UK: SUN LIFE'S NEW POLICY - RE-ENGINEERING. - Sun Life Assurance Society started re-engineering three years ago. Now the Bristol-based organisation exudes energy, enthusiasm and excitement about its re-engineering experience. An attitude which is indecen

Last Updated: 31 Aug 2010

Sun Life Assurance Society started re-engineering three years ago. Now the Bristol-based organisation exudes energy, enthusiasm and excitement about its re-engineering experience. An attitude which is indecently attractive in such an un-sexy business.

Managing director, John Reeve is the source of Sun Life's missionary zeal. At the end of the 1980s, recognising that tough times (more competitors, more regulation, more new products, more recession) were ahead, he ordered a radical business review. The findings were only partially encouraging. 'Industry surveys showed quality of service to be increasingly important to brokers. Our reputation was better than most, but our service levels were still only perceived to be fairly average. We were satisfying but certainly not delighting our customers,' says Michael Baker, project manager of customer service review.

Sun Life plunged into turbulent re-engineering waters in its quest for the delighted customer. In came consultants McKinsey and Hay to plumb the corporate soul. 'Where are we going?' 'Where is the industry going?' Next, they reviewed the core processes. The findings were disturbing. Issuing a new life assurance policy was a typical core process involving administrative steps carried out in different departments. No one, it seemed, was in charge of a process from beginning to end; each step was hampered by bottlenecks, ambiguity, delays and errors. A process which should have taken 15 days limped along for 46 days. Once a department had done its bit, the paperwork fell into 'black holes' of inactivity.

In June 1991, Sun Life began re-engineering its core processes in a two-year, three-wave programme. All processes were put through a six-stage wringer of documentation; analysis; brainstorming ideas; evaluating solutions; detailed redesign; and implementation. Tackling processes alone was not enough. Re-engineering without corresponding and supporting organisational change diminishes its potential to deliver. 'Our challenge', says Les Owen, director of the on-going BPR project, 'was to use business process re-engineering as a fresh approach to business needs, processes, organisation, people and finally technology. The objective was to be a pace-setter - to reshape the organisation into a more efficient and effective one but, vitally, one which has a predominant customer focus.' Sun Life's metamorphosis from an organisation based on functional specialists to one based on multi-skilled employees required massive restructuring.

For Sun Life's brave new world, redesigned, stream-lined processes were organised in one place around multi-skilled teams to ensure that responsibility for a complete, end-to-end process was handled in one place. Massive investment in training and communication programmes would broaden and enhance employee roles, responsibilities, skills and competencies. Sun Life's historic hierarchical seven-layer management structure was transformed. A pilot experiment in the 1200-strong customer service department slashed the multiple level hierarchy to customer service managers, team leaders and teams supported by two other roles: a dedicated trainer and technical expert. Team members, formerly skilled in about one-quarter of a process, familiarised themselves with the other 75%. New reward structures based on pay for competencies and customer-related performance measures were introduced. Convulsive change did not engender immediate convulsive delight. 'It was a painful process, especially at the middle management level where people well into their careers were asked to accept radical reform of the jobs they were doing,' says Baker. 'We had some fall out. Some did not want to be part of this new world' - ultimately a quarter of customer service managers left the company.

Corporate pain was not in vain. Baker is confident of a two or three year payback period. Already Sun Life boasts 40-90% improvements in process turnaround times; 10% reduction in the unit costs of some processes; and 50-80% quality improvements (work performed right first time). Sun Life confidently predicts a significant increase in job satisfaction among employees and greater customer satisfaction leading to increased business. Baker reports that the 'black holes' in one process, the Life New Business, have been filled - the process gallops along in 21 days rather than 46. Faults in the company's communication lines are being filled. Employees had a first annual general meeting this year. Peter Sissons has chaired an 'open house' no-holds-barred Question Time and videos, focus groups, attitude surveys and training seminars keep momentum high. 'We have an open style of management that was inconceivable three years ago,' says Baker.

Sun Life Assurance's road to re-engineered enlightenment sounds untroubled. It wasn't. Nor is the journey yet complete. 'Anyone who underestimates the size or difficulty of the task of making the organisation transformation will certainly fail,' says Owen. No pain, no gain.

Gains at Sun Life

40-90% improvements in process turnaround times.

10% reductions in the unit costs of some key processes

50-80% quality improvements (right first time work).

For further information on BPR contact Rohit Talwar, chairman, BPR Special Interest Group, Strategic Planning Society. Tel: 071 833 1002. Fax: 071 833 0897.

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