Operational Excellence BoardThe Operational Excellence Board is a self-selected private forum of business improvement leaders from companies operating in different UK and European service industry sectors, but with a primary focus on Financial Services.Personal invitations are extended to senior executives who have an interest in Six Sigma and Lean and in sharing best practice in these and other process improvement methods on a completely confidential basis with their industry peers. The Operational Excellence Board is a non-commercial venture managed on behalf of the group’s Members and is entirely free from all vendors selling their “wares”. Most other groups in this field meet as part of a seminar, conference or other body organised commercially. These are therefore usually sponsored by entities whose primary interest is in promoting their products and services. They also tend to attract participants at less senior management levels. The Board’s aim is to create Europe’s leading Think Tank for senior management in this field. The objective is to hold private, invitation-only, meetings, where fellow leaders can exchange information, seek each other's opinions, and share their experiences confidentially without the prospect of consultants or others pouncing on them with “solutions”. These invitations are strictly personal and may not be delegated to lower management. The Board events will be discussion-based rather than “death by PowerPoint presentation”. Each discussion will be led by a senior industry practitioner, who will first very briefly present his views and issues and then open the subject for group discussion. Board meetings will thus be restricted to a relatively small number of participants in order to allow for proper dialogue and detailed discussion of each topic. Equally, the size of the meeting will enable other matters to be debated as they arise, so that Members can also bring their own issues and views into the conversation. Each meeting will also provide the opportunity for private networking amongst the Members. Ultimately, though, since the Board exists solely for the benefit of its Members, the Members will determine how the meetings will be run. If you are interested in receiving an invitation to become a Member of the Board or for further details, please contact Alan Noble, Managing Director, on  alan.noble@venturehaus.com
February Operational Excellence Board debates whether it is possible to achieve Operational Excellence, sound risk management, and regulatory compliance at the same time London, 21st February 2008 The popular view is that Operational Excellence, risk management and regulatory compliance are, to an extent, mutually exclusive. The objectives behind each prevent the others being achieved…except by luck, don’t they? In an increasingly volatile world of regulatory revolution, sub-prime turbulence and the spectre of bank rescue through sovereign investments or more direct forms of state intervention, this topical meeting of the Operational Excellence Board produced intriguing observations on how to deliver on all three targets simultaneously without running the risk of compromising the requirements of any of them. Our guest speaker, Alan Craft, opened the discussions with a summary of his research with a number of major institutions and market participants, and his findings that leading firms have achieved it without huge cost and without dislocating their business The key to this is a clarity of focus and of accountability which allows organisational flexibility in shifting balance between the three goals when required. In his view, “Success comes most readily where there is clear alignment of the functions. There needs to be a balance between the interests and standing of those responsible for Operational Excellence, risk management, and regulatory compliance. This requires mutual understanding of requirements and sufficient training to make each aware of issues. The culture of the firm must underpin these elements by encouraging behaviours that consistently reinforce the alignment and mutual interest.” The Board then broke into discussion groups to tackle the issues surrounding governance, structure, communications and incentives. When discussing governance, it was clear that corporate culture plays a huge role in the challenge of managing risk. It was felt that currently there is often a mentality to fix issues as and when they occur, rather than to embed continuous improvement. A “hero culture” rewards fire-fighting perhaps more than fire prevention. The lack of clear accountability (or sometimes too many people with accountability for the same area!) can mean that “signals to noise” are often confused or limited. It is deemed necessary therefore to integrate the management of all financial and operational risk within business accountabilities, to achieve a common language and approach to risk management. The organisational structure also must be geared to fit the operational needs. This is especially necessary given the sheer scale of many of the institutions. Many organisations have a structure that is inherited and has evolved over time, with non-organic activities such as mergers and acquisitions affecting the framework. Ultimately specifically-responsible individuals need the self-awareness and inherent ability to improve, but they also need visibility of the entire end-to-end process across the business. Inadequate systems, poor people management and poor data all add up to poor output and low customer satisfaction, so it is necessary to take a much more holistic approach than is currently customary. The really contentious issues do seem to lie within lines of communication and behavioural incentives. While some individuals push risk management up the agenda for personal gain, others might take a more detached or delegated approach. There are many question marks over how all forms of risk management can be more closely integrated into the business, and how individuals and businesses with risk responsibilities can be better rewarded for “risk management” rather than “risk avoidance”. After all, the business of Financial Services is all about taking risks and successfully managing them. And recent news items have demonstrated that these risks can also not be avoided by just passing them on. The Board disbanded with perhaps a few more questions than answers but the meeting had provided a lot of food for thought, which will now help to inform a white paper on the subject, soon to be published by Venturehaus. I would like to thank Alan Craft for his insights and contribution to this meeting of the Board, and also all the other members of the Board who bravely prevailed against the obstacles of London’s public transport system on the day! The next meeting will take place in London on 20th May 2008. Alan Noble, Chairman, Operational Excellence Board Feb 2008 November Operational Excellence Board gives unparalleled insights into form versus substance in operational change London, 21st November 2007 The need to focus on tangible results to engage all levels of staff is of crucial importance to change management programmes within Financial Services, and yet there are hard lessons to learn and crucial pitfalls to avoid when evaluating the merits of form versus substance. For this reason, the November meeting of the Operational Excellence Board produced extremely lively debate, well led by our guest speaker Bruce Reekie, Head of Business Transformation at the Royal Bank of Scotland. The motions for debate were varied and topical. When addressing whether the majority of Service and Process Improvement activity is targeted at resolving internal requirements instead of improving the customer experience, it was generally agreed that this does in fact appear to be the truth in many cases – however, despite not being ideal, internal improvement does provide a good launching pad and can certainly help to gain the senior level support needed to take the initiative further into the customer domain. Secondly, the board discussed whether a lack of end-to-end process understanding and management represents a reckless disregard for our fiduciary responsibilities to manage risk at least as well as we manage commercial opportunities. The Board agreed with this motion directionally but also conceded that there was huge variability between organisations. Success and consistency in managing risk is of course THE hot topic in the current markets and the subject now of almost obsessive attention. We shall therefore pursue this theme even further when the Board meets again on 20th February 2008. Alan Noble, Chairman, Operational Excellence Board Nov 2007 Operational Excellence Board launches in Scotland London London, 4th June 2007 Venturehaus announces the official launch of the Operational Excellence Board in Scotland in response to considerable demand for an extension into Scotland of the forum which has been running very successfully in London for the last 3 years. Venturehaus announced today the official launch of the very successful Operational Excellence Board in Scotland, with the assistance of several major Scottish financial institutions. The Operational Excellence Board is a self-selected private forum of business improvement leaders from companies operating in different UK and European financial and other service industry sectors. Historically, it has focused on Financial Services and the current membership in this sector includes approximately 100 individuals from over 45 organisations, and is growing constantly. The inaugural meeting will be held at AEGON Scottish Equitable in Edinburgh on Wednesday 4th July 2007. During the morning, an Executive Briefing will be run by Venturehaus to introduce executives and senior managers with an interest in Process Improvement to a variety of methods and techniques which enable a business rapidly to improve its operational and service performance. This interactive session will be delivered around one of Venturehaus’ unique Financial Services business process role-play games, promising to make the event fun as well as instructive. Following the Briefing, the Scotland Board will hold its first meeting in the afternoon around discussion topics such as “leading people through change” and “being bold – the need to take calculated risks”. Announcing the launch and the inaugural meeting, Alan Noble, Chairman of the Operational Excellence Board and Managing Director at Venturehaus, said: “I should first of all like to thank all of our friends, contacts and clients in Scotland for making this happen. Further thanks go in particular to AEGON Scottish Equitable for offering to host the first event next month in their Edinburgh facilities. Expansion and growth are always exciting, but it is all the more satisfying to have been asked to do this in Scotland as frequently as we have. I look forward to the Board becoming as successful there as it has been in London since we started in 2004”. For further information or to register to become a member of the Board, please contact Alan Noble at Venturehaus. Contact: Alan Noble, Managing Director, Venturehaus, 020 7194 7985, info@venturehaus.com
May Operational Excellence Board focusses on Investment Banking, London London, 24th May 2007 Our thanks go to the Morgan Stanley Global Core Lean Six Sigma Team, for hosting and running May’s very successful Operational Excellence Board meeting in their Canary Wharf offices. Two major investment firms, Morgan Stanley and Lehman Brothers, led the discussions at the meeting on the application of Process Improvement approaches to the esoteric environments of securities processing and derivatives trading. Following an overview of their own deployment approach, Morgan Stanley, posed two key questions to the Board for consideration by interactive discussion groups of the members. The first was focused on Capturing the Benefits and set the challenge of “How do we identify and realise project benefits in order to deliver real results and demonstrate the tangible success of the initiative?” The second concentrated on the continual challenge of activity Beyond the Green Belt and in particular “What is the best way to harness Green Belt skills to help Green Belts (or equivalent resources) deliver subsequent projects, and to cascade the new way of thinking across the organisation?”This stimulated considerable debate leading to an open exchange of insights and ideas from the members. A number of findings and suggestions were gathered, upon which agreement was reached in most cases, although there remained some differences of opinion about some of the proposed and/or adopted approaches. Following this, Lehman Brothers presented a case study on Operational Excellence in Derivatives. The success of the project used in the case study shows that, generally, there is an opportunity to increase the use of more advanced statistical techniques by operations managers to better isolate problems and improve the performance of their processes, even in an environment as unique as a derivatives trading floor. Reflecting a theme already identified by Morgan Stanley, the key in an investment banking environment may be to demonstrate this through action and results rather than edict or persuasion. We are pleased to announce the launch of a branch of the Operational Excellence Board in Scotland, as a result of strong demand. The inaugural meeting will be held in Edinburgh on 4th July 2007, which Aegon Scottish Equitable has very kindly offered to host. Alan Noble, Chairman,Operational Excellence Board June 2007 Operational Excellence Board: New Broad Street House London, February 2007 With a break from tradition, the Operational Excellence Board met for a breakfast meeting for its February’07 gathering. Following on from the interactive session lead by Phil Anderson of Ashridge Business School at the last Board, those gathered received the consolidated feedback on “What is Operational Excellence and what does good look like in a financial services organisation?” From this the key characteristics of Operational Excellence, Customer Intimacy and Product Leadership companies were further outlined. The second half of the meeting concentrated on the topical question of: “Who is currently doing what in the market? Is Six Sigma just too hard and therefore on its last legs in Financial Services?” Continuing the trend of active participation and mutual sharing the group shared the following:
The next meeting will be held on the afternoon of Thursday 24th May 2007. I would like to thank Leilani Plougmann of Morgan Stanley for offering to host this at their Canary Wharf offices. Alan Noble, Chairman, Operational Excellence Board Operational Excellence Board meeting hosted by HSBC London, October 2006 Our thanks go to Christopher Russell and the Team at HSBC for hosting the event as well as sharing with the group, in impressive style, the bottom line business impact they are delivering. Liam Palmer, Senior Manager, Best Practice from HSBC outlined the practical application of transaction driven profitability analysis designed by Robert Kaplan of the Harvard Business School and how the Bank has utilised Six Sigma to aid the understanding and in turn deliver improvements to process and through to the financials. The Senior Leadership engagement in this programme is commendable to see and clearly demonstrates the linkage between Operational Excellence and business results. In a first for the Board, Phil Anderson from the Ashridge Business School, led a highly interactive and participative session tasked with answering that $64mm question “What is Operational Excellence and what does good look like in a financial services organisation?” Those assembled, with considerable debate, determined some core common understandings as well as prioritising areas for deliberation at future Board gatherings. It is fair to say that this Board meeting was highly enjoyable and beneficial one that in line with its “constitution” brought together the collective capability of Senior Management in the Lean and Six Sigma fields across Europe. The next meeting will be held at 2pm on Thursday 22nd February 2007. This meeting will be held at the Institute of Directors Hub at New Broad Street House, New Broad Street, London, EC1M 1NH. Alan Noble, Chairman, Operational Excellence Board Operational Excellence Board meets at HM Treasury in a joint Financial Services and Government Services event London, 20th July 2006 On 20th July 2006, the Operational Excellence Board met at HM Treasury for a joint Financial Services and Government Services event designed to share best practices between the private and public sectors. The meeting was hosted by the Office of Government Commerce, in splendid surroundings adjacent to the Chancellor of the Exchequer's office in Whitehall. The first presentation was about Business Process Improvement practices in HR and Shared Services and within the creation of Shared Service centres in both in-house and outsourced circumstances. Despite the plethora of new Shared Service organisations it is clear that only some of these are successful and that the devil is in the detail not only of the planning and execution but also of the methods and approaches taken to establish a culture of management by process, rather than by function or department. Representatives from the Office of Government Commerce then led a discussion on the current status of Lean and Six Sigma deployment in the Government and Public Sector. Whilst there are notable advances being made in some public organisations, there is not yet an accepted or widespread common approach or a forum for the exchange of best practice. Furthermore, there are concerns that the current demand for assistance in these areas far outstrips the perceived supply, which the Office of Government Commerce is currently attempting to address. The Financial Services Operational Excellence Board will resume as normal on 19th September, at a meeting to be hosted by HSBC at their offices in Canary Wharf. The Government Services Operational Excellence Board will be initiated shortly. Alan Noble, Chairman, Operational Excellence Board Operational Excellence Board meeting hosted by Credit Suisse London, 16th May 2006 Thanks go to Credit Suisse for their kind hospitality and also to the two excellent speakers, from Credit Suisse and GE Money, for making the meeting a tremendous success again by all accounts. Credit Suisse shared what is happening within their organisation and illustrated the need for a flexible and adaptive Lean Sigma programme to accommodate the environmental and political changes that are inevitable in a major diverse global bank - the recent One Bank initiative has created the need for an integrated programme to be implemented throughout the bank. Significant financial results have already been achieved and the direct involvement of Executive Board Members in project sponsorship has been key, but the bank continues to face challenges in project selection and in middle management engagement. GE Money then introduced the Net Promoter Score approach which the company is deploying across its consumer finance businesses. Research has proven that the best predictor of future revenue growth is a factor of the extent to which existing customers are prepared to recommend a provider's services to others. Therefore, by tracking and improving this quotient, a business can see dramatic increases in product penetration in a marketplace. This requires "listening without filters", and a pragmatic approach to addressing very directly those issues which cause customers not to promote their provider to friends, family, etc. The presentations demonstrated two rather different cultures, but both provided fascinating insights into the organisational and behavioural change that the respective programmes are creating. The next meeting will be at 2pm on Thursday 20th July 2006 (this is a change to the originally published date). The meeting will be held at the offices of HM Treasury. This will be a joint Financial Services and Government Services event and will be designed to share best practices between the private and public sectors. Alan Noble, Chairman, Operational Excellence Board Operational Excellence Board meeting hosted by Bank of America London, 21st March 2006 This turned out to be probably the best event yet, with a pretty full turnout, and some even having to sit in the aisles! Sincere thanks are due to Bank of America for hosting the event in fantastic style. It's hard to sum up what were two excellent, but quite different, sessions. Addressing the topic "Six Sigma at Bank of America - Corporate Fad or Company Fabric?", Bank of America demonstrated that their business improvement programme has definitely become part of the company's fabric over time, even if there may have been a danger of traces of corporate fad at its initiation. This has largely been due to concentrating on the right focus and approach, rather than on the slavish pursuit of specific tool usage. Clearly the emphasis continues to be not so much on applying the particular methods which have been used but rather on the tangible business results which have been, and continue to be, achieved. This was also illustrated in video clips of some recent amusing TV advertisements on the theme of service excellence. Citibank then introduced us all to the combination of "Industrialisation and Emotions in a Bank", providing an almost science-fictional view of how so many best practices from industry are being applied in Citi's contact centre and other service environments. Interestingly, though, these are being adopted not in a robotic fashion but instead with due deference to the emotional aspects of human interactions both within the workforce and with personal customers. It was clear that the full package has enabled Citi in Germany to outperform all domestic banks in both service quality and economic efficiency - key results given that, according to one Board member, we bankers are essentially "arrogant" souls, "driven by fear and greed...."! The conclusion to draw from both presentations is that operational best practice is achieved through management of data and fact rather than assumption and gut feel, and that the focus needs to be on the results achieved much more than on the methodologies used. Operational Excellence is about rigour and discipline: about understanding WHY you are running an improvement programme and addressing those requirements because that will determine HOW and WHAT you are going to do. Alan Noble, Chairman, Operational Excellence Board Operational Excellence Board meeting in London London, 17th January 2006 The Operational Excellence Board convened again in London on 17th January 2006 at a meeting very kindly hosted in the offices of the Financial Ombudsman Service (FOS). The FOS opened the meeting with a new perspective on how value is delivered within the financial services industry. At the far end of the industry’s complaints process, the Financial Ombudsman Service is in a unique position to understand customer complaints, and described how it manages its service and works with firms to assist them in theirs. Ashridge Business School then challenged those present by asking whether their leaders need more discipline in the pursuit of operational excellence. Whilst operational excellence is often discussed in service organisations and often practiced in manufacturing companies, the group was questioned whether that is what they really wanted in services and if it is, how should they be leading to ensure its success. In a very interactive session, the group responded strongly to this challenge, and collectively determined that not only is operational excellence the goal, but that those at the meeting were fully engaged in delivering it through committed leadership. As usual, the meeting concluded with a networking session where the conclusion was that once again the forum had been a tremendous success. The next meeting will be held on 21st March 2006 at Bank of America in Canary Wharf. Sigma Board renamed Operational Excellence Board for 2006 Despite its direct association with Six Sigma through its name, the Sigma Board has always covered the subject area of business process improvement more widely than through just the application of Six Sigma methodology. It has instead focussed much more on the objectives of achieving excellence generally, through the use of a wide variety of best practices including not only specific process improvement techniques such as Lean, but also other wider management and business approaches. In order to reflect this, the managers of the Board have renamed it the "Operational Excellence Board", effective 1st January 2006. Alan Noble, current Chairman of the Board said, "we had felt for a while that the name of the group might be too narrow a description of what we discuss in our meetings and, more importantly, what we actually do in our businesses. We needed something that more closely reflected our aims in sharing our collective experiences at the strategic business level rather than a tactically technical one. Given that we are all, in one way or another, striving to achieve Operational Excellence, this new name is a much better fit. Ultimately, it's about making sure we get there, rather than slavishly applying a particular method." Operational Excellence Board holds quarterly meeting in London London, 11th October 2005 After members’ introductions, CSFB opened the meeting with a presentation outlining how their “Quantitative Continuous Improvement (QCI)” programme differs from a “typical” Six Sigma deployment. In particular, considerable emphasis is placed upfront on “Evaluation” and “Engagement” prior to running into the DMAIC project cycle, in order to prove that each initiative warrants the efforts involved and that each project will receive the required internal support to ensure its success. Similarly, rigorous concentration on the ongoing aspects of Control have proven to be essential not only in the risk environment in which the firm operates but also in providing for sustainable continuous improvement. Then GE Commercial Finance presented how it has embraced Lean in implementing significant and rapid change within its leasing and insurance processes. After describing the philosophies behind a Lean approach in the office (services) environment, the presentation showed how, by running a series of very short “Lean Events” working with the people directly involved in the processes, and using some very simple practical tools, GECF has been able to achieve step changes in process performance through projects lasting only 8 to 10 weeks maximum. Both presentations stimulated lively discussion on the mix of approaches and on the lessons from these experiences. The meeting concluded with a networking session in which all participants complimented the presenters and commended the success of the meeting. |
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