Six Sigma across six states

How designing a new operating rhythm and framework resulted in a 50 per cent improvement in key process turnaround time

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Dan O’Neill

Kangaroos fighting on grass @davidclode

Australia has thousands of miles of golden soft sand beaches, coral reefs that transform you to a different world and just for good measure, food that makes you want to forget every diet conceived. As with every plus, however, nature has included some of the world’s deadliest animals: it’s amazing how, after many years, you begin to normalise the sighting of spiders the size of your hand or sharks aimlessly swimming past.

Hidden inside of all this incredible scenery and forbidding nature lurks an even more dangerous challenge to mankind, the significant inefficiency of rules, standards and regulations each of the six states and territories have entrenched into the Australian legislative environment.

Australian sport is just one way to understand the psyche of competition between states, particularly the ‘State of Origin’ rugby league contest that is admired globally with over 91 countries televising the three-game series. However, when this battle creeps over, with each state setting their own rules, standards and regulations, the contest frustrates the day-to-day lives of its citizens. Even the act of moving from state to state is shrouded with additional complexity and it severely impacts the productivity of companies trying to provide national coverage.

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Many interstate inconsistencies still occur today and none can be felt greater than that of conflicting car registration systems and the numerous residential real estate rules. From a personal perspective, I experienced this first hand when I moved my family from Perth to Sydney in 2013 when I was appointed General Manager of Lending Services for Australia’s largest bank. I soon found out that the personal experiences I was trying to overcome when moving were nothing compared to the challenge I would face when tasked with consolidating all the lending processing and settlement teams across retail, business, corporate and institutional into one national division. Once that was complete, I still needed to merge the back-offices of the two brands it maintained in Australia. With over 2,000 people and six different sites, it was an enormous challenge I couldn’t turn down.

It didn’t take long for the underlying problems to raise their heads. The first hint revealing this was more than just an efficiency challenge appeared in the first day when introduced myself to each of my indirect reports to get their vibe on the current environment.

One of the most memorable calls I had was with a manager in one of the states who, when asked how their day was going, answered that they would soon be finishing up as all their processing was completed for the day. “That’s great,” I said, and then asked innocently: “so how do you help out other states that might have any backlog?”

After what seemed to be a muffled laugh they replied, “If the other states are struggling that’s their issue. We look after our customers in Queensland, not in New South Wales.”

I was stunned. As I progressed with my calls to both staff and stakeholders it was clear that the focus on the customer had been deprioritized by the competition between state teams. I soon discovered that each state team had their own version of ‘best practice’ for both local and national processes and sharing knowledge or insights with other states didn’t seem to be in anyone's thought process. The terminology used in each state was different and the interpretation and measurement of data, albeit from the same systems, became an art form for the different workforce and reporting teams. To be clear, it was impossible for me to understand what actual volumes we were managing on a day-to-day business and success seemed to be measured by the number of stakeholders ringing up and complaining.

It was time to change.

To resolve these challenges we established a national ‘way of working’ by designing a new operating rhythm and framework resulting in a 50 per cent improvement in turnaround time in key processes, a significant reduction in operating losses and the creation of national teams that managed multiple states and brands. This was prior to the implementation of RPA, workflow and automated tools we introduced at a later stage to deliver additional benefits.

The four step approach we took included:


Introducing four productivity habits

Utilizing our lean practitioners we trained all staff and managers on the core tools of Six Sigma including the Five Whys and PDCA. Each team designed and established a Visual Management Board (VMB) and ‘huddle’ each morning. An afternoon huddle was also introduced for teams dealing with significant volumes and high profile tasks. The daily huddle included all staff so they could discuss and agree on the incoming and outgoing targets for the day and discuss workloads and quick wins. Weekly, the huddle would be expanded to include continuous improvement ideas and track actions. A new module to help identify and monitor risks and controls in their area of responsibility was also introduced later on.

Single taxonomy and data standards

Many assumptions and customer frustrations were created by the miscommunication of progress, application status and poor workforce planning. A single set of data and reporting standards was created and the numerous reporting teams were consolidated into a single virtual team enabling the larger sites to have their reporting support teams on-hand so they could learn and appreciate how the processes and tasks actually worked. This embedded more pragmatic and realistic reporting and workforce planning outcomes.

Reset targets from tasks to outcomes

Productivity measures were not new to the team, there already was a deeply embedded culture of measuring the number of tasks each staff member actioned each day, however, we soon realised that there was high evidence of gaming the system with staff members ignoring the difficult tasks or worse, rejecting the tasks and sending them backwards by asking for more information. Managers were trained on the benefits of measuring customer outputs vs staff actions and coached on leading teams and managing difficult conversations.

Communicated national statistics and state best practices

Consolidating the retail, corporate, business and institutional lending processing teams was always going to be challenging. The surprise ingredient of resolving the additional complexity of state-based rivalry was an extra test. Immediately we rebranded the name of the newly created division to a Group brand and set-up regular town-halls in addition to breakfast and lunch sessions in each location explaining the national goals, challenges and vision. Weekly reporting within teams included the national statistics and customer stories from each state of how we were making a difference, together.


It starts with a vision

Within a year the team reinvented itself as a national unit with teams cross-training and supporting multiple states and brands, a first for the group. The success of the team and the approach we took inspired the group to create the role of Chief Process Officer that had the task of establishing a group-wide taxonomy and process governance framework for the entire bank.

And how did it all pan out? That's a story for another time.