Bank of America Case Study
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- Category: History
- Date Submitted: 01/29/2010 01:35 AM
- Pages: 10
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We Needed a Change
Bank of America took its first tentative steps in process improvement several years ago, as business leaders within the company realized inefficient, error prone processes were costing the company money and generating customer dissatisfaction. In response, the company attempted to address process related issues using some of the methods popular at the time. But these efforts tended to be isolated, lacking systematic implementation and, often, key executive support. As a result, many people within the company dismissed these various process improvement efforts as the “flavor of the day.”
That changed in 2001, when then-new Bank of America chairman and CEO Kenneth D. Lewis announced a major strategic shift for the company, from growth through acquisition and merger to organic growth—acquiring, retaining and deepening profitable customer relationships.
Bank of America was positioned well. Its strategy of mergers and acquisitions had made the company a coast-to-coast powerhouse with significant competitive advantages, including a national customer base of 27 million households; small, middle market and corporate customers in the nation’s hottest growth markets; a diverse and stable mix of blue chip businesses; world-class executive management
and a strong focus on the bottom line.
Unfortunately, the company was not so well-positioned when it came to providing its customers with the kind of world-class performance that would lead to customer acquisition, retention, loyalty and revenue growth. Despite our earlier process improvement efforts, key process performance was still relatively poor, with many of our most important customer processes functioning with hundreds of thousands of defects per million opportunities. (Most of the defects were caught internally and corrected, but the rework involved added to our costs.) Customer delight scores were low, with only 40% of customers scoring their Bank of America experience a nine or 10 on a...
Bank of America took its first tentative steps in process improvement several years ago, as business leaders within the company realized inefficient, error prone processes were costing the company money and generating customer dissatisfaction. In response, the company attempted to address process related issues using some of the methods popular at the time. But these efforts tended to be isolated, lacking systematic implementation and, often, key executive support. As a result, many people within the company dismissed these various process improvement efforts as the “flavor of the day.”
That changed in 2001, when then-new Bank of America chairman and CEO Kenneth D. Lewis announced a major strategic shift for the company, from growth through acquisition and merger to organic growth—acquiring, retaining and deepening profitable customer relationships.
Bank of America was positioned well. Its strategy of mergers and acquisitions had made the company a coast-to-coast powerhouse with significant competitive advantages, including a national customer base of 27 million households; small, middle market and corporate customers in the nation’s hottest growth markets; a diverse and stable mix of blue chip businesses; world-class executive management
and a strong focus on the bottom line.
Unfortunately, the company was not so well-positioned when it came to providing its customers with the kind of world-class performance that would lead to customer acquisition, retention, loyalty and revenue growth. Despite our earlier process improvement efforts, key process performance was still relatively poor, with many of our most important customer processes functioning with hundreds of thousands of defects per million opportunities. (Most of the defects were caught internally and corrected, but the rework involved added to our costs.) Customer delight scores were low, with only 40% of customers scoring their Bank of America experience a nine or 10 on a...