Our experience in deploying and sustaining an OE system @ BNP Paribas

Operational Excellence is a magic formula that today’s top executives use in a generic way to make their staff understand they are not performing the optimal way. Click here to read more Articles on The Global State of Operational Excellence: Critical Challenges & Future Trends - Research Report 2018/19.

The challenge lies within understanding the various levers hidden between this term.

Operational Excellence is not a new concept. Many big players have already deployed such an initiative. It is wrongly believed that it can be achieved following a standardized path.

The method usually consists of the following key elements:

• A sponsor to start / pilot the transformation (of an organization and / or a process)
• Quick proof of results so that Top management supports (and finance)  the next steps of the transformation efforts
• Deployment on a larger scale by :
• selecting and managing improvement initiatives, including continuous improvement
• building a team composed of top talents to deploy OE
• Recognition, reward and trust in people to obtain employees’ buy-in
• Integration in the everyday way of doing, running the company.

Operational Excellence could therefore become a function as Risk, Compliance or R&D.

All above steps are necessary to reach sustained improvements and ultimately a complete Culture change. Click here to read the full Survey Report 2018/19. 

Looking for the root causes of failure

Piloting and Deploying are usually not an issue as long as short term benefits are quickly obtained. The only precaution that should be taken (and that is unfortunately often forgotten) is the possibility to drive back : if the transformation is not successful, we must be strong enough to go back to the initial state and think our strategy all over again, looking for the root causes of failure. The other and important point is to be ready to back up the teams, especially when the transformation is not as successful as expected.

Despite quite important investments, companies experience the same difficulties regarding Culture change and sustainability of improvements.

Typical issues encountered while deploying OE are :

Lack of sustainability in improvements.

Companies make too much use of external resources. This is not compatible if one wants to become autonomous in terms of methodology.
This is why, at BNP Paribas, we have chosen to drive our transformation efforts using internal teams; our talents come from internal mobilities as well as external hires. These external hires must share our values before joining us. Our entities are more likely open to discuss and share issues with internal consultants and they do not feel they have external people to give them lessons.

Operational Excellence is driven by a Corporate structure that ensures methodology and practices are always up-to –date. We drive the effort in the entities and we make the entities become autonomous, by coaching and training their people until the internal expertise is acquired. This takes time and a lot of investment, but the related gains are worth these efforts.

Focus mainly on the hard part of OE i.e. the “system” (team, projects, process, budget…)

neglecting to build a clear vision on how the company culture should become (the soft part). Note: it is often considered that cultural change should be done before transformation. We believe successful transformation comes first and will bring a cultural change. Indeed, the OE system has an effect on the culture change which ultimately ensures sustainability.

Copy/paste OE deployment and Culture transformation from outside.

This cannot work for at least two reasons :
- OE maturity of the most inspiring companies on the market (GE, Toyota,Valeo) is too advanced to be pasted as such in a company where the concept of OE is unknown.
- the targeted System / Culture, even rolled out step by step at the right pace, is not adapted (e.g. applying the industry way of doing to a service environment).
In any case, the targeted system/culture should be thoroughly thought and should aim to improve rather than replace the existing one.

Focus only on the end Customer and on financial savings. 

Neglecting a key stakeholder i.e. the employees may lead to losing  their buy-in as they may fear for their own jobs… The OE only works on the long run if all stakeholders benefit from it.

Poor alignment of managers’ new role

Need to define and communicate the new role of managers in the transformation and on “How to be a manager” in the new way of doing. This is especially true with middle management, a key aspect of a successful OE deployment. They must be involved at the very beginning and must be coached on the new aspect of their job after transformation, which is far from being clearly defined in most companies. This is very often neglected and can have disastrous consequences on future results.

Lack of alignment of HR strategy with OE.

As mentioned above, OE is much about people, culture, management, etc... Hence, they should be involved as early as possible in the definition of the OE initiative. OE vision needs to onboard HR if one wants OE to become part of the company’s DNA. HR representatives will contribute to recruit, train, coach, evaluate, reward and recognize people (employees and managers) according to the newly defined OE compatible profile, behavior and performance.

Additional Challenges

More and more frequent technological breakthroughs will be additional challenges for the coming decade.
New ways of consuming and new players like GAFAs deeply influence the rules of the game including financial services. It leads to more competition, more innovation, more demanding customers. At the same time, new technologies (robotics, AI, digitization,…) appear and are real opportunities for the business and also for OE system. Thus, we must make sure that our OE teams master these topics to ensure that they keep providing the best contribution to the company.

At BNP Paribas, the OE Team’s mission is to successfully support all transformations to be in line with its motto : “The bank of a changing world”.