Super7 – The Logical Next Step for Lean within Financial Services

A few years ago I was given the opportunity to complete a significant task – optimising the back office at the Leeuwarden branch of a Dutch bank called ING. What began as an experiment in implementing lean in this back office eventually developed into something else: a new solution, and one with the potential to redefine lean and its application within the financial services industry. We call this solution Super7.

Super7 Defined

Super7 Operations are based on the principle of dividing traditional-size teams into small teams of five to nine persons. Each small team is called a Super7, and every Super7 receives a fixed percentage of the work of the larger group.

Each Super7 team has the task of completely finishing all of their customer requests from start to finish, directly the same day, without making the customer wait. In most cases, implementing Super7 Operations makes it possible to work without inventory and without handovers. This means that a complex workflow-management or inventory-management system is no longer necessary.

The small Super7 team creates flexibility in skills: if a customer request requires several different tasks, a multi-skilled Super7 is created that can finish all tasks within the team. The team size is effective, and because the teams are small, they allow for visibility and trust, which in turn enables the team to make effective decisions. It's almost impossible for a traditional team of twenty to twenty-five persons to make a decision that everybody is happy about.

Finally, every Super7 has control over how they do the work: who does what, in what order, and at what pace – all are the responsibility of the Super7. Super7s are steered only on output, on what they deliver. And they can ask their managers for help at any time. The Super7 applies the principles of lean and operational management, with autonomy and responsibility on the shop floor.

The most recent trend in this space, operational management, has achieved some impressive results, causing a true lean-hype at banks since the early 2000s. What I have found in my own experience in the last few years, however, is that it's now time for the next step beyond operational management, via the kind of new approach offered by Super7.

The Limitations of Operational Management in Back Offices

Lean was first introduced in the world of banking via the back office, as this environment was the bank department most similar to the production environment (i.e., shop floor) where lean originated – the manufacturing and assembly plants of Toyota. The lean basics [see figure 1] and well-known lean best practices [see figure 2] like standardised work, takt (pace of manufacturing time [from the German]) and standardised cycle times, visual management, and production levelling were all translated into a system for the bank back office. This system is what we call operational management, and it consists of the following:

• standard times for each type of customer requests

• work packages of exactly one hour of work each, assigned to individual employees on an hourly basis

• work held in inventory with planned production to level out peaks and lows in customer demands

• performance measurement, which measure and direct employee availability and productivity, with matching target setting on all levels in the organisation

• team boards visualising team performance versus targets; weekly meetings with the team

• regular continuous improvement sessions on the shop floor

Leeuwarden had adopted operational management a few years prior to my arrival, and at the time, everybody was very enthusiastic about it. When I arrived at Leeuwarden, however, the initial sheen was off the rose, so to speak. Operational management was not having the desired effect anymore. In fact, the performance of their back office had ING entirely puzzled.

Despite the implementation of lean, customer goodwill was at an all-time low, with production lagging consistently behind customer requests. With all the lean best practices in place, why were the customers complaining so much about the service they received? And, when operational management had always been the most effective solution for meeting customer expectations, why was the organisation now unable to meet those expectations when applying that solution to the situation?

Simply put, the old methods weren't cutting it within the evolving world of financial services. The way we used to do operational management wasn't enough for what banking was becoming.

The integration of Web-based services into the customer experience of businesses across a wide array of sectors had changed the time frame of customers' perception of what quality customer service is. Via the Internet, customers had become accustomed to a new level of service; for instance, a Web-hosting contract is closed within minutes, with digital forms, e-mail confirmations, and all the necessities provided online.

The customer question became: why do I have to wait more than a week for my bank to answer a simple request/question? Perhaps even more importantly, as a result of the global financial crisis, customer trust was at an all-time low. We needed a new approach in place that could increase efficiency on the shop floor and directly address customer needs, assuaging both the rise in customer expectations and the rise in customer complaints.

Super7 — Rethinking the Back Office

Super7 Operations, as described in this book, provided the new approach that answered the prevailing dilemma at ING. And what worked for ING, perhaps, could work for more financial-sector back offices searching for the next lean breakthrough, the next logical step after operational management, and the one that would transform the financial sector's processes, culture, and customer relationships.

Clearly, the lean trend within financial services is far from over. According to recent research, banks and other financial institutions that have successfully implemented lean programmes record 15 per cent to 25 per cent improvement in overall efficiency. Although the banking crisis forced banks to rethink their business, their proposition, and their priorities, lean (with its core elements of...