IDS Financial Services Reengineers To Reduce Turnover, Improve Customer Service
Reengineering a company is a huge challenge, especially when it involves 6,775 independent financial planners scattered at 160 offices throughout the country. That’s the situation at IDS Financial Services, the Minneapolis-based provider of mutual funds, life insurance and annuities.
In 1991, the firm began examining its structure after realizing that it had a serious problem retaining its independent work force. More than 70% of the company’s financial planners were leaving within four years; half were bailing out after only 12 months. Although IDS remained highly profitable, “It’s an incredibly competitive industry. If you want to remain a leader, you have to look constantly for ways to do things better,” says Marie Davis, who as IDS’ director of employee and client communications was a member of the company’s reengineering committee.
IDS had tried tweaking its compensation system. It had made changes to the products it offered. It had instituted numerous training programs. All this effort produced only a minimal gain. So senior management decided to completely reinvent the way the firm works. After senior management performed a step-by-step analysis of the way work is performed and visited 30 U.S companies that had best practices in such areas as training, these executives worked with HR to interview and assemble the reengineering committee. The company formed a steering committee that included 30 members from senior management. IDS then formed the reengineering committee, which included 30 rank-and-file employees from all sections of the company. Their task? A 14-month assignment to study problems and suggest radical improvements.
The changes have created new ways of doing work within the company. Although financial planners will remain independent within the field, they will work together more than in the past. For example, their approach to selling financial services will resemble more of a partnership. Financial planners soon will have access to teams of experts in such areas as estate and tax planning, with whom they’ll share commissions. Further changes within the headquarters will increase the contact planners have with support staff. Teams that are trained cross-functionally can provide instant answers to planners’ questions.
HR’s role in the reengineering has been enormous. The staff of 250 has worked hard to keep employees and independent planners abreast of changes. The 60 trainers (who are a part of the HR staff) also have worked with the reengineering committee to develop creativity skills, trust building, change management skills and problem analysis. They’re also preparing to work with the financial planners, who will need coaching in teamwork and quality measures.
Yet the company is plowing ahead with full implementation of the program in 1994 and 1995. It’s investing $70 million in the reengineering effort, and adding to the $100 million it already spends on training. Its goal: to retain 80% of the financial planners after the first four years, raise the customer satisfaction level to 90% and increase the speed of overall operations by 25%. Although there’s a chance that reengineering could affect IDS’ position in the financial services market, Davis says the company is willing to take a dip in earnings for a year or two if it ensures IDS’ long-term profitability.
Personnel Journal, December 1993, Vol. 72, No.12 p. 48D.