Efficient, effective, and productive are terms that are often used to define banks that manage their customer experience at the right cost. Reactions vary when those terms are mentioned in regard to high-performing banks or in describing a performance improvement effort. Some managers consider an increase in productivity as simply “doing more work,” while others see it as a chance to realize more sales and service opportunities. Typically, improving efficiency results in less work while improving both customer and employee experiences.

The “more work” stigma stems back to decades ago when “efficiency programs” were a way to trim staff, often with layoffs and without the benefit of systems integration and process improvement. Companies simply used ratios to determine the number of required tellers, proof operators, credit analysts, or consumer lenders based on some form of output such as transactions, encoded items, underwritten applications, or booked loans. Those ratios provide a good starting point to better understand that a gap exists; but they don’t reveal the causes, and they don’t define ways to improve outcomes through redesign. For example, a ratio won’t reveal that a straight layoff will likely result in the burnout of remaining staff and impairment to the customer experience.      

When using a proven redesign methodology, it is preferable to communicate expected outcomes for efficiency gains and how the organization is going to implement the changes. We work with our clients to develop a communication plan that fully explains what is going to happen, when it will happen, and what the expected outcomes are. It is also important to communicate the status of the initiative at milestones throughout the process so that staff will not use the rumor mill to speculate. Staff members are much more likely to embrace a change process and participate in it (even advocate it) if they know what’s going on. I recall a memorable project kickoff meeting with hundreds of officers in a room where the CEO was conducting a Q&A. When the questions dried up, the CEO said he was surprised that no one asked if there was going to be a layoff as a result of the initiative. From the back of the room a lone voice called out, “We were afraid to ask.” The fact is that they were thinking about it.

Nolan’s annual Bank Performance Study provides the analytics and comparative analyses that identify performance and efficiency gaps among peer groups and lines of business. The results provide directional information to participants to help them focus on specific improvements that offer the greatest impact. The real work and fun is finding out why the line of business gaps exist, and then redesigning the processes so that customers and staff can navigate them efficiently. To be effective, an improvement program must take all the steps: determine the performance gaps; assess why they exist; communicate the benefits and expected outcomes; and then conduct an in-depth redesign of the process. This tried-and-true formula mitigates the stigma and maximizes results.