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.
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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.
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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.
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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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2
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Roll out of training (in 6 months, to
over 100 team leaders).
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3
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Consolidate and improve over the entire
target area.
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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."
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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.
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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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4
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The need to manage any personnel issues
with job role descriptions.
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5
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The benefit of implementing Active
Operations Management first, process change after.
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6
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The importance of planning ahead to
realise the gain.
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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.
Other case studies
 EDS Credit Services
Improving operational delivery in
mortgage administration.
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