When Medibank Private looked for ways to improve its business, the company did something a little different.
Rather than hire expensive outside consultants to identify areas for improvement, the health fund asked its staff.
And the results have been a major contributor to the business recording a $186 million turnaround in the latest financial year.
In just over 12 months, Medibank Private’s Continuous Improvement staff program has had a major impact on the company’s bottom line, with estimated returns of $15 million to be banked over time
Medibank Private Managing Director, George Savvides, said that one of the principal keys to the company’s turnaround performance has been the empowerment of its ‘ground crew’ employees to identify issues and implement projects to turn the business around.
“We don’t need a McKinsey or a Boston Consulting to tell us how to improve the business – we’ve got over 1200 ‘ground crew’ staff who know exactly where the real gaps are to be addressed in the business,” said Mr Savvides.
“By empowering our staff, we’ve built up trust and rapport that inspires them to make a difference in their workplace.
“We believe the approach is quite cutting edge in corporate Australia
“Our employees, particularly our long-standing staff, know where genuine improvements can be made and chronic problems exist. This program lets them make a real difference to their company, developing projects that have and will continue to improve our bottom-line performance.
“As a not-for-profit entity, hard earned savings made through this program can be fairly redirected at paying the health bills and managing the well being of our almost 3 million members.”
The innovative Continuous Improvement program, focusing on the concept of Quality Action Teams (QATs), was implemented nationally in mid 2002. Each QAT consists of a group of volunteer staff from across all business divisions each with different experiences and interests.
Medibank Private believe that the concept of continuous improvement and innovation needs to be owned directly by the Managing Director, but with the impetus for change being driven from the bottom up – a reverse change management process.
“We’ve invested approximately $300,000 into the development of the QAT program, with estimated savings from QAT subjects of $15 million in its first year,” Mr Savvides said.
“But the benefits of the program have been far reaching, with increased staff morale and identification of latent talent within the organisation.
“With over 32 QATs across different parts of Medibank Private, and some QATs managing more than one project, well over 270 employees or 20% of the business have already become involved.”
The QAT program has covered categories such as business process (back and front office), knowledge management and communication, staff issues and process improvement. Product design, sales improvement, training and IT issues, have also been areas of focus for some of the QATs.
Swinburne University of Technology Adjunct Professor of Entrepreneurship, Dr John Bailey, has praised Medibank Private’s Continuous Improvement program for its innovation.
“It’s impressive to see a Government Business Enterprise such as Medibank Private relying on its ‘Ground Crew’ to help turn the business around – a challenge that is traditionally the responsibility of those at an executive level,” said Dr Bailey. “It’s promising to see a company empowering its staff and unleashing the talent within to start addressing the real business issues.
“Medibank Private’s employee program has also been successful because someone has been appointed with the specific role of implementing this program – and represents the staff at an Executive level.
“The various QATs also have the opportunity to report to Medibank Private’s Board of Directors – where the Board see and hear the issues of the business straight from the horses mouth.
“Medibank Private has found a way to harness the talent within their organisation that has not only proven to be financially viable, but a program that staff want to be involved with.”
Successful QATs have overhauled outdated membership card distribution processes, reviewed product waiting periods to ensure consistency across products and states, and developed processes to ensure children are not left on their parent’s cover once they are no longer dependents.
Medibank Private’s 2003 Annual Results recorded a $10.4m operating surplus, up from a $175.5m record loss in the 2002 financial year.