Leading member-owned wellbeing organisation

Objectives

This organisation offers health, wealth, and care services to over a million consumers. Faced with a sustainability crisis, the client needed to create a scalable, innovative and contemporary operating model which was efficient, centred on value creation, and had appropriate management and support costs.

Bevington Group was engaged to undertake a rapid review of their Human Services platform structure and cost base to help identify options for the future state.

Challenges

Low NPAT margin and Return On Average Net Assets Misaligned risk vs return profiles – paying money to take on risk Difficult for executives to deliver on core strategies Significant regulatory changes on the horizon Unplanned variations driving cost and risk Internal competition for resources, allocations and management attention

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“We need a management team just focused on human service delivery”​ “Doing business with ourselves makes it very inefficient in speed of decision and execution”​ “As an organisation, we over-consult. We desperately need clarity on decision rights”​ “Our biggest challenge is prioritisation. How do we triage which Business units need to be prioritised?”

Approach

• Bevington engaged with key stakeholders through top-down interviews to collect data on the strategic priorities, and to identify the challenges.
• This led to hypothesis-driven data analysis where issues and their causes were tested and validated alongside a risk and benefits assessment drawing out the relevant opportunities for improvement and quantifying the magnitude of benefit.
• With Bevington’s expertise in operating model design, future costs and inefficiencies were projected based on the existing operating model.
• This provided a baseline to compare the strategic and profitability benefits of alternative operating model options.

Findings

Low Net Profit After Tax (NPAT) and Return On Equity (RoE) were examined and the following causes were identified:

Risk and return portfolios misaligned where it was heavily skewed towards risk	Several inhibitors to growth: Unnecessary silos Inconsistent ways of working Misdirected focus

Our recommendations

The key opportunity themes were introduced:

Manage the business differently (based on maturity and risk)	Focus on where you win	Rebalance portfolio to reduce risk and towards more mature businesses
Take a portfolio approach to immature businesses to enable test and learn and ‘fail-fast’ mindsets	Reduce waste in a disciplined way	Deliver shared services closer to the front-line

Implementation

Implementation was supported by:

• A transformation program, including pilot sites for the new operating model (test and learn model)
• A suite of new and improved metrics to monitor end-to-end process health and measure the program’s success

Benefits realised

Improved financial performance by changing the state of the portfolio of business	Improved customer service via an integrated health platform to provide health care solutions across multiple channels (e.g. in-home, community, and virtual)

Continuous improvement

The organisation is currently in the process of implementing:

• an improved governance framework
• an improved roster optimisation process
• redesigned processes for branch network operations to improve servicing customers

Part of this work was supported by the XeP3 product (owned by Bevington and Partners Pty Ltd)