Many financial institutions have attempted lean programs of varied scope, but relatively few have achieved the level of success they anticipated. Some institutions have undergone process improvement programs (primarily centered on operations) and have realized limited benefits. Others have carried out comprehensive lean programs and achieved a true step change in some areas but fallen short of embedding the lean mindset in their organizations.
In our view, the most frequent reason for not reaching stated goals is an insufficient understanding of the journey that the organization must take to evolve into a world-class lean institution—a journey that involves driving true cultural change. Successful journeys start with setting up a comprehensive lean program and result in an institution whose DNA is fully infused with lean principles and a lean mindset.
What exactly is “lean”? As we have discussed before, lean is both a methodology and a management philosophy aimed at changing key areas of a financial institution’s operating model. (See Lean That Lasts: Transforming Financial Institutions, BCG Focus, September 2012.) Lean helps redefine processes, structure, functions, and organization. It also improves relationships with partners and end customers. In successful programs, lean becomes part of the institution’s everyday life, with clear benefits in key performance dimensions such as customer experience, capacity creation (greater than 35 percent), and operational risk. (See Exhibit 1.) In our view, the journey toward a truly lean institution consists of four critical steps.