Bank of Montreal

The Bank of Montreal goes back nearly 200 years, and now more than ever BMO Financial Group is heavily focused on making money make sense for its customers, John OHanlon learns from senior executivesNo one needs reminding that ill winds are blowing through financial markets, and BMO has weathered economic cycles in the past. We understand them, and we know how to manage through the downturns, said BMOs president and CEO Bill Downe to industry analysts in September. One of the factors that will help BMO manage through this current cycle is that they are working hard to improve customer perceptionboth inside and outside of the bank  and we are going to be very specific in defining what constitutes a great customer experience, said Downe. The customer service experience, delivered by the front-line employees, depends heavily on the quality of data and the complex processes that take place behind the scenes. Thats why BMO began four years ago to review its back-office operations with a goal to achieve quality excellence. Karen Metrakos, executive vice president of operations, with the full support of Downe and BMOs executive management committee, chose six sigma as a strategic initiative for the newly consolidated Product Operations division of 3,600 employees providing operational fulfillment and after-sales servicing functions.BMOs ability to bring clarity to the complexities of money and finance is due in part to its successful efforts in improving quality in its after-sales operations. Deploying lean six sigma business improvements has enabled BMO to improve the customer experience, while realizing significant cost savings, says Richard Lam, lean six sigma deployment leader.Developed by Motorola in a manufacturing context in the early 1980s, six sigma has been demonstrated to be just as effective for improving any business processes, so it made sense to adopt six sigma methodologies and tools within BMOs quality deployment strategy, Lam explains. There are many similarities between back-office operations in a bank and the jobs people do in a manufacturing plant. Just as in an assembly plant, where customer orders trigger standardized operations to fulfill those orders, in financial services this is also true, as customer requests require many repetitive processes, such as processing mortgage applications, to be executed efficiently and consistently.Quality is inextricably linked to standard operating proceduresif you do the same thing in different ways, the results will varybut the first thing the Product Operations team had to do was map the processes. BMO had to build process transparency before they could even begin to introduce six sigma and lean thinking in the businesses. This meant catering to the differing priorities, process improvement opportunities, business processes and systems, and organization subcultures that had built up over 190 years, and it took some time to do. At first there was overwhelming natural resistance to the deployment, Lam admits, but four years later there is palpable success, and recent international recognition and awards have helped to convert the wary. The deployment team was challenged to deliver bottom-line results quickly while concurrently developing the required supporting infrastructure across Product Operations. Lean enterprise was strategically deployed early to demonstrate successes and build momentum. Among the many lean improvements achieved by the team, one breakthrough example successfully eliminated annual consumption of 5.5 million pages of paper reports that stacked up as high as the CN Towerone of the worlds tallest structuresa significant environmental contribution for BMO.To effectively deploy lean six sigma in Product Operations, BMO had to create a robust governance structure. The first step was to ensure oversight through the deployment of standard processes, metrics and controls, and executive reviews by the Operations leadership team. This team was composed of senior executives of all Product Operations business units who recognized the value of lean six sigma and provided their full support by setting expectations within their organizations, removing obstacles, and assigning resources, ensuring all their senior managers were trained.Consistent executive involvement has resulted in lean six sigma being top of mind for BMOs leadership, which has helped embed it into the culture. The ongoing success of lean six sigma was achieved through the widespread teamwork of the people within Product Operations. Many champions, yellow belts, lean practitioners, subject matter experts and others collaborated to identify opportunities, build business cases, gather data, generate solutions, implement, measure and control progress. For every step taken, lean six sigma is being absorbed into the culture.Today, Operations internal quality office team supports, facilitates, trains and advises on project identification, execution and delivery, and to date has completed more than 300 improvement projects across the bank. Continued strong partnerships with business leaders and champion managers and teams across the Product Operations groups, combined with an aggressive approach to six sigma deployment, has enabled BMO to reach its financial targets 21 months ahead of its five-year schedule. As the success of the projects became apparent, push became pull and the deployment developed its own traction. In fact, the deployment is delivering hard benefits in excess of 10 times its investment to date, providing BMO with savings against the costs associated with operations. Who wouldnt want some of that in the current economic crisis?BMOs successful deployment has prompted a dramatic increase in training of six sigma champions, green belts, yellow belts and lean practitioners throughout Operations. Were really ramping up the training now, says Lam. At the end of 2008, more than 1,200 people had been trained in lean and six sigma, and training is planned for an additional 1,000 employees for 2009. This deep penetration into the business has allowed teams to converse in a common language and has provided the necessary momentum for teams to focus on continuous improvement.Although most improvement projects to date have been in the back office, customers should notice the difference too. As Gord Forfar, senior vice president of personal & commercial product operations, observes, We have become a more valued partner, removing repetitive processing from branches, reducing errors, consolidating and streamlining the services we provide, to enable our front-line colleagues to spend more time with our customers, building relationships and meeting their financial goals. International recognition of BMOs efforts in lean six sigma deployment has also increased interest from other areas of the Bank. In October 2008, BMO won three WCBF Global Six Sigma & Business Improvement Awards: the prestigious Platinum Award for the Most Outstanding Organizational Achievement, Best Achievement of Organizational Business Improvement in the Financial Services Industry, and Richard Lam received the Business Improvement Deployment Leader of the Year Award. This augmented the two WCBF awards won in 2007. It was an exceptional moment when we learned BMO Financial Group was the recipient of these three awards, says Lam. These awards are truly attributable to the hard work and dedication of all the people who were involved and supported the deployment across Product Operations, he concludes, reinforcing that operational excellence can only be achieved though partnership.  Editorial research by Tim Conlon