Nothing Like It In The World

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Process Improvement: Nothing Like It In The World

In his book recounting the building of the transcontinental railroad, author Stephen Ambrose gives a compelling example of the cost of waiting until the end of the line to improve processes. 
For the financial industry, it was an opportune time to improve loan delivery processes when the number of loan transactions dropped following the financial crisis. 
Now that volumes have returned, many banks and credit unions continue the long-suffering frustrations that accompany cumbersome loan origination, approval, and closing processes. 
Compounding the issue are the rest of the Dirty Dozen processes that are in desperate need of improvement.

Two reasons can explain why we suffer.

Once again we are too busy to make meaningful change with the skeletal staff that remain.  
Skeletal from fat-trimming, over-worked, or under-skilled is a different topic. 

Secondly, we are comfortable with our slow, clunky, and manual processes. 
The inertia is too much to overcome. 

In the 1860’s the railroads faced a similar situation and left money on the table. 
Let’s learn from history.

The country wanted a railroad to connect the east to the west as bad as lenders want a process to connect the credit memorandum to the loan documents without rekeying. 
Traveling cross-country by wagon or around South America by ship was slow, dangerous, and expensive. 
To incent the building of the railroad, Congress encouraged speed by paying by the mile of track laid plus giving land grants along the route. 
Additionally, due to the increased costs of blasting tunnels and the resulting slower pace, more was paid for track in mountainous regions ($48,000) and foothills ($32,000) than the plains ($16,000). 
The bottom line was whoever could lay track faster got more money. 
No different than whoever can close loans faster gets more money. 
Dare I say Rocket Mortgage&trade.

The first two big American businesses, the Central Pacific (CP) heading east from Sacramento and the Union Pacific (UP) heading west from Omaha, laid on average 1 to 2 miles of track per day on flat land. 
As the two lines were converging near Ogden, Utah, an all-out race began to get there first. 
Although each had years of experience laying mile after mile of track since 1864, it wasn’t until 1868 that the UP laid four and half miles of track in a single day. 
No process reengineering. Just pure sweat, muscle and the promise of whiskey. 
Not to be outdone, the CP encouraged their men and laid six miles and a few feet in a single day. 
Seeing their record broken, the UP, working from 3 a.m. to midnight, laid eight miles in that longest of days in 1868.

In early 1869, now out of the Sierra Nevada, the CP was laying down 3 and 4 miles per day using traditional processes.
Charles Crocker, head of the CP’s construction company, had reengineered the entire process in his mind after the UP’s record-breaking eight-mile day in 1868 but chose not to implement it until
the two lines were close enough that the UP didn’t have enough room to outdo him. 
With a completely reengineered track laying process, the CP laid down 10 miles of track between daybreak and 7 p.m. 
Quality didn’t suffer as proven by a locomotive running over the newly laid tracks at forty miles per hour. 

10 miles of track laid in a single day on April 27, 1869! 

How was this feat accomplished? 
It turns out that Charlie Crocker used some of the same principles that Agile Banking uses when reengineering banking processes for high performance.

Process Oriented

  • Look at the entire process
  • Cut across organizational boundaries


  • Aim for dramatic breakthroughs
  • Minor improvements are not sufficient


  • Deliberately abandon assumptions
  • Question specialization, sequencing, timing

Creative use of information technology

  • Viewed in terms of possibilities, not limitations

Expecting accolades, Charlie was disappointed to be chided by Collis Huntington, the head of the CP, in a letter stating

“I notice by the papers, that there was ten miles of track laid in one day on the Central Pacific, which was really a great feat,
the more particular when we consider that it was done after the necessity for its being done had passed.” 

For you see, Charlie implemented his reengineered process when the CP had only fourteen miles to go and the UP nine.

Don’t wait until it’s too late to improve your processes. 
That's no way to run a railroad.