Achieving operational excellence in the financial sector

Michael Dove, VP center of process excellence at PSCU, talks about the strategies organizations should implement during the Covid-19 pandemic to drive efficiency and minimize costs without negatively impacting under-pressure customers

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Alice Clochet

Ahead of his session at OPEX in Financial Services Live, which takes place online on 21–23 July 2020, PEX Network caught up with Michael Dove, VP center of process excellence at US-based credit union service organization PSCU.

During the conversation, Dove shared his insights on the current state of operational excellence in the financial services sector and the impact of Covid-19 on the industry, as well as PSCU’s approach to lean internal development and his recommendations for organizations looking to start or advance their journey toward operational excellence.

PEX Network: Considering the impact of Covid-19, how would you define the current state of operational excellence in the financial services sector?

Michael Dove: Because of the unpredictable and unprecedented environment we are currently in, financial services are looking for ways to maintain their customer or member experience consistent, bring revenue and achieve efficient growth.

A drive for efficiency and keeping costs under control has been more important and doing this without negatively impacting customers or members that already have a lot of stress is key. Some innovators will use this environment to exploit weakness in the industry but most companies need to find better ways to operate.

PEX Network: How have operational excellence professionals in the financial services had to adapt to the challenges brought on by Covid-19?

MD: For one, it has caused operational excellence professionals to find new ways to create strategies, research improvement opportunities, implement improvements and manage process control. Secondly, there is now more of a focus on improvements while managing risks and information security.

PEX Network: What is PSCU’s approach to lean internal development?

MD: PSCU has focused on a grassroots campaign by educating the front line employees on Lean Six Sigma. PSCU’s Center of Process Excellence (CPE) developed a belt training program starting with yellow belt in person and online, lean specialists and green belt. We require two projects to be completed before being certified as a lean specialist. We then use these resources as force multipliers, not only to encourage others to take the training, but to identify additional improvement ideas to assist the CPE team.

The CPE, made up of certified black belts and master black belts, focuses on cross-functional enterprise-wide initiatives where we encourage the use of lean techniques and process maturity assessments to set the foundations for leveraging Six Sigma tools in our continuous improvement journey.

PEX Network: What recommendations would you give to other financial services organizations who would like to start or advance in their operational excellence journey?

MD: They should focus on building a program that aligns with their company’s culture and values. Establishing a strong notion of WIFM (what is in it for me) is critical and it needs to be tied to the company’s strategy and metrics.

They should get a good understanding of their company’s operational maturity and, if they are lucky and have the support measurements systems, its process capabilities. They should also have a documented performance baseline that assists in sharing their wins, and should always remember where they were at the start of the journey to help them realize what they have achieved.

Regardless of how well they do with building a program that aligns with their company’s culture and values, there will be an extensive change management effort. If this is at all possible, they should get certified in in it – for example, PSCU leveraged the PROSCI model of ADKAR. They should not take this for granted as unrecognized resistance will slowly sap the energy out of the program until it dies.

They should make sure to have the right team to drive and support the program, not only through a solid foundation in operational excellence methodologies and skills, but also through strong relationship management or emotional intelligence.

PEX Network: What developments do you anticipate in the next few years in operational excellence in financial services?

MD: I anticipate the continued introduction of artificial intelligence tools such as robotic process automation and predictive analytics into the operational excellence toolbox.

I believe it may be time in the continued re-imagining of lean and Six Sigma methodologies, from TQM, lean, Six Sigma and Lean Six Sigma. It could be the same theories and tools but potentially with an updated name and the introduction of new tools.

Operational excellence in the virtual space and all things related to making working remotely effective, efficient and safe will become a new priority for operational and IT leaders.