The competitive pressures in retail banking have led some management teams to relentlessly upgrade a long list of activities. Striving for leadership, many retail banking units have improved their staff support in functions such as product management, segment management, fraud compliance, regulatory compliance, performance and incentives measurement, CRM training, etc. The talented, aggressive executives who head these initiatives inevitably strive to implement functionality, processes and procedures that are ranked tops in the profession.

Such upgrades are well-meaning. But collectively, they can produce a level of unintended complexity that is debilitating for employees and customers alike.

The unintended consequences come from the “fire hose effect” of multiple staff functions imposing their continuously expanding lists of “to dos” onto the backs of the frontline. Instead of the frontline looking forward to the new features they can sell, they have trouble staying current and dealing with the ever-expanding list of questions that customers pose. Faced with the uncoordinated daily barrage of dozens of high priority e-mails, conference calls and other corporate-mandated edicts, the front- line’s natural response is to enter a mindless execution mode.

Moreover, contrary to expectations, customers, rather than being delighted and intrigued with an ever-evolving menu of state-of-the-art features, may instead walk away confused and often turned off.

This unintended complexity problem must be addressed at the root cause level. For example, if the employees’ working environment is too complex, spending more on better hiring and training is the wrong approach. You cannot hire or train yourself out of excessive complexity.

The managerial challenge is to selectively reduce the flow from some or all of the fire hoses. However, this is in conflict with the motivations of the func-tional managers holding each hose, who are endeavoring to be world class in their sophistication and comprehensiveness.

We recommend a four-step approach to diagnosing and then dealing with the problem of unintended complexity:

FIRST, assess your current situation. The following can be signs of excess complexity: loss of market share; costs too high, without a clear reason; cor-porate staff growing at a faster pace than frontline staff; and attrition, training, and morale issues in the frontline.

SECOND, assess the clarity of your value theme. If a prospect were to ask, “Why should I bank with you?” would all your people give the same, compelling answer to the question? A clear value theme is the best “complexity cop” in that it provides a context for which advancements are truly critical and which can be deferred.

THIRD, assess your execution alignment relative to your value propo-sition and identify current practices and planned initiatives that are adding unnecessary complexity.

FINALLY, synthesize your findings, and present the analysis of the problem in the right forum, typically in-cluding the head of retail, all the key staff executives, and members of the line. A hard-hitting diagnosis of the root causes should lead to a mandate to develop a plan to address the situation.

This plan would typically include a list of initiatives and practices that can be eliminated or cut back immediately that will produce a “win/win/win,” that is, the bank will be able to reduce expenses, frontline time will be freed up, and customers will be better served. Mystery shopping data can help in the detection of such “no brainer” cuts.

The plan should also include a process that will lead to some or all of the fire hose-holding staff functions being more selective in their demands on the line, that is, executing a shorter list of things better.

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