When Bradford & Bingley, best known for bowler hats and mortgages, chose to hand over the selling of pensions and savings products to insurer Legal & General, the move was applauded as pragmatic. But the operational implications were enormous.
B&B lends more than £28bn a year to homebuyers. In contrast, its investment and protection business is worth £40m a year in premiums - a sizeable income, but investment and insurance products are costly to administer.
So the B&B board decided in mid-2004 to change the status of its 200 branch-based independent advisers to single-tie advisers who would be employed by an investment and insurance specialist.
The board told consulting firm Troika UK that it wanted a partner found, contracts drawn up and internal processes redesigned by January 2005, when the Government introduced new rules for financial services firms.
'Once we'd made the decision to go down the single-tie route, we were locked into the January deadline,' says Roger Hattam, managing director for group products at B&B. 'If we failed, we stood to lose one of our largest business lines in its entirety.'
B&B had already made contact with several potential partners, but Troika brought greater focus to the shortlisting process, helping the board define the key commercial principles they wanted the partner to meet. After four weeks, Legal & General had been chosen as the preferred partner but, with the clock ticking, the key to success was not to let B&B's tight timescales weaken its negotiating hand. The Troika team worked night and day to hammer out the myriad practical issues. Heads of terms were agreed in a fortnight, giving Troika four weeks to plan the transition, including dealing with all the HR implications and internal communications.
On 16 January 2005, B&B employees left their branches to return the following morning as L&G staff, carrying an L&G laptop and completely knowledgable about L&G products. One year on, B&B reports a doubling of the gross profit it earns from this product line and an increase in its sales-conversion strike rate.
Troika UK helped B&B strike a deal with L&G in just six months by maintaining a sharp focus. It led to a doubling of profit on this product line.
- Go back to the basics to establish key commercial principles.
- Speed up negotiations by spelling out as much of the actual contract as possible.
- Sit alongside the client's decision-makers to advise them on structuring the set-up.
Consultancy: Trinity Horne
Client: BT Retail
Briefed to introduce a performance management culture to BT Retail's online customer contact operations, Trinity Horne helped the telecoms giant increase productivity by more than 11%, giving 1,100 managers the tools and support to lead their teams and saving the company an estimated £20m a year in the process.
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