Applying Continuous Improvement to a UK building society

We interviewed Dean Williams, Head of Continuous Improvement and Operations Change, Principality Building Society ahead of his presentation to the BSA conference in May.

Streamlining systems and process to make them as efficient and effective as possible has long been a priority for any firm producing goods in a factory. As a result, over the last 100 years’ production philosophies like Continuous Improvement (CI), 6 Sigma and Lean Production (to name but a few), have all become common terms in manufacturing. But could these ideas be applied to financial services, and more specifically building societies?

Since the early 2000s UK financial services firms have slowly started to apply these techniques. Many large banks and insurers have already recruited practitioners from the manufacturing industry to apply these techniques. 

Principality Building Society started applying CI within its organisation 2 years ago. Its Head of CI and Transformation, Dean Williams, will be speaking on the second day of the BSA conference to give other societies an insight into what CI is and the tangible benefits it can provide to mutual organisations.

Williams describes the likes of CI, Lean and 6 Sigma as a “family of philosophies and methodologies” that come from the same origins. Each approach has its own distinct frameworks and tools, but each has the ultimate goal of making improvements for customers, reducing waste, improving quality while reducing time and costs. 

One of the key advantages of CI is its flexibility to be tailored to individual organisations, as Williams has done within Principality. “I studied the need for the society, its capabilities, culture, what it needs to achieve, and then adapted elements from different CI approaches to define the Principality way,” he says. But in terms of his own personal definition of CI, Williams eschews factory based descriptions of waste and cost cutting and prefers a more customer and people focussed concept. “For me it’s about continually making it better for customers, making it easier for colleagues to serve customers, which results in financial benefits and risk reduction,” he says. “And that can be achieved either via incremental changes or a transformation approach.”

Williams originally started out as an engineering officer in the Navy. He subsequently went to work in electronics manufacturing including Sony where he was one of the first wave of people within Sony to be trained in CI 25 years ago. The CI changes he introduced within Sony were so successful he was awarded the Sony Corporation President’s awards for Cost Reduction and CI Deployment Williams designed and applied changes throughout Sony’s operations, from the manufacturing floor to its admin functions, support and product design areas. So when he was head hunted by Lloyds General Insurance to apply CI in financial services, in many ways it was a natural progression.

His task at Lloyds was to keep costs flat whilst growth was being doubled and do it in a customer centric and colleague friendly way. Over a 3-year period Williams helped Lloyds General Insurance to achieve exactly that, with growth doubling and costs actually being reduced. He then moved to Lloyds Life, Pensions and Investments to deploy CI to help simplify the business and implement a new automated Business Process Management system. Following this he combined the CI approach for the newly formed Insurance divison and supported the development of the CI Service Excellence approach for Lloyds Group. He was then hired by Principality to apply CI to help the Society to “grow within its cost base”.

However, despite his successes in both manufacturing and financial services, he’s at pains to point out that CI is no quick fix to any organisation’s problems. “It’s not the sort of thing you can just read a book about and ram it in,” he says. Having seen many examples of these techniques badly applied and learning many lessons himself, he will be using his presentation at the BSA Conference to go through exactly what CI is and how building societies can successfully apply it.

So what are some of the critical factors to successfully applying CI? “The first one is that the CEO and the exec team absolutely buy in to doing it and understand what it can do to a high level,” he says. Number 2 is that CI is aligned with an organisation’s strategic objectives. “If it’s not aligned with strategy, it becomes a sheep dipping exercise,” he says. “The very first thing I did when I joined Principality was to create a strategic deployment programme for CI and agree that with the CEO and board. From that we agreed how we could deploy it over a 5-year period.”

CI has already led to an additional 35% capacity creation in Principality’s central IT functions. This has then been used to re-invest in transformation, with additional benefits in complaints handling, mortgage processing, savings and online. “What I want people to take away from the talk at the BSA’s Conference is a broad understanding about what CI is, what benefit it could bring to their organisation and a feel of how we’ve done it and how that could be applied to their own societies,” he says. As part of his presentation, there will also be video interviews with Principality staff on their experiences of CI and then a breakdown of how other societies could deploy it, irrespective of size.

Williams sees the potential opportunities CI could present to societies as huge, not just in terms of the individual organisations and the people that work for them but the societies’ members as well. “If you can make it better for members and easier for colleagues, it will result in cost saving or capacity creation – a win-win across the board,” he says.

By Robert Thickett, Policy Adviser, BSA