Financial institution reorganizes for results

Bain helped this development finance institution reorganize around sector-focused business units to address productivity issues. The client implemented the new structure within a year and all major operational indicators improved, including employee satisfaction, the number of loan approvals and time to approve loans.

The client, a Development Finance Institution, lacked a customer-focused approach to evaluating potential investments. The loan approval process was cumbersome, involving 11 handoffs and taking, on average, more than two months to complete. Management decision-making was slowed by a hierarchical structure organized around functional silos.

View Approach

Bain conducted a customer segmentation analysis to identify the needs of the DFI's customers. Bain benchmarked the organizational structures and incentive systems of similar DFIs in other countries, and redesigned the core evaluation and approval processes. Bain and the client identified non-core businesses which could be outsourced to improve management's focus on customers.

View Recommendations

Bain recommended that the DFI reorganize around sector-focused business units.

Elements of the reorganization plan:

A flatter, leaner structure gives managers greater authority to approve loans
A new evaluation process employs teams of multi-skilled analysts rather than silos of functional specialists
A new performance incentive system explicitly aligned employee bonuses to individual and corporate results

View Results

The Development Finance Institution was able to implement the new structure within a year. All major operational indicators, including number of loan approvals, volume of loan approvals, and jobs created by DFI funding, have improved sharply. Importantly, employee satisfaction has improved through greater ownership of customer results permitted by the cross-functional team structure.