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- Keshav Ram Singhal
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Monday, December 23, 2024

Towards Improving Banking Services Quality - 20 - Productivity Booster Methodology – ESSA

Towards Improving Banking Services Quality 

20.

Productivity Booster Methodology – ESSA

 










Introduction

 

ESSA is a productivity-boosting methodology attributed to Wayne Fortuna, the former CEO of Hutchinson Technology. ESSA is an acronym that stands for Eliminate, Simplify, Standardize and Automate.  This concept has been used in manufacturing for years but is now becoming popular in all forms of business including service sector like banking.

 

When done correctly ESSA methodology will improve productivity, allow people to spend more time on value-added activities and eventually lower costs in the organization substantially.

 

1)      Eliminate: Remove Non-Value-Added Activities

 

The most crucial element of the ESSA methodology.  Productivity by definition is doing more with less.  The elimination of non-value-added activities and processes that simply are not needed is the first step in the journey. To eliminate such activities, people need to be honest and give up doing things the way they have always been done. 

 

Please do not confuse elimination with automation.  When an organization automates processes having non-value-added activities, the organization simply is automating waste and get to the bad results quicker. Technology vendors often showcase their solutions under ideal conditions, which may not always reflect the realities of organizational processes. The reality is people are not very comfortable with the removal of non-value-added activities and tasks because it defines the job they currently are doing at work. Automation should be the last step, not a substitute for elimination. Automating waste leads to inefficiency at scale.

 

2)      Simplify: Focus on Efficiency and Effectiveness

 

Once an organization get rid of the non-value-added activities the organization should not be doing then it is time to simplify what is left.  Simpler approach leads to less quality issues and is always more reliable.  More importantly happier people.  The frustrations of dealing with complex processes makes people crabby at work.

 

How long does it take to complete tasks in your organization? How many meetings are required to resolve issues? Do employees feel that accomplishing simple tasks often takes hours, if not days?  Simple hang-ups in the morning lead to all day long activities. These are all clues that the organization's processes need simplification. Organizations should encourage employees to critically evaluate long-standing practices and embrace necessary changes for improvement.

 

If this is the organization's situation the related processes need simplification.  Simplification does not mean jeopardizing the output; it simply involves achieving more with less effort. To simplify a process requires duplication and errors be removed. For instance, in banking, simplifying the loan approval process by reducing redundant verifications can significantly enhance customer satisfaction and operational efficiency.

 

3)      Standardize: Build Scalability Through Consistency

 

 

A simple process by every individual in the system is not scalable.  A simple process adopted by everyone in the system is scalable.  This notion of scalability leads to massive gains in productivity. Scalability refers to the ability of a process to handle increased workload efficiently without compromising quality.

 

The universal adoption of a consistent process in the system is the definition of standard. Standardized processes are more reliable and deliver higher quality outcomes. Standardized processes do not necessarily imply lack of customization simply it means consistency in the system.  A design process can be consistent and yield highly unique and customized products.

 

Without standardization organizations cannot automate processes.  The only way to scale to more demand without standardization is to hire more people.  In today’s labour market the lack of available people makes growth without standardization nearly impossible.

 

One important element to consider with standardization is that the true gains come when both the process and the management systems become standardized.  Most organizations focus on the standardization of the processes; however, management needs to have mechanisms on how to review the results of the process and have consistent decision-making frameworks to best utilize and capitalize on the gains made by the process.

 

4)      Automate: Harness Technology for Productivity Gains

 

Automation is the process of taking well run processes and adding technology to maximize the final steps in productivity.  When an organization automates poorly run processes, the organization is automating the wastes in the process in addition to the work.  Automation is fairly expensive activity to undertake and the automation of wastes will reduce the payback of the investment. Before automating, organizations should assess the return on investment (ROI) to ensure the cost of automation aligns with the expected productivity gains.

 

Automation, if done correctly, will deliver consistent results, high quality, and ultimately a productivity explosion. The productivity gain can then be used to lower costs or reinvest in growth.

 

Conclusion

 

By embracing the ESSA methodology in its entirety, organizations, including banks, can achieve transformative improvements in productivity and efficiency, laying the foundation for long-term success in a competitive landscape.

 

The ability to transform individual or organizational productivity is a gradual progression. Each of these steps will have significant impact to productivity.  When done in the proper sequence and taken all the way to automation productivity can jump tenfold. Ultimately, when implemented correctly, ESSA has a significant positive impact on the organization's bottom line. In the rapidly evolving banking industry, where efficiency and customer satisfaction are paramount, adopting the ESSA methodology can be a transformative strategy for achieving lean operations and sustainable growth.


I welcome your comments, questions and suuggestions.


Warm regards,

Keshav Ram Singhal 

Next - 5-S Practice and Lean Banking 

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