation. The most transformational innovations that emerged was the “disaster-loan case manager” role – a single point of contact for each applicant. This seemingly simple change had a profound impact on loan processing speed and disaster victim perceptions of the agency.
The “90-in-45” Campaign – A Bold Goal, Extraordinary Results
Inspired by the rapid progress and the growing sense of empowerment within the workforce, the SBA set an audacious goal: to disburse 90,000 approved disaster loans in just 45 days. This “90-in-45” campaign became a rallying cry for the entire organization, creating a sense of urgency and shared purpose.
The results were nothing short of extraordinary:
- Loan Production Doubled: The SBA dramatically increased its loan processing capacity.
- Wait Times Plummeted: The average wait time for loan approval was reduced from 74 days to just 16 days.
- Employee Morale Soared: Employees felt valued, empowered, and connected to the agency’s mission. The SBA went from being the lowest-ranked federal agency for employee morale to one of the highest.
- Millions Impacted: Most importantly, thousands of disaster victims received the financial assistance they desperately needed to rebuild their lives and businesses.
Lessons for Leaders – The Power of People and Process
The SBA’s transformation after Hurricane Katrina offers powerful lessons for leaders in any organization facing challenges, seeking innovation, or striving for greater efficiency:
- Trust Your Employees: Your employees are your greatest asset. They have the knowledge, experience, and insights to solve even the most complex problems.
- Effective Empowerment is Key: Give your employees the authority, resources, and support they need to take ownership and drive change on issues where their knowledge and creativity can make a difference.
- Process Matters: A structured method for capturing, evaluating, and implementing ideas is essential for success. The Ideas-to-Action Process provides that framework.
- Leadership Sets the Tone: Leaders must be visibly committed to employee empowerment by showing up and getting “their hands dirty.”
- Measure and Celebrate Results: Track daily progress daily, celebrate successes, and use data to continuously improve.
The SBA story is a testament to the transformative power of employee-powered innovation. It demonstrates that when you combine the right people with the right process, extraordinary results are possible.
Ready to unlock the hidden genius within your organization and achieve similar breakthroughs?
