Bank of Montreal

Banking on lean times┬áThe Bank of Montreal goes back nearly 200 years, and now more than ever BMO Financial Group is heavily focused on ÔÇ£making money make senseÔÇØ for its customers, John OÔÇÖHanlon learns. No one needs reminding that ill winds are blowing through financial markets, and BMO has weathered economic cycles in the past. ÔÇ£We understand them, and we know how to manage through the downturns,ÔÇØ said BMOÔÇÖs 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 ÔÇ£working hard to improve customer perceptionÔÇöboth inside and outside of the bank ÔǪ and we are going to be very specific in defining what constitutes a great customer experience,ÔÇØ said Downe. ÔÇ£We are continuing to drive a customer-oriented focus to our front line and through the entire organization ÔǪ pushing individual performance scorecards down to every front-line employee, with specific key performance metrics.ÔÇØ Yet the customer service delivered by the front-line employees depends heavily on the quality of data and the complex processes that take place behind the scenes. ThatÔÇÖs why BMO began four years ago to review its back-office operations with a goal of achieving quality excellence. Karen Metrakos, executive vice president of operations, with the full support of Downe and BMOÔÇÖs executive management committee, chose six sigma as a corporate strategic initiative for a newly consolidated Product Operations division of 3,600 employees providing operational fulfillment and after-sales servicing functions.Developed by Motorola in a manufacturing context in the early 1980s, six sigma is just as effective for improving any business processes, so it made sense to bring on board a business improvement expert to develop and execute BMOÔÇÖs first five-year deployment strategy. In May 2005, BMO brought in Richard Lam, a senior quality leader with many years experience in business process improvement and strategy execution, and a certified master black belt in lean six sigma, from a major US bank to develop and lead a quality & productivity management (QPM) center of competency from a green field. QPM now consists of 16 full-time six sigma master black belt and black belt professionals (mostly MBAs and engineers) trained in change management by LaMarsh Associates and provides lean six sigma services in both US and Canada across banking operations that in turn support all lines of business, including personal and commercial banking, private client banking and capital markets. The deployment mandate covered 19 operations centers in 10 cities in North America. Lam explains that there are many similarities between back-office operations in a bank and the jobs people do in a manufacturing plant. Having delivered six sigma deployments both at Ford Motor Company and Bank of America, he states, ÔÇ£I have worked in an automobile 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.ÔÇØ Quality is inextricably linked to standard operating proceduresÔÇöif you do the same thing in different ways, the results will varyÔÇöbut the first thing LamÔÇÖs team had to do was map the processes. ÔÇ£We had to build process transparency before we could even begin to introduce six sigma and lean thinking in the businesses.ÔÇØ 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, he says. At first there was overwhelming natural resistance to the deployment, he admits, but four years later there is palpable success, and recent international recognition and awards have helped to convert the wary. Demand now exceeds supply.The deployment team was challenged to deliver bottom-line results quickly while concurrently developing the required supporting infrastructure across product operations. ÔÇ£Lean enterpriseÔÇØ 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 TowerÔÇöone of the worldÔÇÖs tallest structuresÔÇöa significant environmental contribution for BMO.Today, LamÔÇÖs high-performing 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. This aggressive approach to six sigma deployment has enabled the team to reach its financial targets 21 months ahead of its five-year schedule. As the success of the projects became apparent, ÔÇ£pushÔÇØ became ÔÇ£pullÔÇØ 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 wouldnÔÇÖt want some of that in current economic crisis?The achievements have prompted a dramatic increase in training of six sigma champions, green belts, yellow belts and lean practitioners throughout the operations. ÔÇ£WeÔÇÖre really ramping up the training now,ÔÇØ says Lam. At the end of 2008, more than 1,200 people had been trained in QPM, and training is planned for an additional 1,000 employees for 2009. ÔÇ£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.ÔÇØAlthough 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: ÔÇ£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.ÔÇØ In recognition of its achievements, BMO collected the prestigious Platinum Award for the Most Outstanding Organizational Achievement at the WCBF Global Six Sigma & Business Improvement Awards in Orlando, Florida, in October 2008. The group also won the Best Achievement of Organizational Business Improvement in the Financial Services Industry, and Richard Lam was personally presented with the Business Improvement Deployment Leader of the Year Award. ÔÇ£It was an exceptional moment when we learned BMO was the recipient of these three awards,ÔÇØ says Lam, which augmented BMOÔÇÖs two international six sigma awards won in 2007. ÔÇ£These awards are truly attributable to the hard work and dedication of all our people at BMO,ÔÇØ he says, acknowledging that while leadership is the catalyst, operational excellence can only be achieved through consensus.┬á