A synergy of people, processes and strategy is vital for the creation of a successful performance enhancement culture within financial services institutions, according to a new briefing issued by PricewaterhouseCoopers and the Economist Intelligence Unit (EIU). Business performance is and will continue to be a primary area of strategic focus for financial services executives but the PricewaterhouseCoopers briefing has revealed that satisfaction with the performance of specific business functions is generally low among many financial services firms. On a scale of one to five, with five representing extremely dissatisfied, almost every function achieved an average rating of less than 2.5, according to 227 industry executives surveyed as part of the briefing.
The study also revealed that performance improvement initiatives in financial services institutions are often poorly embedded into the strategic fabric of an organization. For example, 53% of executives identified customer service as a key source of competitive advantage, yet few respondents were extremely happy with the performance of the customer service function. To deliver ongoing improvement, the aims of performance projects must reflect and align with long-term strategic priorities.
Active leadership, rather than just communication to staff, is equally vital. When questioned about the critical factors behind successful projects, 65 percent of those surveyed identified committed involvement by senior management as being important. The commitment of senior management is particularly important when the focus of performance improvement is on front-office functions such as sales, marketing and customer service. However, the emphasis on performance improvement initiatives has traditionally been cited in the back office. To effect change in the front office, management must actively steer the process.
As part of the study, PricewaterhouseCoopers identified ten pillars of wisdom to guide the successful execution of performance improvement initiatives within financial services firms:
- Map initiatives across business processes and functions - improvements in one area depend on, or are manifested in, improvements in others.
- Optimize the speed and quality of management decision-making and measure the process using timely and accurate management data.
- Reward and recognize improved performance, both internally and with third-party service providers.
- Monitor success using non-financial and financial benchmarks.
- Create a permanent culture of performance improvement within the organization.
- Plan initiatives centrally across functions to maximize the impact of performance improvement projects.
- Prioritize initiatives to reflect the tactics and overall strategy of the firm.
- Engage the right people in the process -- specialized human capital will drive the performance improvement initiative forward.
- Focus on the customer's perspective to assess where initiatives will have most impact on competitive advantage.
- Identify and clarify the roles of stakeholders implementing the project from design stage to completion and evaluation -- create ownership and accountability.
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