Process intelligence for financial services

Six tenets of intelligent process improvement

Today after the courage of a no-sleep runner, ultra-marathons consist of athletes running days at a time without rest. In previous decades, runners thought it was impossible to run days at a time without sleep—they thought they 'knew' the right methodology to complete the race. In business process improvement today, some firms claim they 'know' which process improvement methodologies work, and they approach these methodologies the same as they have for decades. Others allow teams to pick and choose methodologies and tool-sets from among the various methodologies including Lean and Six Sigma. Yet despite those decades of history to learn from, financial services companies are still struggling to realize success from their process improvement efforts.

Applications in banking, insurance, and investment management

The Westfield Sydney to Melbourne Ultramarathon was first run in 1983. At a distance of 875 kilometers, it was going to be one of the most challenging ultramarathons in the world. Most entrants knew that to be competitive, they would need to run 18 hours each day, while sleeping only six hours.

A 61-year-old man named Cliff Young showed up to run the race wearing worn-down overalls and worn-in work boots. When asked if he had ever run in a marathon before, he replied, “See, I grew up on a farm where we couldn’t afford horses or tractors, and the whole time I was growing up, whenever the storms would roll in, I’d have to go out and round up the sheep. We had 2,000 sheep on 2,000 acres. Sometimes I would have to run those sheep for two or three days.” The runners all laughed. Young was clearly not up to the standard of these world-class athletes.

Amazingly, though, the 61-year-old underdog won the race, beating the record for similar races by 40 percent, or almost two full days! How was this possible? Young didn’t “know” what everyone else knew—that he had to sleep—so he just shuffled along each night at a slower pace while all of the pro runners dreamt soundly. His win catapulted him to fame in Australia—the race thereafter was named the Cliff Young six-day Australia Marathon—and launched a new era of ultramarathon running. Now that world-class runners “know” that it’s possible to run days at a time without sleep and that they can conserve energy by adopting an easy shuffle jog, they have a new way of approaching ultramarathons.

Business process improvement today is in a similar state as ultramarathons were before Young’s feat—people often “know” which process improvement methodologies work, and they approach those methodologies the same as they have for decades. Yet despite those decades of history to learn from, companies are still struggling to realize success from their process improvement efforts.

Why do some process improvement efforts succeed and others do not? This paper outlines six tenets to help financial services companies think beyond what is currently "known" and bring more "intelligence" to process improvement.

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Six tenets of process improvement

1. Challenge conventional wisdom

Many organizations are constrained by conventional wisdom, much like the world- class runners in Australia. For example, companies are moving away from Six Sigma as a methodology for Process Excellence because they feel their firm doesn’t have the necessary level and quality of data to effectively support a Six Sigma based approach. This may explain why the methodology has steadily declined since 20053. Instead, companies may take a flexible approach to process improvement, allowing teams to pick and choose methodologies and toolsets. But isn’t flexibility a good thing? Not necessarily.

2. Stretch beyond process mapping

Another commonly accepted practice is to use process mapping as the core tool in process improvement. Process mapping is an important tool, but it has limitations. Process maps show how people think a process typically works or how it should work. How the process actually works often is quite different.

3.  Follow the facts

There is typically no lack of opinions when it comes to business improvement efforts. But when teams act on opinions, they often jump to the wrong conclusion. A more “intelligent” approach is to convert opinions into hypotheses and test them with data before acting on them.

4. Buy runs, not players

In the movie Moneyball, a statistician suggests the following: “People who run ball clubs, they think in terms of buying players. Your goal shouldn’t be to buy players; your goal should be to buy wins. And in order to buy wins, you need to buy runs. Baseball thinking is medieval. They are asking all the wrong questions.” The same is true in process improvement.

5. Carry it across the goal line

In Super Bowl XXVII, the Dallas Cowboys’ #78, Leon Lett, recovered a fumble on the Dallas 35-yard line and ran it toward the end zone. At the 10-yard line, approaching the end zone, Lett slowed down and held the football out in celebration, unaware that an opponent was chasing him down from behind. The opponent knocked the ball out of Lett’s outstretched hand just before he crossed the goal line, sending the ball through the end zone and costing the Cowboys a touchdown. In the absence of proactive leadership alignment and change management, process improvement teams can fumble before they cross the goal line, too.

6. Two heads are better than one

While training is essential for obtaining skills and knowledge, coaching and mentorship help people apply learning in the real world. Research of coaching effectiveness shows that a structured, proactive coaching approach where a schedule is followed leads to more successful project completion in comparison to an ad-hoc coaching approach.

Download the PDF to learn more about the six tenets, and check out our other perspectives on Process Intelligence, which draws upon time-tested techniques like Lean Six Sigma that are enhanced with proprietary analytical tools and deep experience to help clients make breakthrough improvements.

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