Operations efficiency is back at the top of the agenda of the Luxembourg organizations
Banks, asset servicers, and asset managers are all faced with margin pressures and tremendous pressure to control the expense line. Operations efficiency is a way to not only help organizations demonstrate control of the expense line, but also to provide scalability to grow the business without adds to staff. Operations efficiency is not as most people think, about cutting jobs, but it is truly about helping organizations grow while managing the expense line. Additionally, an inefficient operation yields a poor customer experience, and low employee satisfaction. After years of costs containment efforts, operations efficiency has never been more relevant than now for Luxembourg organizations, so that Luxembourg can remain competitive in the region, by providing the best possible customer experience, by attracting and retaining the best talent, and by positioning Luxembourg to grow further for the future.
Enhancing customer experience
An inefficient operation yields a poor customer experience. This poor experience results from employees being satisfied with status quo, and spending too much time on non-value activities. Status quo results from a mindset “that we have always done things this way” or “we have always delivered this to our customer”. Non-value activities are unavoidable in an inefficient operation, and robs valuable time that could be spent on value add activities. Value add activities are those activities the customer is willing to pay for, all other activities are considered non-value add activities. An operations efficiency program looks to remove as much “waste” from the processes, so that the employees have more time available to spend on the value add activities. The efficiency gained and used in this manner creates a much better customer experience. Additionally, time could also be spent on creating new customer delights, things the customer was not expecting, and so the customer is “delighted” to receive these items or services. This investment in improving the customer experience can take the experience from one that is very “transactional” in nature to one that is “relationship building”, and eventually “preferred partner”. Cultivating a culture that is customer focused in this way described, can only be achieved if there is time to do it. This time can be gained by improving the efficiency of the operation, and the mind set can be achieved quite easily as most employees want to create a better customer experience, and do more for the customers they interact with.
Boosting employee satisfaction
Most employees get up in the morning, and go to work with the best of intentions of doing a “good job”. However, many are working with bad processes, antiquated process, or processes that just don’t work so well. These bad processes often results in defects that require rework, or even worse, a defect that becomes visible to the customer. These defect rework loops, and irate customer experiences impacts employee satisfaction negatively. Additional forms of waste could result in too many workarounds rather than one or a few standard processes to work with. Too many workarounds can become unbearable for a team to manage efficiently, and impacts the level of quality that could be delivered by the team. All of this results in low employee satisfaction, which results in higher turnover rates. Turnover has a huge cost to the organization, including intellectual capital that’s gets lost with this high turnover. There is a very strong correlation between employee satisfaction and low turnover. Therefore, implementing an operations efficiency program could have great positive impacts to improving employee satisfaction, and impacting the costs of low employee satisfaction.
Creating scalability in the operating model
As processes are improved and become more efficient, by standardizing processes, and by consolidating processes, the organization creates a scalability to absorb any increased volume demands from growth much easier. Standard processes are much easier to manage, and creates an end to end flow that creates greater capability. Consolidating tasks to a centralized team also creates a center of knowledge and expertise for those processes that have been consolidated. These teams will also produce greater capabilities for the organization. Additionally, some of these centralized teams could be further consolidated to become regional shared services or global shared service for further capability gains.
Communication: a critical factor to achieve results
Proper communication of such a program is imperative to the success of the program, and will reduce any misunderstandings. The most common misunderstanding is that employees think they will lose their job. This is a huge misunderstanding that needs to be prevented at the very beginning with proper communication. The communication needs to come from the top of the organization to explain to employees what the company strategy is, why the organization is doing this, how the employees will be impacted, and what’s in it for the employees. Communication should be honest and transparent, so that the employees buy in to the idea, and see this as an opportunity. This could be a great opportunity for staff to grow and develop into new job roles, and for the workforce to feel empowered by being involved in creating the recommendations to be implemented. This is their moment to take advantage of the opportunity to have their expertise heard, and be part of the change process. Additionally, as initiatives are implemented, some preparatory activities in their day to day could be automated or offshored. This doesn’t mean impacted employees would be eliminated, instead this capacity could be used to grow the business further without add’s to staff. By growing this business in this manner, impacted employees would have the opportunity to grow into new job roles, or a more enhanced existing job role. Additionally, natural attrition could be leveraged to redeploy people rather than posting a job opening. Communicating these positive benefits, and securing buy-in sets the stage for a very successful program, without any job eliminations. Job eliminations results from organizations who do not implement such a program, and therefore have no other choice to manage their expense line but to just cut jobs.
Growing the business with the support of an operations efficiency program
Operations efficiency, allows an organization to manage its expense line, improve the customer experience, increase employee satisfaction, and create scalability to grow the business further. As budgets are being cast for next year now, with forecasts for sales, and forecasts for expenses and add’s to staff, now could be the right time to seriously consider growing the business with an operations efficiency program to support it. Luxembourg organizations are positioned to grown significantly, and therefore should consider an operations efficiency program in order to be even more competitive on a global scale.
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