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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