Case study - National Australia Bank
Delivering significant performance gains in the customer services and operations division of a major financial organisation
National Australia Bank (NAB) is an international financial services organisation that provides a comprehensive and integrated range of financial products and services.
NAB implemented Active Operations Management in its Customer Services & Operations division between January 2003 and September 2004. The programme was delivered to 1,500 Full Time Equivalent (FTE) operations staff initially, climbing to 2,500 FTE. Using a train-the-trainer model, NAB rolled out improved training to team leaders and departmental managers.
Major performance gains were achieved:
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Critical improvements in forecasting - accuracy increased from 60% to 95%. |
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Greater accuracy - reworking cut by 50%. |
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With little IT or process change, the first NAB sites achieved a 34% productivity improvement. |
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Return on investment achieved for the entire project in under 9 months. |
Initial situation: January 2003
NAB's aim was to make its operations world-class: a core competitive strength. Operations management, however, had never been emphasised as a core skill in the organisation, and managers needed support. Operations management needed to be overhauled from selection and training to management methods, capability and tools.
Preparations: November 2003 - February 2004
NAB identified Active Operations Management as its preferred method. A joint team of NAB staff and external consultants managed a roll-out of Active Operations Management to ~1500 operations FTE. Following this initial project, NAB's internal team became a sustainable center of expertise.
NAB built its foundations for success with some key building blocks:
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A 'Head of Manufacturing' to drive improvement. |
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New systems to replace multiple legacy systems that were ineffective and incompatible. |
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Committing to cultural change - 'making operations a place people wanted to work'. |
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Defining a preferred working method: Active Operations Management. |
Targets
The business case required the implementation to deliver:
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Cost savings of 8-10% across the teams involved. |
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Productivity variation stabilised to less than 3%. |
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Multi-skilling needs identified and delivered to help teams share resource. |
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Support for NAB's overall operations transformation. |
Actions undertaken: March 2004 - September 2004
The joint team rolled out the implementation step by step:
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Train the trainer programme. |
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Roll out of training (in 6 months, to over 100 team leaders). |
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Consolidate and improve over the entire target area. |
Factors that enabled delivery
The differentiating factors that enabled NAB to achieve their aims were:
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Building internal capability to maintain learning. AOM's and NAB's roll-out approach enabled NAB internal trainers to deliver the majority of the training. |
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Achieving internal ownership and independence. NAB's own 'Active Operations Management Expert' intranet site lets managers raise questions and share advice with one another. Active Operations Management has become part of the ongoing leadership skills training and development in the organisation. |
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Using Workware™ software to support process change. Data is fed from Workware to identify the impact of process change. "[W]e can step into a process and look at what drives quality, time and process activities for each step." |
Results achieved
The results achieved exceeded expectations:
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Productivity achieved by Customer Services and Operations division prior to implementation in March 2004: 76%. Productivity achieved by division in December 2004: 102%. |
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Operations increased work handled by 34% in under one year. |
The Head of Manufacturing commented on these results ...
 Team leaders are now really thinking about performance and managing individual differences, coaching lower performers. It's really moving.
Our managers have a real sense of things dropping into place... We're having planning meetings covering the whole of CS&O... We can now ...link customer demand for services all the way through to financial forecasts. This ...really is adding significant value.
Key learning points
The key points NAB took forward to its next phase of implementation of AOM were:
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The benefit of including senior management in operations management training. |
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The advantage achieved by having a clearly designated internal programme owner. |
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The need to have contingency and seniority in implementers. |
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The need to manage any personnel issues with job role descriptions. |
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The benefit of implementing Active Operations Management first, process change after. |
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The importance of planning ahead to realise the gain. |
The Head of Manufacturing said:
Everybody equated productivity growth with cost reduction. We had to be clear with people that cost change still had to be achieved: we still had to 'cash the cheque.'
Conclusion
34% productivity improvement; a transformation in the role of operations inside the business; the foundation of operations management now being strong.
The Head of Manufacturing said:
The basic question has always been the same: 'how many people do I need to work in my centre next Thursday?' That comes down to two things: how much work is coming in, and what we can do. We can now forecast very accurately how much work will come in, and we can now calculate what we can do. It's a fundamental change in the philosophy of how the business runs - and it works.
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Liverpool Victoria Friendly Society
Transforming the customer contact division of a financial service mutual.
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