If you think that your organization’s financial services processes are perfect with absolutely zero room for improvement, consider taking another look. There is always room for improvement. In fact, good management should always be identifying opportunities to increase efficiency and effectiveness in processes. Legendary football coach Vince Lombardi once said:
“Perfection is not attainable. But if we chase perfection, we can catch excellence.”
This quote is an absolute gold mine of inspiration, but there are two really great takeaways here. First, perfection is not attainable, and no one should take it to heart when it isn’t achieved. Secondly, and most importantly, is that this quote reveals a formula for excellence: the pursuit of perfection.
For financial service firms and departments seeking to refine their current processes, there is a trusted and long used method that can be applied to an organization’s procedures. It helps to provide the best value for the accountants working on the tasks, the firm that the accountants are working for, and, ultimately, the client that the firm is servicing. It is proven. It is simple. This is the Kanban board method.
Kanban is a visual method for analyzing what work there is to be done, what is currently being worked on, and what has been completed. The primary goal of this method is to identify bottlenecks so they can be addressed in favor of a more efficient movement toward the end goal. Kanban can be tracked on a board with each of those statuses (to-do, being done, done) occupying a column and various tasks listed in each one depending on where they currently stand.
The three-column system just described is the most simplistic route that can be taken with Kanban boards; however, they are easily scaled and customized to meet the needs of the specific firm or task. For instance, another column can be added before the “to-do” column to track backlogged tasks. Columns can also be sub-divided where needed, or a set of horizontal rows called swim lanes can be added to help organize the workflow.
All of this works toward a singular, focused goal: gradual and continuous improvement.
Perspective on where things began can often inform why processes are effective. Kanban developed in lean manufacturing in the auto industry and is most commonly associated with Toyota. Early adopters of this method sought to reconcile inventory levels with the actual consumption of goods in hopes of streamlining procedures and eliminating potential waste. In essence, the rate of demand controls the rate of production. The process is widely used in a variety of industries, including manufacturing, financial services, and software development.
Kanban boards can be as simple or as complicated as they need to be. In their most simplistic form, there might just be the three columns outlining items that are to-dos, those being done, and those completed. A variety of other factors can be integrated into the boards to address any number of specific needs that an organization might require.
One of the most important things to remember is that in contrast with many other project management methods, Kanban is not necessarily intended to be a from-scratch process. Instead, when implementing Kanban boards, it is assumed that there is an existing process in place that the Kanban board is in place to improve. Because the boards are intended to improve existing processes, they can be applied across a variety of disciplines, including financial services.
Six guiding principles inform the Kanban board method. All play a significant role and, when used in concert, are almost certain to yield positive results.
Kanban boards can be adapted to fit almost any industry, and there are several ways they are ideal for accounting and finance firms. There is certainly no shortage of methods and project management resources available to the financial industry to improve and organize, and they all have their advantages and disadvantages. While most are likely effective in their way, they can also be cumbersome, expensive, rigid, and difficult to implement and communicate to the team.
Kanban boards are simple to implement and excel in focusing a team on specific tasks; however, they are not without some disadvantages. Two issues can arise when using Kanban boards for department improvement.
First, the boards can become much less effective when they are made overly complicated. The beauty of this method lies in its simplicity, and with too much tinkering, it can erode quickly. The board needs to be lean, simple, and easy to read. Tasks, status, and ownership should be easily understood in a quick glance.
Secondly, Kanban boards do not convey specific times for the completion of the states. So while it is exceptional with tracking where tasks are on a spectrum (to-do, in process, complete, etc…), it is not equipped to show deadlines or project completion date. If there is any attempt to try to shoehorn that type of information on to the board, the accounting team can run the risk of running afoul of the first problem by overcomplicating a necessarily simple method.
In the end, these are two relatively minor issues with the method. They are representative more of the fact that the boards aren’t designed to foster those specific attributes and instead focus on other efficiencies. The advantages far outweigh the challenges that may arise with the Kanban board.
Visual. Easy to understand. Focused. Simple. It would be difficult to ask for more from a project management method. Kanban excels in organizing tasks and keeping the team focused, but it also serves a purpose on a much larger scale. Kanban boards are designed to foster continuous improvement. What a powerful guide stone for a financial services team! Slow and gradual improvement that doesn’t disrupt the existing workflow but instead seeks to remove bottlenecks and impediments slowly. This mentality creates a culture around the team, and if everyone on the financial services team is bought into this culture, significant improvements could be seen after a while.
The financial services industry is one that is nuanced, heavily regulated, and constantly changing. For these reasons, continuous improvement, organization, and prioritization are critical for ensuring that a team is always looking for a better way to do things. If you feel like your team is stagnant, consider implementing Kanban boards. Over time, you might find your processes greatly improved.
June 01, 2020