Through the years of working with Financial Institutions, to get real returns from innovative solutions, we have noticed that many of these institutions are so focused on the new tools at their disposal that they have forget the fundamental “blocking and tackling” principles that are necessary to make an operational shop successful. We have observed time and again managers who do not know how to establish, assess, monitor, provide feedback, and budget using productivity metrics and volume trending; which we believe are core fundamentals to any successful business. This fundamental oversight is costing them hundreds of thousands, if not millions, of dollars each year.
To highlight the point, I will share a story of a recent operational unit we visited, a call center of sorts. I say that because these folks were responsible for data entry, answering inbound calls, and following up with outbound calls. There was a significant amount of disruption due to varied tasks and I estimated approximately 15% of labor was associated with this disruption and switching. When I asked the manager what the standard was for this group I was told 100 per day. It seemed curious because each task required a significantly different amount of time. If the employee never answered the phone the 100 in data entry would be entirely feasible, and in fact we found the highest producers, the ones being rewarded, were doing exactly that. They were setting their phone to unavailable, while the others, “low producers”, were picking up the majority of the calls and driving down their productivity.
We worked with the teams to derive individual standards for each function and provided daily employee feedback. At first the management was reluctant and somewhat skeptical. We proposed this simple separation of duties would in fact save the group over 12 people or 13%. The savings was even higher in actuality due to the increased monitoring, feedback, and clear objectives. After the realignment was completed, they were able to handle the same volume with 28% less people, saving of over $1.1 million a year.
There in was the first lesson. Make sure that each function a particular role performs can be independently measured and a feedback loop has been established. You will find significant expense reduction opportunity, improved morale and lower turnover if you get it right.
In subsequent discussions, we will cover how to establish meaningful metrics, managing to volume trends, and using capacity plans for flexible staffing and budgeting.
- No events.
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