From the Sponsor’s Desk – Fix the Business Process First

In my last post, 10 Project Management Practices Make All the Difference, we explored the practices that a project used to implement digital imaging in a highly successful eight hospital pilot.

In this post, we’ll look at how a team successfully turned around a broken and costly Group benefits new business process that was frustrating this insurance company’s customers and costing the company in lost business, productivity and escalating expenses.

Thanks to reader K.L. for contributing the details on this project.

The Situation

The Group benefits division of this medium sized insurance organization was experiencing considerable customer backlash over the quality of the newly issued contracts and support materials and the elapsed time required to complete the issue. This resulted in denied claims, incorrect benefit coverages and inaccurate employee booklets and drug cards. The situation had reached a critical point with a complete lack of confidence expressed by both clients and sales staff. As well, there was poor morale among most of the Group Insurance staff involved in the process as it appeared they “could never get it right”.

It was generally felt that the system used by the sales force for the submission of new cases was the main cause of the quality problems and needed to be improved and updated. However, the new VP who was appointed to oversee the Group Benefits operation did not want to embark on an expensive system replacement project without first determining the root of the problem. She was able to convince the VP, Sales to jointly sponsor a project to review the current issue process using the Tatham process methodology (similar to Six Sigma) to map and diagnose the root causes of the quality problems.

The Goal

The stated goal was to improve the performance of the new business process for medium and large cases to reduce customer complaints, improve cycle time and reduce costs, especially those due to rework.

The Project

This was the first time the organization had set out to review a process end to end rather than focusing on processes within the walls of the operational area. A stakeholder group was formed which included representation from the Sales offices, Sales support, New Business and Financial Underwriting.

The first step was to obtain feedback from current customers to find out what was most important to them. Accurate plan set up reflecting all their specifications was ranked as the most important with timely delivery of set up documentation as next important. It was an eye opener to learn that clients were not that concerned with how fast the plan was issued – they just wanted it right the first time!

As a result, the specific quality goal was defined as follows: “Quality of a new business issue occurs when the benefit plan meets the customer specifications”. This was a novel approach in terms of defining and measuring quality as historically the company had only measured quality in relation to specific internal new business processes that occurred after the submission of the case to head office.

With the focus on improving the end to end process, the project team proceeded to the next stage – mapping the processes, collecting data and performing root cause analysis. This took about three months and at the end, the team reached the following conclusion: there was little or no structure around the sales submissions from the field. In fact, most sales reps appeared to “do their own thing”. There was no single process being followed!

There was a lack of consistency in submitting the plan specifications and a total lack of enforcement and rigour in the New Business areas upon receiving incomplete sales submissions. This resulted in much “re-work” and back and forth between the sales rep and head office to clarify data.

The bottom line: it was estimated the 25%-50% of head office resources were devoted to re-work and represented a significant productivity issue. This analysis also confirmed that, indeed, process changes needed to be implemented before any future system and/or automation project should be looked at.

The Results

A fourteen step process called the “New Way” was developed and launched in the field and in head office by the VP Sales and VP Group Benefits. The new process affected about 300 staff in the sales offices and head office. A key step in the process required sales staff to meet with the client to receive sign-off for the plan specifications. It was also made very clear that the case would not be issued and all documentation would be sent back to the sales rep for completion of the missing information if they did not follow all the steps in the process.

In-process quality measures were implemented for completeness and accuracy of new business submission. A customer quality measure was also instituted to determine satisfaction level with each new business issue. Within 6 months, customer satisfaction increased from a baseline of 0 to 50%. Within 12 months, over 75% of customers were completely satisfied with the quality of the new business issue. Within 12 months, the issue “unit costs” were 30% less per case and the cycle time for a new issue had been reduced by 9 days overall, about a 20% reduction.

How a Great Sponsor Helped

Sometimes serendipity plays a key role in delivering a successful project result. In this case, the new VP of Group Benefits wasn’t immersed in the old culture, resisted the temptation to launch a system upgrade and insisted that the organization go back to first principles – what problem were they really trying to solve. She also took a number of other actions that contributed to implementation success:

• She ensured that the other stakeholders were identified and engaged. Without the Sales VP as a co-sponsor, enforcing sales rep compliance with the new process would have been difficult if not impossible. As well, engaging the clients in the process was an essential opening step.
• She ensured that everyone understood this was the top priority initiative in the Group Benefits organization to ensure the proper focus was in place and the right resources were available and committed.
• She contracted with an external organization that had proven capabilities to assess end-to-end process performance to manage the project. That included a “boot camp” for involved executives and staff to reorient their frame of reference from organizational silos to a process view.
• She demanded tight, three month time boxes for the process analysis and subsequent phased implementations to ensure a timely response to the customer satisfaction challenges they were facing.
• She established a few key metrics and measured and reported progress monthly throughout the organization to reinforce the importance of the change and the positive progress they were making towards their goals.

By focusing on these five key areas, the VP Group Benefits ensured that the organization was targeting the core issues, with the right players, in an appropriate time frame, with clear goals in mind. In fact, the practices that served this project so well will help any change initiative deliver more effectively. That’s why they’re also covered by Project Pre-Check’s stakeholder model, processes and Decision Framework. It is a great place to start your project and supplies a terrific oversight framework through to project completion.

If you can’t afford to rely on serendipity to get your project started right and guided to a successful conclusion, remember to consider Project Pre-Check’s three building blocks right up front and put these points on your checklist of things to do so you too can be a Great Sponsor.

In the interim, if you have a project experience, either good or bad, past or present, that you’d like to have examined through the Project Pre-Check lens and published in this blog, send me the details and we’ll have a go. If your project is selected and published, I’ll send you a free copy of my latest book, Project Pre-Check FastPath – The Project Manager’s Guide to Stakeholder Management.

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