Operations Isn't Spelled with a Capital 'O'

INTRO 

This is the OPS Game Changers podcast where we share real life stories from remarkable leaders that are transforming the world of service operations in financial services, healthcare and BPOs. In this series, we explore some of the key challenges faced by service operations as they strive to deliver more, more capacity, more productivity, and more business impact. In each episode, we delve into how these OPS Game Changers have addressed a key challenge or issue. Our guests share how they went about unlocking significant value, adopting best practices, and experiencing some game changing results. 

 

Bhavesh Vaghela: Hello and welcome to Ops Game Changers, the podcast that shines a light on the crucial role that operations teams have in driving business performance and improving staff and customer experience. My name is Bhavesh. I’m the Chief Marketing Officer here at ActiveOps and I’ll be your host. Now, in each episode, I hone in on one challenge that a business has solved, and delve into how they went about doing it and explore the outcomes achieved. 

Now, today, we’re joined by Dan O’Neill, an experienced banking Chief Operating Officer. Dan has spent over two decades transforming operations across some of the world’s leading financial institutions, both in the UK and Australia. Now, in that time, Dan has developed a leadership philosophy that challenges how we all think about operations and what it really means and how we need to evolve to drive successful outcomes. Now, before we jump into the topic, let’s welcome Dan to the podcast. Well, thanks for joining us, Dan. 

Dan O’Neill: Oh, great to be here and thank you for the opportunity. It was good to catch up with you. 

Bhavesh: So, Dan, before we jump into the topic at hand, you’re an experienced COO in banking. How did you get there? What’s your journey been like to get to being a COO? 

Dan: Well, I actually came from technology. So when I first started out back in London — and I won’t say how many years ago it was — I was actually doing desktop support for different trading floors in different banks and moving around. And one of the things that you learn on a trading floor, particularly with the banks back in those days, you find that the solution isn’t just in front of you. You know, the solution or the issue isn’t the desktop in front of them. You have to really understand what’s going on behind it. You have to understand where the data is coming from. You have to understand how systems work. And that gets you into end-to-end thinking, gets you into talking to different teams, gets you to understanding how technology works. Everything from a desktop to the applications, network to the mainframes and systems and so on. And that really intrigued me. That really got me interested about identifying problems and solving problems. 

And then when I moved down to Australia, which was 2005, I had the opportunity to move into banking operations, away from technology. And many people might say the same thing now, but I knew nothing about banking operations. But what intrigued me immediately was when I started asking about why things were taking so long, where information was coming from — very few people actually understood the flow. 

Bhavesh: And did you find back then, when you were in operations — that technology wasn’t as adopted back then in operations? Is that a fair assumption? 

Dan: It probably wasn’t as invested in as it was. I mean, everyone says “oh, it’s digital and I’ve digitized end to end.” You go into many organizations, and they’ve just digitized the front end. And really not the full end to end. So there was technology in operations, but it wasn’t what I would call sophisticated technology. Very few workflows were around at the time. Automation was there in bits and pieces. So yeah, it was a bit frustrating, particularly as a technologist, where I would sit down and I love sitting down with colleagues and understanding what they’re doing. And as a technologist I can’t believe you’re still using systems that way. It’s like, what if you’re using Excel when it first came out? A lot of people will still probably use Excel the same way as when it first came out, even though the features and functions have improved dramatically, because no one’s taught them how to do it and shown them how to do it. No one’s really truly understood what they were trying to do, and shown them how the new system can fix it. 

And it’s the same thing in many organizations. They plonk down some technology, they got a couple of hours training maybe, but they don’t really understand how they can fully utilize the technology that’s available to them. And so yeah, sitting down with people and understanding how they work from a technology point of view, I could see where the opportunities were. 

Bhavesh: Well, I mean, I was actually at a customer just last week and they were talking about that before picture being very much Excel based and that wasn’t that many years ago. So, they’re still heavily used in terms of that technology. 

So when you think about operations moving forward, and you’ve seen huge technology advancements in those 15, 20 years, it seems to be accelerating really fast, particularly with AI coming down the track. So when you’re now a COO, thinking about setting up operations for the future, how does that change your thinking from when you started to now? 

 

Dan: It’s just another new tool, if I oversimplify it. It is an amazing tool. I use AI every single day in the work that I do and in my personal life. And I think it can fast-forward a lot of the things that we’ve always wanted, but technology just wasn’t there — AI gives us that significant step forward. Particularly in things like knowledge management, problem solving, correlation of data, understanding where the information or the issues actually are. 

But it is just a tool, so it won’t solve everything. You still need to fundamentally understand what your business is. You still need to fundamentally understand what your experiences are, what your customers want. If you don’t understand the fundamentals of your business— 

Bhavesh: Then you have the same problem. 

Dan: You have the exact same problem. You just got another tool that gets thrown in. When computers first came out, it was a step change and people said “we’re going to lose our jobs.” And then it was automation. The problem then with automation is that everyone’s sort of using it, but not in a standard way. And then you have this proliferation of automation everywhere. End-user computing is one of the pain points for many financial institutions currently. AI is in danger of doing the same thing. So you really need to put some really strong governance and standards around it if you want to take advantage of it sustainably going forward. But it’s early days, and I think that’s where the biggest danger is — that people are fast-forwarding trying to utilize AI, but not in a standard way across the organization. 

Bhavesh: So you end up with the same problem as you’ve just described. 

Dan: It will be multiple versions of different AI models, not knowing where the AI models actually are, not knowing how to govern them, not knowing how they’ve changed — to me, that spells remediation in the future. 

Bhavesh: And when you’re thinking about it as a COO, what kind of stuff keeps you awake at night? What do you worry about these days? 

Dan: I worry about the stuff I don’t know. Known problems have known solutions. It’s the unknown. So as an operations leader, I always worry about the queue that’s not being monitored. I worry about the change that hasn’t been fully understood. Because those are the things that aren’t in your control. Once they’re in your control, you can actually do something about it. So it’s giving yourself the comfort — and also giving the executive team and the board the comfort — that actually, we know what’s going on in the most important parts of our business. 

Bhavesh: That’s a good segue to the topic for today. So you talk about operations and I guess we should unpack that a little bit. It’s a philosophy that you’ve built up over time in your roles as COO and in operations for these last 15, 20 years. So what do you mean by “operations with a little o”? What’s that all about? 

Dan: Yeah, it’s just that in an organization we divide ourselves and we put a structure in place and we say — front office, sales, product, Operations with a capital O. And then we get given these directions from different parties, whether the board, Exco, or even the regulator, saying “improve performance” — and off we go in our little divisions with different standards, different metrics, different ways of talking, different interactions. And when a problem occurs, the company brilliantly comes together and fixes the problem, but then disappears back into divisions as normal day-to-day practice. 

So what I mean by a little o is — the business is operations. From a customer need to a customer outcome, how does the work flow? What are the things that are most important to us that we must work together on and understand every single day, flowing through all those divisions? That’s what operations actually is. So when people say “you’ve got to improve the performance of operations,” I ask the question — are you talking about the capital O? Or the small o – operation? Because if all you’re doing is talking about the capital O, you’re looking in the wrong place. 

Bhavesh: Because you’re in a silo. 

Dan: Silo thinking immediately. And my experience in operations is workflows in and workflows out. And I’m not saying there aren’t always opportunities in operations — of course there are. But at the end of the day, a customer typically comes in through other parts of the organization, whether it’s online, whether it’s an app, the frontline, wherever it may be. And so you have to understand the need from the beginning and make sure you’re giving the best service all the way through, rather than just when it happens to hit a certain division. 

Bhavesh: Do you think part of the problem is the word “operations”? 

Dan: Oh, it could be, but the language is the thing, right? And I could change it and come up with some other wonderful name. But at the end of the day, someone else will still call it operations. So I don’t think the naming is the problem — it’s the way we structure and how we report. So you know, if you look at the reporting that typically comes out in an organization — you get your financial reports by division, your culture reports by division, your risk reports by division and so on. So we force this thinking into an organization versus actually saying — where are the most important things from a customer perspective or a staff perspective? How does that flow through the organization and how do we improve it? That’s actually how the company works. 

Bhavesh: So I mean, it’s really interesting because you at a certain level you’re talking about, you know, customer experience targets and, you know, employee experience and you know, risk and cost and all those elements that are more macro level. So those kind of KPIs exist, right? But I, I guess the challenge what you’re talking about is they, you’re just looking at an isolated component of it and people, somebody sitting in operations doesn’t think about the full end to end. Somebody sitting at the front is only focusing on their bit and not connecting the whole job to get.  

 I’m fascinated by that. When you go into a boardroom and you’re trying to explain to your C-suite colleagues — your CFO, CEO — that somebody needs to take ownership of this end to end, how does that conversation go down? 

Dan: You get wry smiles or laughter. Some people not looking you in the eye. And it’s a serious conversation. In the majority of organizations, that’s probably where the biggest challenge is — who actually owns that process, that experience, end to end. And I think you have to think about things that way, because every value you create, every experience you provide, every need that you meet is through a process, an experience. It’s just the way of life. And so we fool ourselves if we think we’re going to solve it the same way we’ve been trying for years and years — through this divisional cycle, through projects. And when I hear about a project going live or being initiated, I go — okay, so what happens at the end of a project? 

Bhavesh: We stop it, don’t we? 

Dan: Yeah. Then what? It goes live, everyone gives each other a high five. And then six months, nine months, twelve months later you’re looking — where are the benefits? Has the business case really delivered? And all the people who were involved in it have gone or moved on or disappeared. And so how do you know things have been sustained and embedded? So you have to think about things differently. The biggest challenge is who is the owner of the process. And that’s where we have to spend most time — and more importantly, what are the key processes that we really want to focus on? And then let’s agree about who the ownership will be across that C-Suite. 

  

Bhavesh: And did you get pushback from the C-suite, or is it almost obvious when you think about it? The logical thing to think about is the end to end journey. People have been talking about end-to-end journeys — it’s not a new concept. You think the successful organizations are more joined up than others. So how do you convince them? Because it’s a cultural shift, a mindset shift. 

Dan: Cultural, behavior shift — exactly that. But the problem is we’re set up, as I said earlier, that way. The reporting we do is still set up by structure. And I understand it. If someone came to me and said “you’re going to own this” — I’d go, well, what do you mean? My KPIs aren’t aligned to that, my reward system isn’t either. Those are two key things you’re going to have to start changing and thinking about. And then the reporting itself — to truly get that cross-divisional view, you literally have to pull it together manually. And by the time you do, it’s out of date. So you’ve got a lot of blockers. This isn’t a case of — I’ve got an owner, problem solved. You really have to get buy-in from the organization saying:  yes, we do want to move towards a customer experience or process experience view. What are the mechanisms and standards we need to move and transform towards that? Then demonstrate some quick wins and some ongoing sustainable wins that allow you to embed it. 

Bhavesh: In your experience, in your journey, was there a key moment that was the epiphany — hold on a second we need to think about this differently, that shaped this thinking? 

Dan: Yeah. I’ve been in organizations that were very siloed and had some major regulatory issues. The regulators came in and said — you need to start thinking end to end. We demonstrated how we were thinking end to end, and the regulator said “about time.” This was at a bank many, many years ago. And that bank transitioned itself to end-to-end thinking. And the moment I knew it had been embedded in the organization was when the CEO started talking about it at broader executive team meetings — not just his direct teams, but across the organization. When the CRO started talking about end-to-end thinking and process management, and I wasn’t the one saying it, then I knew we were getting there. It’s part of the language — therefore it’s part of the mindset. And that organization has gone from strength to strength with that type of thinking. 

Bhavesh: Was there a moment where two departments started to work closer together — one of those quick wins you talked about — where you thought: yes, this is really going to work if we do this properly? 

Dan: Yeah. There was a particular product — home lending, in retail banking in Australia. I was leading operations for the bank. And you’re given typically every year some investment to make. And the push is always: automate everything, straight-through processing. And the organization hadn’t gone down the end-to-end view yet — it was prior to me really becoming the Chief Process Officer for the organization. So we were still very silo-thinking. But as part of the exercise, we pulled together what the true end-to-end view actually was. And it was very difficult getting that because data standards were different, terminology was different. Trying to understand what the process was and what the metrics were took some time. 

But we got there by getting all the teams together, and we clearly demonstrated that automating certain tasks in operations — whilst it would improve some turnaround times, which is always good — it actually never improves the customer experience, because it was only a small proportion of the overall time. So rather than automating what was in operations — because we’d all think we’re brilliant for having reduced turnaround time, and there are some benefits in there — why not invest further up the value chain and dramatically change the customer experience, improve the conversion rate, and lower operational risk because the quality and completeness of data was improved? And we saw conversion jump by nearly 50%. We saw turnaround time dramatically shrink, particularly for decision time. And it was more scaled.  

So we invested in the right place because we understood the end-to-end view, versus only understanding the data we had to hand. You need to go out, take a risk, work with the product teams, the frontline teams, and the data teams, to collate and understand the data together and make the time to do it. I remember people telling me “you’re boiling the ocean.” I said: no, I’m just bringing islands of data together to make sure we actually understand what we’re supposed to be doing.  

Bhavesh: And I think that’s really interesting — the key is the data, isn’t it. The visibility of it, connecting it, and then understanding it. 

Dan: Data is obviously a key point because you need to demonstrate the effectiveness and the benefits. But I’ll always say the most valuable way of understanding what’s really going on is going out there, talking, listening, and observing. Come out and have a look in the operations center. Go out to different branches or the frontline, listen to call centers, speak to customers. I want to see what they’re doing, what they’re feeling, how they’re thinking, because that actually tells you what’s really going on. How frustrating is it? Or “oh, I know it’s going to take a long time because that’s just the way it is and they’re just resigned to it. 

Sit down with your colleagues in operations or the frontline and they’re going through multiple screens just to do something really simple. Why are you cutting and pasting all this data around? And I saw someone doing the same job and they were checking it. Do you understand that that’s a control? And that’s really important — the quality and completeness of that is key. But you’re not doing it, but someone else is, so you don’t have a shared best practice. Those insights are more valuable than anything you’ll find in a report. 

You get lost in a meeting room, you get lost in a boardroom with data and presentations, because you only understand what you’ve been given. And sometimes you need to break that mold. Yes, it takes time. It takes effort. But that’s what we’re here for. 

Bhavesh: One of the things you talk about is high impact processes. You mentioned something like 15 to 20 high impact processes in a typical bank. So you’re not actually trying to solve everything — you’re solving ten or twenty processes, one at a time. So what does a high impact process mean to you, and how would you go about identifying one? 

Dan: Yeah, the best way of thinking about it is — what are the processes that, if they were to fail, are going to cause the exec team or the board the biggest issues or discomfort? There are thousands of processes in an organization. And when people start looking at performance or efficiencies, they think “let’s go out and map all the processes.” That’s actually not the answer. The answer is to say — what are the things that are most important? What generates most revenue, most cost, most risk? Where do customers touch the most, and where do staff touch the most? So a high impact process is a combination of both customer-facing and internal. 

It could be anything from expenses, onboarding a staff member. When you join a new organization, it can always take ages to get your laptop or access to systems. You’ll have a breakdown there because someone’s done the recruitment, then you’re onboarded, they get these different contracts in paper form, you’re physically signing, then someone hands off to someone in technology, then they’ve got to order a laptop, someone else orders a phone — it all takes loads of different time. And everyone’s looking at the metrics of “we hired people” and “we recruited people,” but they never look at how many people they interviewed and how many people they responded to. One of the biggest complaints when you’re looking for a role is that people don’t get feedback — which impacts your brand. There are so many different metrics just in onboarding a staff member from an end-to-end perspective that I would say 99% of organizations do not understand. 

Bhavesh: And when you join a company, do you instantly know there are some challenges there? 

Dan: You do — you get a feeling for it. So when I speak to new recruits, that’s the question I ask: how was the onboarding experience, right from the interview right through to the end? Because then you get a real flavor of how well the organization is connected. 

And expenses is another one that can be painful. Most people in an organization use expenses  so if you don’t make it smooth, the more time they spend on expenses, the less time they’re doing the actual work they’re there for. You’ve got to make it so the real stuff they should be doing on a day-to-day basis, they can do it without thinking, so they can spend most of their time thinking about how to improve things. That’s the goal of any operations leader with a small o. 
And so other things that would be in an organization, you know, what are the key products that you’re selling? So you know, in a bank will be home lending, commercial lending, payments and so on. They’re key processes that you have. So it’s not just the external customer ones, it’s also the internal ones as well. And you know, good friend Roger Tregear will always say managing a process is also a process itself. And so you need to be an expert in that as well. 

Bhavesh: So is that one of the ways you get buy in from the C-Suite and other parts of the organization by getting them on the floor and seeing actually what’s going on? Is that one of the ways, the kind of the key moments of, Oh my God, this is what’s going on? 

Dan: Yeah, it’s one of the tools of the trade, and one of the things you just need to do. Unfortunately, I’ve been in many organizations where I’ve said that to CEOs and there’s resistance. Some C-suite don’t feel they can go because they don’t really understand the work itself. And sometimes people don’t want to understand the issues and challenges, because then they know they have to do something about it. 

It goes back to what I call conscious decisioning. I love to force people to consciously think about the end to end, understand what’s really going on, so that when they are making a decision about prioritization, or funding, or change 

Bhavesh: They do it with their eyes open. 

Dan: Eyes open, understanding what the impact could be and whether that’s the right prioritization. I feel for the C-suite and I feel for the board, having come through the different layers of an organization. When you get there, you get given these papers with different terminology, different standards from different divisions, talking about a specific problem and you’re going, how does this fit into the strategy? How do I know that if we do this, it actually moves us forward? And so one of my roles as a COO is to make that simple for people — to make it easy for them to make the right decisions. 

Bhavesh: Just thinking about the COO role then I mean, you’ve probably seen and you’ve changed the dimensions of what that looks like from a traditional COO to COO today, because you are thinking about the overall end to end. And do you think that the, the technology advancements of workflow, RPA, process analysis, process insights, all that stuff almost forces people to think in that silo rather than thinking in a, in a broader way? And then you end up with COO s who want, haven’t got the right mindset to think about in a different way.  

How, how, how, how do you, how do you make sure that you know, you, if you’re going to hire a COO, how do you make sure you got the right COO? Just going to think about it inside a different way for you. 

Dan: Well, the CEO is going to need to think that way as well — otherwise they’ll never identify the COO they want. And going back to an earlier point, we still don’t help ourselves by allocating funding by division versus allocating funding by the things we really need to protect and improve from a reputational, revenue, cost, and risk perspective. It really has changed. I know I make this sound easy — it’s not. It is a major culture and behavioral change. And your role as a COO, I think, is as a change agent first. You’ve got to think about it that way across the organization. If you’re labelled as the Chief Operating Officer, you’re not just an operations leader. Yes, it’s the Chief Operating Officer and we call it many different names across the industry. But at the end of the day, particularly if you’re coming from an operations perspective and a technology perspective and I’m lucky to have both in the armory, then you can only think systems and enterprise wide. 

Bhavesh: And that’s probably a difference, isn’t it, in terms of your technology background probably lends itself to thinking so differently than maybe a traditional ops person who’s come through the journey and become a COO. 

Dan: Yes, yes, it does — because it forces you to have systems thinking and forces you to have enterprise thinking. You can’t isolate just where the problem is. There are upstream and downstream links. You have to think enterprise-wide.  

It used to make me laugh when we talk about BCP and they go, here’s our critical system that might be a mainframe or, you know, back in my day, a data general thing, They say the BCPS, this is a critical system. And I used to ask, but, but that’s just getting data from another system. And if that isn’t the critical system as well, then how can this one box be isolated? You know, if the other boxes and systems and network failed around it, then this thing wouldn’t work. And they go, Oh yeah, but if we have to make all those critical systems as well, then the cost and effort and they’re going, yeah, but it doesn’t make sense if you just have one. It doesn’t work that way. 

In the same way I say, well, e-mail is not a critical function. And they said, Oh no, that’s just communication thing. And so I’m telling you, if we had to go down and we can’t access the e-mail or we can’t access our shared folders, if you telling me they’re not critical systems and I don’t know how you work, right. So things have progressed and moved on, but you have to think enterprise wide. 

Bhavesh: But you know, when you think enterprise wide, one of the things that I find fascinating is, I mean, as long as I’ve been in working with technology companies, working with customers in banking and other industries, you know, things like transformation have been constantly ongoing, right? Organizations are constantly transforming. And in some ways, what you’re describing is a big transformational change for the organization and what they’re thinking about. 

But yet most of these fail when we know the failure rate for transformation programs is really high. I guess part of that perhaps is a little bit of the thinking there in terms of how you measure the outcomes end to end. And is it because the transformations are still focused on silos of change? Is that one of the major reasons why perhaps I don’t get the outcomes I need to be? 

Dan: I think there are many different reasons, could be anything from culture, behavior. But one of the common ones I see is that it becomes a project, and people fixate on milestones or an end date. 

Bhavesh: They finish and move on. 

Dan: Oh yeah. And they also forget about what they’re actually trying to improve. I’ve seen many brilliant, very disciplined project managers go — “but we’re delivering this.” And I say — yeah, but the business has changed and this doesn’t actually improve it anymore. So we’ve got to fundamentally change the project. And they go — the project is going live here, this is what we need. But if you listen to what I’m saying, it’s not improving the underlying business.  

And so the structure and governance of the project is wrong — because it’s fixated on a date or a delivery, versus being fixated on what it’s really trying to improve , what businesses is it improving and how it’s going to be embedded. 

One thing I was taught very early on — if you’re running an operations division, your role is to run it and change it. And so a transformation program needs to be owned by someone. If it’s fundamentally changing a key high impact process, then the owner of that high impact process needs to be the owner of the transformation — and they’ll be the ones held to account if it doesn’t truly move you towards the target. 

Bhavesh: And logically, the owners would be on the business side? 

Dan: Yes. That’s the way. It’s a business-driven approach. 

Bhavesh: I own the end to end of, say, my mortgage business — which means that individual has to know how to work with all parts of the process, all departments, to connect it up. And that’s where the COO and the operations team, in its traditional sense, has a lot of input towards what that end to end looks like. 

Dan: Yes. And the best transformation programs I’ve seen are where they are owned by the process owner — whether it’s home lending or commercial lending. There’s many great examples around in the industry and some of those people have come on to gone on to be CEOs of other banks and what they’ve done, they’ve owned it end to end. And as an operations leader, I work with them and we say, OK, what are the things that really going to transform this organization, whether it’s in my division or whether it’s in risk or whether it’s in the product or whether it’s a technology solution and they own it. 

The key thing in the methodology I roll out as part of the high impact process is that the owner sits with the end-to-end value chain and understands the performance of that each month at a minimum, at a minimum,  with the decision makers. So projects can feed into it and say — here’s what we’re doing, this is what’s going live. The process owner understands the current metrics, they understand what the target metrics are and as well as running the business and seeing what’s going on in business as usual, which is constant change as well. The project is feeding into it and they can manipulate or direct the project where it needs to if things need to change. 

Bhavesh: So it’s more fluid in that sense. 

Dan: And that’s how you run your business. So I get there’s the structural team stuff that people still need to do and the force that we have about managing costs and budgets and so on. But if you don’t have — at minimum once a month — the decision makers across the entire flow understanding what’s going on with that flow, first of all you won’t get sustained performance, and second of all you won’t find the problem before it creates itself. Because if you’re looking at the trends — customer trends, staff trends, risk trends, near misses, costs and so on — you can spot things easier and earlier. If you’re looking at month by month basis. You’re not just waiting for the problem to occur and then getting together. You’re actually saying — no, this is a common gathering we have, a conversation we have. And then you’ll get to know the process better, you’ll get to know where the different trends are. You won’t react to things that are just going wrong because you’ll know — oh no, that’s seasonality, that’s okay. You’ll get better at forecasting. And you’ll have much better conversations like this. It’s not just about the reports you send out, but about where do we really need to prioritize ourselves? 

Bhavesh: So in the paper you talk about the seven pieces of advice that you give in terms of seven ideas that you should think about, one of them being this idea of flipping from transformational delivery to absorptive capacity. 

Dan: Yeah, so it’s basically about how you manage the flow on a constant basis. Typically a problem occurs, we all get together, fix the problem, and then off we go in our separate ways. Or if you are talking about a flow, people have conversations one-to-one with different parts of the value chain and try to understand that. Is everything going okay and so on and so forth. But again, isolated conversations. 

Running your business is about that end-to-end side. My personal view is that this is hard to do — and I’ll admit, I haven’t got this perfected yet. But when you are having multiple projects and changes, you know my view is you don’t have multiple Steercos that so those projects and changes go flow up into that end to end process owner. Because at the end of the day, it’s their business. And at the end of the day, they should know what the current metrics are and what the target metrics are for the next three to five years. And so anyone making a change or doing anything in that flow — if they can’t convince the owner and demonstrate with evidence that they are moving them towards the metrics of the future, then they shouldn’t be doing it. They shouldn’t be investing, they shouldn’t be making the change. And to me, that is what adaptive management is all about. 

Bhavesh: Do business owners have the skill set to think end to end? But also they may be forced to think about it that way with the adoption of, I mean, let’s say AI agents, right? It’s fundamentally what you’re describing there is understanding all of those elements that give you your end to end journey, right. And so therefore, the, the business owner has to have a, there’s probably a learning curve for them in terms of getting to this thinking, but also the next three to five years of how that’s going to accelerate very, very quickly. 

Dan: Yeah, it does. It’s a different skill, a different capability — it is a completely different mindset. And we haven’t been trained or educated that way. We’ve been forced to think from a divisional point of view. We get it every now and again, we think about it when we get the opportunity to, but then we go back to our silos because that’s just the way the system works. 

So I think we have to create the environment for people to be able to grow and think that way. But also set up a structure and governance that actually forces people to think that way as well. And it is a hard muscle to grow. And it’s no one gets it perfectly from day one. A lot of people — some of the best people I’ve seen doing this — go “that’s quite difficult. They don’t report to me. I haven’t got full control. It sounds like I’m doing all the work. It’s not in my KPI.” And I go — just give it a go, get these people together once a month. Have a conversation. Get the reports together. Just start talking about what’s your biggest problem, where’s the biggest issue, and how do we together, as a value chain, prioritize what needs to be prioritized? Start having that conversation. 

What I’ve found is that the best people who’ve implemented that go — “oh my God, I get it now. I actually understand where I need to focus.” 

And to me, the best result is — particularly in the banking world — when the regulators come in and the first thing they’re going to ask is: explain to me the end-to-end process, explain to me the end-to-end risk and controls you have, what are you doing about it? And the owner, with confidence and with evidence. 

Bhavesh: Can just tell them. 

Dan: Yeah, absolutely. I’ve been in organizations before where they know the regulator’s coming in — they panic for six months and pull all these maps together and documentation together and these experts in the room, and they talk about it, and the regulator goes away, and then they all disappear again. What a waste. I’ve been to projects where they’ve spent millions of dollars mapping out processes, implemented a new system, and then all the processes are never touched ever again. Seriously — what are you doing? 

Bhavesh: So common. It’s only over the last 10 years. You would imagine when you walk into an organization, it’s going to be similar to that kind of environment.  

Do you think this way of thinking is going to become even more important over the next three to five years? Almost a survival thing if you don’t think this way? 

Dan: Well, I think with the technology age that we’re in, with the adaptability, you have to demonstrate the math at the end of how fast change is occurring. You know, if you don’t understand the underlying organization and how it works and how it flows, then you’re a danger of making the wrong decision, making the wrong prioritization, and breaking something more often. 

You know when things are going wrong — when you’re spending significant amounts of money on remediation, when your complaints are going up. 

So organizations need to be quite honest with themselves. One of my mottos is: for things to change, first you must change. If you keep on doing things the way you’ve always been doing them, you’ll get the same outcome — just with a new tool. So you’ve got to go — how do I shift this now? 

It’s not a you can’t automatically just go with it because the underlying way the organization works can’t just change within a couple of days or weeks or months or even sometimes years.  

But the mindset, the behavior, the language — that can start changing from day one. And once you start doing that, once you start talking end to end and start challenging people — have you understood the upstream impacts? The downstream impacts? Is this moving you towards the targets and metrics where you really want to go? Can you clearly evidence and demonstrate that? Those basic questions that force a lot of people to think differently, immediately. 

Bhavesh: If you had a roomful of COOs listening right now, what would your advice be? What would you be the first three things you need to do or what would you think would be the way to start? 

Dan: Well, what a question. Where do you start? I’ll give you a consultancy answer — it depends. If they have a major problem somewhere — and typically as a COO you’d be aware of where the problem is — you go, okay, how do I fix this? But with enterprise-wide thinking. Because you’ve got to get some wins on the board as well, to demonstrate that a different way of thinking is important. 

If it’s an organization that’s working really well and people go — why change, why do something different? You say — because we have to adapt, we have to think, and we have to utilize the technology better going forward. So let’s understand what those core processes are. Let’s be preventative versus reactive. 

So it depends. But the most important thing is — do I truly understand customer need to customer outcome? Can I draw that out? And more importantly — if I had ten people from the same organization and asked them to draw it, would they draw it the same way? More than likely they won’t. 

Bhavesh: Almost guaranteed they wouldn’t. 

Bhavesh: So you said something earlier on which is quite interesting is that you know what? There was something you said earlier that stuck in my mind — about automation. So the reason it sticks in my mind is because that’s where so much focus is in the past, but also in the future, right? And that’s what AIS in theory coming in to do is to automate more things. But you mentioned something earlier on which is sometimes automating is not the right thing to do.  

And, you know, so talk us through that a little bit more. What’s kind of examples of where you’ve seen that? Because the obvious phase is let’s just automate the stuff that, you know, is the easy things to automate and it’s not automating the things that are perhaps taking the most effort or the biggest pain in your process. Do you find that when you’re in in in an organization, that’s the way the way people think? 

Dan: Yeah. People say “just automate everything.” Okay, fine — thank you for that. It’s like asking how to make things more effective and being told “ask people.” Every time: oh wow, hadn’t thought of that. “Automate everything” or “straight-through processing” — those are throwaway terms. And now it’s “how are you using Gen AI?” Same thing. 

The right answer is — where do we need to automate, and why? What impact is it actually having? And how does that move us towards our metrics — customer experience, staff experience, risk and controls, revenue, cost. If you don’t understand what your current metrics are in that environment and what your target metrics are, then why do you know this change is the right priority? 

Too many times when you go into a process — whether through process modelling, task modelling, Six Sigma, a Gemba walk. But the challenge is, you can probably see something in the capital O operations where they’re doing loads of manual work, and a lot of it might be checking or putting controls in place. So the instinct is — let’s automate that and save some FTEs. But if you look further upstream, you’ll probably find the same checks and controls are in multiple places — you’re doing it many times over. I’m a big believer in less controls the better — it’s like the faster you go in a Formula 1 car because you’ve got really good brakes. Always go further upstream and ask — what’s causing all this checking? How do you make sure that whoever is putting data in is doing it with completeness and the highest quality? 

Once you can guarantee that, you don’t need the multiple checks all the way through. So it’s about understanding what’s really going on, where it’s going on, and where you can make your impact. Then you can map out the process and ask — is that the right flow? Can we deviate at the right place, is the variance minimized? That’s the most efficient way to do it. Now we understand the best practice. Then let’s automate it. 

It’s a bit like outsourcing. If people say “are you a big believer in outsourcing?” I say — it depends. It’s a skill or capability you don’t need, or something you’re going to replace in the future, if they can clearly demonstrate they are way better than my best practice and at way lower cost. Unless someone is a true master at it, there’s no way you should be outsourcing something — because outsourcing a problem just creates a bigger one. 

Bhavesh: It’s interesting. I was talking to an insurance company in South Africa recently and they were specifically thinking about where to add people — to make sure they had the right customer experience at the right touchpoints — and which areas to automate. Which was really refreshing, because usually the starting point is “automate to remove people.” I think we’ll come full circle, we’ll end up with people at the points that really make a difference for the connection with the brand and the service you’re trying to bring. And that’s what you’re describing. 

Dan: It is. You’ve got to figure out where the best use of your resources is to give the best customer experience. Some customer experiences — they want something really fast, really quick, self-service. And I need to provide that service and make it as easy as possible, because then they’re satisfied and we’re doing it in the quickest, most cost-effective way. And there are other services where there are exceptions, problems, they want guidance, or it’s very sensitive and they need to speak to an expert — and we need to identify who that expert is as quickly as we can. That really helps not only the customer but reduces loads of handoffs within the organization. 

So giving guidance is the most important thing we as an organization should do. And I think that’s where AI really comes to the fore. Most people forget what to do, how to do it, then spend too long trying to figure out where to get guidance, and they give up. And that’s why you get so many errors in the process — because people are shortcutting. AI is brilliant, if you layer that over your knowledge management systems, identifies where the conflicts are, and it gives you that conversational piece — “I’ve got a customer here who wants to do the following, what do I do?” And it comes back: here are the five steps you need to take, here are the references to the detailed procedures if you need them. 

And my personal view, based on evidence from where this has been rolled out — you’ll see complaints reduce, you’ll see errors reduce, you’ll see non ending losses reduced if you’re in banking, you’ll see staff engagement go up because the job has become easier. And they can actually deal with more customers because they’re not searching around for what to do or how to do it — as long as the knowledge management data is kept up to date. But again, AI can help you do that too. 

Bhavesh: There’s no podcast today that doesn’t ask the AI question. And I suppose boards are asking it too. I mean, machine learning has been around for years and has been an organization for many, many years. But the more new, newer Gen AI, the agentic stuff is where people seeing as that silver bullet to change. When you’re in those C-level conversations, how do you frame the use of AI for the organization? 

Dan: One is working with really good partners. If we think we want to be the experts in AI, we’re in the wrong business. There are experts already out there. Partnering with the right people — whether it’s in scams and fraud, credit decisioning solutions, document management, knowledge management solutions. Workforce management, as you know, is another critical area where it can make a significant impact. So first of all, figure out who you want to work with and how you want to work with them. 

And second of all, internally — it’s a bit like when we had RPA. Where do we think we can automate? Where do we think we can improve? The people who are really interesting are the ones already using AI and who can already see how it could improve their role. So to me it’s just another tool in the armory. When you’re doing a PDCA, or doing the five whys, or a fishbone — normal continuous improvement — ask the questions. Have you seen anything where we could utilize AI? How do we experiment with that? But importantly, you need some governance. Standards. You don’t want another challenge where you have hundreds if not thousands of end-user computing solutions out there everywhere, causing big problems — and that’s not only a governance and technology risk, it’s a regulatory risk/ issue as well. 

Bhavesh: And with your technology background, that must be something of a nightmare — all of that going ungoverned? 

Dan: Oh yeah. I have had nightmares from people writing macros and doing the wrong thing and causing significant problems in the organization. I love technology — I still play with it and try things out. But in any organization, governance and compliance are critical. 

Bhavesh: Wrapping up, Dan. I think it’s been a fascinating conversation around thinking of it in the end to end and, and the way you’ve described it and thinking about everybody’s in operations really is what you’re saying, fundamentally whether they know it or not, they’re, they’re, they are doing it.  

If you had a crystal ball, what does the bank of the future look like in the next five to ten years? 

Dan: Well, maybe it goes back to the point you raised — would you change the name of operations? I think fundamentally, there is no such thing as a front office and back office. It is one. And I think the technology we’re seeing now allows us to do this. From a financial institutions point of view, I think we’ll get rid of those terms — because it is one end-to-end flow, and we’ll manage it that way as one combined environment. 

We set ourselves up with different units, and Agile tried to do this, bringing people together, but it never really got outside of technology. I think there is a new model out there that allows us to really understand flow and work together as a flow. So when you’re designing a new organization or new structure, my advice is, don’t think about the way you’ve been working in the past. Think about what the data, the flow, the technology can do for you in the future and organize your company that way instead. 

Bhavesh: And I guess in some ways the, the, the new fintech organizations already thinking that way. So the more traditional players have to evolve, otherwise potentially they won’t exist in 10 years time. 

Dan: That’s right. And I’m involved in a few fintechs — it’s amazing, when you’re small and starting up you think that way, and then you start putting a structure in and you go — oh, why are we going back to that old structure again? How do we keep this new fluid part?  

I haven’t broken it yet. But when I do, I won’t call it agile — I’ll have to come up with a new name. 

Bhavesh: Well, I guess there’s a lot that needs to be changed, including the regulator, how the regulator thinks about this as well, because part of the structure that comes in is because of the regulation that forces you down that path. There’s a number of things that will have to evolve. 

Dan: Yeah, it does. There’s a lot of things that need to change. But the first and most fundamental thing we can change right now is the mindset, the behavior, and the language. Start changing that now and everything else will follow. 

Bhavesh: Well, I think that’s a great way to end the podcast. Dan, thank you very much for joining us on the Ops Game Changers podcast. 

Dan: Great, thank you. Really enjoyed it. Thanks. 

Bhavesh: If you’re interested to find out more, you can download Dan’s paper, Operations with a little o: Where They Go to the Next Frontier of Performance. The link is in the description for this episode. Thank you very much for listening and joining us, and please do check in to catch more episodes of Ops Game Changers to hear more fascinating insights from other leaders in operations about how they’ve overcome challenges to drive performance at their enterprises. Bye for now.