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Situation Analysis: The product of several mergers, the ClientCo commercial lending organization [1,000 emp.] competes aggressively throughout ten states in the Northeastern U.S. Several factors created pressure on the group's profitability: consolidation of ClientCo's commercial borrower base; recent market entries by global banks; new entrants in commercial lending [investment banks]. A slowing economy also translated into lower demand for loans.

Improvements Identified: As part of an enterprise-wide operations improvement effort, The Lab worked with ClientCo’s Commercial Lending organization to identify [Phase I] and implement [Phase II] non-technology improvements that delivered significant, self-funding benefits beginning in the first 60 days. Over 200 activity-level, commercial lending improvements were implemented within six months, delivering benefits in several categories:

1. Inbound Loan Quality — More than two-thirds of the loan packages were received with missing, inaccurate or otherwise non-conforming data, causing credit analysts to spend up to 30% of their time on rework. Within weeks, dozens of improvements helped reduce this error rate by more than 70%.
2. Increased Uptime: Loan Officers — The percentage of time spent on sales tasks with customers and prospects [i.e., uptime] represented roughly half the rate of best practice peers. Over 30 immediate action improvements [30–60 day implementation] targeted a two-thirds increase in uptime without new technology.
3. Downshifting Tasks — High-cost Loan Officers were spending over 40% of their time performing loan administration tasks [updates, reviews, data input, etc.]; more than 35% of Loan Administrators time was devoted to work other than loan processing. Over 80% of these tasks were candidates for centralization and/or transfer [i.e., downshifting] to lower-cost, more efficient positions within the commercial lending organization.
4. Standardization Opportunities — Although a limited number of standards existed within the commercial lending organization, these were virtually never followed, tracked or enforced. Example: Up to nine different Loan Application/Approval forms were in use for similar loans. Scores of opportunities existed to adopt uniform guidelines for customer communications, error resolution, documentation checklists and numerous other items.

Overall Results: Within the first year, the commercial lending initiative delivered approximately 15% in annual recurring cost savings. Revenue producer uptime grew by 18%, resulting in a gain in total revenue productivity of over 7%.