Lean-led Fit for Growth transformation for a European bank in distress

Our client on this Fit for Growth transformation program was a European bank with total assets of more than €100 billion and approximately 3,000 full-time employees worldwide.

The situation

Our client on this Fit for Growth transformation program was a European bank with total assets of more than €100 billion and approximately 3,000 full-time employees worldwide, as of 2012. It had suffered significantly during the 2008 financial crisis, and only state guarantees had kept it afloat.

Given that under E.U. direction, state guarantees had to be brought down until the end of 2013, additional cost reductions were required. The plans foresaw further massive reductions of the balance sheet by about 40%, withdrawal from several business segments and from most international locations, dismissal of more than a third of the workforce, reduction of administrative cost by more than €600 million, and a repositioning of the company as the bank for local and regional entrepreneurs.

The client called on Strategy& to help it achieve these massive cost reductions while keeping employees engaged, increasing client satisfaction, and making required organizational changes to position the new bank for future growth.

The client suffered significantly during the 2008 financial crisis

The client suffered significantly during the 2008 financial crisis

Building blocks of the lean program

Building blocks of the lean program

How we helped

Lean management was used as the main vehicle to transform the organization, reduce workload, realize the targeted cost reduction, and make organizational improvements — all with the ultimate objective of making the bank ready for growth.

We helped the client build lean capabilities, starting with two pilot departments and gradually rolling them out across the entire organization. We applied our proven Strategy& lean methodology across all waves of the transformation to ensure that the approach was data-driven, rigorous, and replicable.

We heavily involved employees from all levels of the organization, not only to provide input into concepts that had been worked out, but also to actively contribute to the development of content and deliverables. A community of internal lean experts — we called them “navigators” — was established via a train-the-trainer program; they acquired the required skills to roll out and maintain the lean program within the entire bank. This active employee involvement throughout the process was key for sustainably implementing a culture of continuous improvement, empowerment, and personal responsibility.

In order to not only help the bank overcome its current challenges but prepare it for winning in the market, we helped the client optimize processes with a clear focus on activities that generate value for the customer, clarify roles and responsibilities, and put in place adequate tools, systems, and data-driven performance measurement.

Results

As a result of the implementation of this Fit for Growth program, overall productivity improvements ranged from 10 percent to 38 percent, depending on the department, with an average productivity gain of 24 percent.

In addition to driving significant cost reductions, this lean-led Fit for Growth transformation enabled improvements of three key elements:

  • Client-centricity: Teams refocused explicitly on client needs, resulting in a measurable improvement in client satisfaction and an increased share of wallet and future referral potential.
  • Risk management: Operational risks were significantly reduced via robust end-to-end process design; the implementation of clear handshakes between front, middle, and back offices; the establishment of checkpoints and controls; and improved data quality.
  • Culture change: The lean culture empowered and motivated employees and helped build pride among them, inspiring them to go the extra mile while developing a self-learning organization and a common language for continuous improvement.

Productivity gains through initial lean projects

Productivity gains through initial lean projects

A practical approach to business transformation

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A practical approach to business transformation.

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