The next time you think your organization’s process problems are so singular they couldn’t be happening anywhere else, ask Joe Langlitz and his colleagues how they spent the first month of their summer this year.
Langlitz and fellow Fisher College of Business MBA students James Goetter and Wenzhao Bi closed out their first year in the program with an 8,000-mile trip below the equator to Gaborone, Botswana. They were one of eight groups of students sent overseas through Fisher’s Global Applied Projects (GAP) program to work up-close with a corporation to solve a business challenge. Sponsoring the students’ gap team was the Botswana arm of British banking giant Barclays, where Fisher alumnus Jeff Davis serves as Chief Risk Officer.
Looking back at the work Langlitz and his team completed, Davis says they’ve helped lay the groundwork for some major improvements in Barclays’ business loan approval process. Getting there, however, entailed a frenzied three-week mission to hunt down process waste that put to work what each team member brought from the classroom and enlisted the help of a few Center for Operational Excellence members, too.
‘I wanted a revolution’
Davis cut his teeth in the birthplace of lean manufacturing, working with automakers and suppliers as they applied lean/Six Sigma principles. Today he’s a top officer at Barclays Botswana, which employs 1,200 at its corporate office and 42 branches and ranks as the second-largest bank in the market.
“When I got into financial services later in life, I would see our processes through the lens of the learnings I had in the automotive industry and would get frustrated at our inability to do true lessons and root-cause analysis in our pursuit of simple, repeatable processes.”
A particular target of Davis’ frustration was the corporate loan approval process at Barclays Botswana, which could – and often did – take as few as two days but also could stretch past six months in some instances, putting average turnaround just shy of four months.
“I wanted a revolution,” Davis said. “I wanted 500 percent better.”
Davis took his first steps toward a solution by connecting with the GAP program at his alma mater, eventually bringing the trio from Fisher to Gaborone and pairing them with two MBA students from the University of Botswana. The project team had zero formal corporate banking experience – and that’s exactly what Davis wanted.
“We wanted an injection of new ideas,” he said.
Langlitz admits to a dose of culture shock upon arrival. Gaborone is the governmental and economic capital of a country with a fast-growing economy, but one that also still relies heavily upon mining and the cattle trade. It’s the latter – particularly their penchant for wandering onto busy roads in Gaborone – that struck the team in their early days.
“The first week we were there, it really sunk in: ‘We’re on the opposite side of the equator,’” he said.
The more time the team spent in country, however, the more familiar it became – and the more Langlitz and others saw how universal challenges such as those at Barclays are.
“They’re just like any institution,” he said. “They’re trying to figure out better ways to serve the customer.”
The GAP team and their University of Botswana colleagues took on what Barclays dubbed “Project Firefly,” an extensive effort to visualize the loan approval process flow in the form of a value stream map and, importantly, flag non-value-added elements therein. The long-term goal is to slash average loan-processing time a staggering 90 percent to only 10 days.
Mapping the process required interviewing numerous stakeholders across different offices and navigating at-times fraught situations.
“With the overall process so fragmented, teams tend to be myopic when dissecting which processes are adding to uncompetitive turnaround times,” Davis said. “We asked the team to hold a mirror up and tell our people what’s going on without placing blame, and they did a nice job of lowering defenses.”
In addition to receiving regular coaching from COE Executive Director Peg Pennington, the Project Firefly team also sought insights on the challenge at hand from two member companies: Huntington National Bank and KeyCorp.
“A lot of the pain points they had,” Langlitz said, “were pain points Barclays has been dealing with.”
Jeremy Winstel, a senior manager of enterprise lean/Six Sigma for Key, said reducing customer hassle has been a regular focus for the bank in its process improvement efforts. His insights served as a key early benchmarking opportunity for the project team before and during their stint in Gaborone.
“Providing this knowledge transfer assistance has been a great way to get plugged in to Fisher and try to help out,” Winstel said. “That’s what the COE’s about, holistically.”
Kevin Plaugher, senior vice president and business banking credit manager at Huntington, also spent time walking the team through the credit approval process and imparting a key bit of wisdom:
“It’s like physics,” Plaugher said. “If you want to extend credit to the customer, there are certain things you have to do, and you can’t pretend steps in the process can be skipped or eliminated. Still, even with the most manual processes, there are tools to make it faster, simpler, and clearer.”
Langlitz said benchmarking with Huntington and Key “sent us down the right path” to ultimately making this key discovery: More than half of the time Barclays Botswana spent processing loans was non-value-added. This opened the door to substantial improvements.
Just the beginning
The Project Firefly team capped their nearly three-week stint with Barclays Botswana by reporting out their findings and recommendations to the bank’s executive leadership team and its Managing Director, the region’s top-ranking official. Langlitz said the team took particular pride in the fact that none of its recommendations came strictly from qualitative information.
“All our recommendations were data-driven,” Langlitz said. “These weren’t just because we heard someone say it was a good idea.”
The results and recommendations provided major clarity for Barclays going forward, even if Davis and his colleagues already knew process waste was a problem.
“We knew there was a lot of waste in the system, but we’d never been able to measure it,” he said. “They did a great job of taking a complicated set of data from a lot of locations and distilling it down to a very clear story to tell.”
Through the summer, Barclays Botswana began hiring additional associates and making its first strides in implementing some of the Project Firefly recommendations. Improvement efforts are set to ramp up through the fall, Davis said, for what is expected to be an ongoing process.
As for the students, Langlitz said he and his colleagues gained invaluable process improvement skills, through an unforgettable experience, no less.
“Being able to say I’ve been there, done business in a different culture, I’m a lot more comfortable now.”