Transforming expert organizations

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Think back 20 years. Buying a mortgage or filing an insurance claim was difficult and time consuming for almost everyone: days of phone calls and appointments, mistakes to correct, and duplicates to send in the mail.

Then a few leading companies started giving consumers what they wanted within days or even minutes rather than weeks. Faster processes also had to be more reliable and easier to understand. And now consumers can file a medical claim or apply for a basic loan with just a few taps on a mobile phone, and check the status at any time with a couple of more taps.

The value these leaders created was vast. For many of them, what made it possible were the four integrated disciplines of lean management. The combination of delivering value efficiently, enabling colleagues to contribute their best, discovering better ways of working, and aligning strategy and purpose to day-to-day work helped these organizations perform better on multiple indicators at once: shorter turnarounds and increased accuracy and higher employee engagement and faster adaptation to the digital world. Early leaps in performance were followed by consistent increases year after year.

What kind of value could B2B and other expertise-heavy organizations—from law firms or utilities to financial-information providers and risk-management departments—create if their processes were as transparent, reliable, and time sensitive as these consumer leaders?

Yet even organizations that recognize the threat from potential disrupters—particularly those offering the latest digital tools—often remain unmoved, citing the complexity and expertise that specialized sectors require. “We aren’t a factory or call center. Our work requires unique insights from experienced, credentialed professionals. Treating each project as unique is a big part of our value to customers.” That, in a nutshell, is why changing expert organizations is so hard. Despite what some may believe, what experts do really is a hard-to-define art—at least some of the time—and that makes experts skeptical of ideas that try to make their work more “efficient.”

Nevertheless, there’s also a science to expertise. That means that even in the most complex, bespoke projects, a lot of the work is actually standard—or could be. That’s where the insights underpinning lean management can help. The problem is identifying those standard elements, understanding them, and improving them, so that experts can spend more of their time on the art—while clients get an improved experience and the organization can improve its strategy.

Who better to solve the problem than the experts themselves? That’s what a few standouts have discovered. Aiming experts’ intellectual firepower at the organization’s own practices can lead to unexpected operational breakthroughs. A financial information provider, for example, took only four months to reduce its backlog of documentation issues by about 70 percent, and its time to market by 15 to 20 percent (exhibit).

Transforming expert organizations

Engaging experts and helping them work in this new way requires care. But the reward is a business whose clientele get even more of the specialized support they are paying for, along with customer experience that makes them even more willing to pay for it.

The view from the (expert) field

The fundamental change that an expert organization must make is in its experts’ perspective. Their perception of themselves as artisans affects almost every aspect of how they, and the businesses they support, usually operate.

‘Right’ and wrongs

Whether they are securities lawyers or financial analysts or electric engineers, experts are much more likely to identify themselves by their expertise than by their employer. As a result, they’re also more likely to pursue deeper expertise for its own sake. For the organization, the danger is that being right about a particular technical point can become more important to experts than solving whatever larger issue the organization is confronting.

At one corporate lender, for instance, experts from legal, finance, and other specialties were so intent on solving problems with their own assessments—which often depended on input from one another—that deals would be backlogged for months, even when a borrower’s assets and credit history were more than sufficient to justify the proposed credit line. Each group of experts focused on its own domain, with only a weak connection to the client’s goal (getting the deal done) or to other groups of experts. From the experts’ perspective, the risk of being wrong was far greater than the risk of delay.

The same bias can affect the structure of an entire operation. At a large North American utility, for example, each of its local offices was largely autonomous, with local leaders and “job owners” responsible for allocating work. The idea was that the “locals” had the deepest expertise in their market and geography, and knew their crews’ capacity the best. But allocating jobs at the local level left too little flexibility to accommodate natural, system-wide peaks and troughs in work supply and labor demand. Weekly and daily scheduling became highly unpredictable, and performance varied enormously: output in one area could be 50 or 100 percent higher than in another area, even with the same labor capacity.

The expertise silo

Over time, an expert’s isolation can become self-perpetuating. Because expertise is difficult for outsiders to understand, only experts can credibly lead experts. But their value to the organization as experts leaves them less capacity and fewer incentives to focus on general management. Instead, they focus on resolving the most difficult and complex issues that arise. Meanwhile, capability building usually follows an ad hoc apprenticeship mode—which is time consuming yet leaves little room for cross-training—and automation tends to be minimal (see sidebar “Automation lite”). The result is not just a silo but a hardened one.

That isn’t good for the organization—or even for the individual experts, who often feel frustrated by the bureaucracy they are part of. Continually struggling with antiquated technology, infrequent learning opportunities, and opaque processes takes a toll. And cancelling a vacation because you are the only person with the right expertise to answer an emergency client request is a heavy price for a seemingly guaranteed stream of work.

That dissatisfaction, combined with experts’ long-standing role as problem solvers, provides an opening for organizations seeking to transform themselves. By engaging experts in solving a problem that mainly affects them, the organization helps the experts discover new skills and working habits that are critical to untangling the complexity of their work. As the approach progresses, experts become leaders who can develop their colleagues’ capabilities, see how their work relates to the organization’s purpose, and—most important—deliver better results for customers (see sidebar “One culture, no exceptions”).

Testing a hypothesis together

What organizations often discover, however, is that experts at all levels are prone to some of the same basic problem-solving errors that bedevil almost all organizations: superficial analysis, failing to map out consequences, and implementing the first idea that seems to work as the final answer. From entry level to leader, experts will likely need practice in following structured problem-solving methods that are much more likely to result in long-term solutions. A large US-based financial institution provides an example.

The first attempt: Worse, not better

To engage expert financial analysts in problem solving, the first step the institution took was to ask them to identify challenges in serving the relationship managers who were their primary customers. The answer quickly came back, “Correcting errors in data generated by the offshore centers.” The institution then pushed the analysts to come up with ideas: “We need your input because only you have the expertise necessary to get to the heart of the problem.”

The initial solution was an extra quality-control step to check the offshore teams’ calculations. But once implemented, it exacerbated delays and occasionally introduced even more errors into data that supposedly had been double checked.

The second attempt: Preconceived ideas

Once the shortcomings of the initial attempt became apparent, the analysts’ leader proposed a different answer. The problem with the offshore data, in his view, was incompatible IT standards, with the IT platform as the inevitable solution.

Yet this solution was the product of an unacknowledged bias: the leader was aware of certain technical issues that were contributing to slow responses. He therefore defined almost every problem as having IT as its core, so that the solution would be a new IT platform that he viewed as a panacea.

The third attempt: Uprooting the real cause

A new IT platform would have required at least a year to design and integrate. The institution’s leaders asked for another attempt, noting that the first two lacked input from either the offshore teams—the centers the analysts had initially targeted as the source of the problem—or the IT staff.

The solution started by bringing representatives from all of the groups involved in day-to-day work—offshore and onshore analysts, IT specialists, relationship managers, and experts from related fields such as compliance and legal—together into a single team, a “virtual” work cell. Their mandate was not just to solve the problem but also to practice new behaviors: reliance on factual analysis, avoidance of blame, and deference to the expertise of the people closest to any given issue. That discipline allowed the team to keep pushing for underlying causes.

Together, they discovered that the data the offshore personnel were using was already compromised even before it arrived. After tracing the data back to a different division in the organization, the team developed a customized data feed that required very little IT investment and eliminated the need for the offshore specialists to check and adjust the numbers in the first place.

Once the cross-functional work cell had demonstrated its effectiveness, the experts continued to expand on their newfound capabilities. For the first time, they recognized that they were the ones responsible for making their process better—not their managers, or some remote part of IT, or the senior executive team. Process times for projects soon became 15 to 20 percent faster. Error rates fell by about 70 percent. And the work cell identified new efficiencies that freed up more than 15 percent of its capacity, so that later work cells could achieve the same output with fewer dedicated people.

Connecting to the customer

Building on this type of success requires an organization to foster a deeper understanding of the ultimate customer—not just the internal customer the experts see, but the customer the organization as a whole serves. For the organization, that means aligning the interests of the expert, the internal customer, and the external customer all at once.

At a Latin American asset manager, attorneys working in the claims unit helped assemble elaborate paper trails before the company approved routine payouts from investment accounts. Although the process protected the institution’s legal interests, the delays sometimes caused real hardships for clients seeking access to funds, which typically took months to complete.

To persuade the lawyers of the need for change, the company returned to first principles. Everyone agreed that lawyers had a duty to defend the institution from risk. But the categories of risk needed to be broader than the ones the lawyers typically focused on. Long, bureaucratic payout delays posed a reputational risk that, over time, was at least as material as the possible fraud the lawyers were trying to prevent. Moreover, the work they were doing took the lawyers’ time away from complex issues that truly required detailed legal analysis.

For the institution, managing risk appropriately meant devoting more attention to the cases that posed the greatest threat of incorrect payment. By reinforcing the lawyers’ value to that process, leaders were able to persuade them to adjust their priorities so that smaller, predictable claims could get processed much more quickly—from months down to a few days. The ultimate customer received a prompt payment, the institution received the risk protection it needed, and the lawyers were relieved from work that many admitted was not very interesting.

What if your clients could close their next deal in three weeks instead of three months? And you could give them a completion date with full confidence that your organization will be able to meet it?

What if you could be sure that there would be no compliance surprises, because all of the compliance was already built in to the way your organization works?

What if everyone working on a project—you, your team, your clients—could see the status of every task, continually updated, so that questions could be resolved as soon as they arose? How would that change what you do as a leader?

This journey is not easy. It requires substantial commitment, particularly from the senior team, to demonstrate the value of working very differently. But harnessing experts’ intellectual firepower to improve the way an organization does business is far too valuable an opportunity to overlook.

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