72

The Lean Management Enterprise

A system for daily progress, meaningful purpose, and lasting value

Cultural change at
Direct Line Group
An interview with Bryan Robertson, former director
of lean transformation

At a leading UK-based insurer, profound

cultural change is not only increasing
efficiencyit is enabling employees to
achieve things they never thought
they could.

73

Direct Line Group, based in Bromley,

Bryan Robertson: We spent quite a bit of time

England, is a leading provider of personal-lines

visiting other organizations to find out what

general insurance, with operations in Germany,

the right transformation approach would be. One

Italy, and the United Kingdom.1

of the key messages we kept hearing was to

focus on one area of the business, making sure

Under the leadership of Bryan Robertson,

you get the transformation absolutely right.

then the director of lean transformation, Direct

On the way, you find out what works and what

Line Group officially launched its lean-

doesnt, and its a great way to spotlight success

management transformation journey in early

for the rest of the organization.

2010. The initial focus was on improving

customer service and productivity in the com-

At this time, Darrell Evans, the managing

panys sales and service operations. Since

director of sales, service, and partnerships, came

then, the scope has gradually expanded, with

to us and said, Im really keen to start

plans in place to cover almost the

a lean transformation.

entire organization.
Now, when you start a transformation, I think
In October 2012, McKinsey spoke with Mr.

its very important to understand why youre doing

Robertson at its offices in London.

it in the first place. Far too often, when people

Mr. Robertson has since left Direct Line for

talk about lean, the view in their head is all about

another opportunity.

cost savings and process improvement. The

lean management that we want to be involved in

McKinsey: What were the circumstances

is not about that, not as the primary reason.

that drove Direct Line Group to look at

Its about cultural change to deliver long-term

lean management?

improvements for our people, our customers, and

our shareholders.

Bryan Robertson: Direct Line Group had

long been profitable, but as of late 2009

McKinsey: What did Darrell tell you?

we were actually taking a loss. Our new CEO,

Paul Geddes, came in with a new executive

Bryan Robertson: He said, I want to make sure

team, looking for ideas to turn the business

that every site is working the same way, that we

around. He said that while we would commit to

share best practices, and that we really engage our

making some technology investments in

employees to put the customer first. Thats exactly

claims and pricing, that effort alone wouldnt be

the type of cultural focus we were looking for.

enough. We needed to look at our overall

1 In early October 2012, the

group completed a successful

initial public offering
representing 34.7 percent
of its total share capital,
generating 911 million gross
proceeds, which were
received by the Royal Bank
of Scotland Group.

operational effectivenessmeaning, most impor-

There were other advantages, too. Sales and

tant, how we enable our people and engage

service is a big department, giving us a chance

with our customers. And to make Direct Line

to make a difference at a noticeable scale.

Group more effective, they wanted to launch

There were about 3,500 people working across

lean management.

ten operational sites, representing different

brands with different products. So it gave us a

McKinsey: What were the reasons for starting

real opportunity to find out how well lean

with the sales and service call centers?

management could work.

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The Lean Management Enterprise

A system for daily progress, meaningful purpose, and lasting value

McKinsey: What were the goals for that

Bryan Robertson: The employees that the

initial phase?

program targeted were the ones who deal with

Bryan Robertson: The stated goal was a 15

would have the best ideas because they knew

percent efficiency improvement. But Darrell and

what frustrated customers and what customers

I wanted the transformation to deliver a lot

were really seeking.

the customers every day. We knew they

more than that.

They said, for instance, that some of the quesAnd it did. It improved employee engagement

tions we asked had become too complex for

by 10 percent. It improved the consistency of how

the customer. We then asked the frontline staff to

we ran our business across all our sites. And

redesign the call guides according to what they

it improved communication across the different

knew the customers wanted to know.

sites, so we had a common language to run

the business, to solve problems, to share best

By starting with sales and servicethe front

practices, and to improve results.

endwe could begin seeing how to improve the

business from end to end. It was a way to ask

McKinsey: What effect did it have on cus-

questions such as: How should we market to our

tomer service?

customers? How do we engage our customers

Bryan Robertson
From 2009 through the end of 2012, Bryan Robertson was the director of lean
transformation for Direct Line Group, one of the largest UK-based general
insurers, with over 20 million in-force policies as of September 30, 2012. Mr.
Robertson started his career in the construction industry but in 1994
moved into telecommunications, leading large-scale continuous-improvement
transformations at Motorola and Damovo before joining the Royal Bank of
Scotland (RBS) Group in 2003. While at RBS, Mr. Robertson helped transform
a wide range of functional and business groups, and in 2006 he joined
RBS Insurance. Now known as Direct Line Group, the company completed its
separation from RBS with its initial public offering in late 2012.
Mr. Robertson holds a BS in quantity surveying from the University of Abertay
Dundee and an MBA from the University of Edinburgh.

75

Cultural change at Direct Line Group

When people start to show pride

in telling others about their
ideasinstead of keeping them
to themselvesI know the
change is meaningful.

about their ideasinstead of keeping them to

themselvesI know the change is meaningful.
McKinsey: How has the transformation process
changed you as a leader?
Bryan Robertson: Ive been involved in
continuous improvement for over 20 yearsbut
what Ive learned in the last 3 years has been
really powerful and has had far more impact for
me as a transformation leader.
Im highly motivated by seeing people achieve a

and improve the whole experience, from sales to

potential they had never imagined. And now,

claims resolution?

whenever I go back to one of our sites, people will

come up to me and say, There are things I can do

McKinsey: When an organization is going

now that I never thought I could do before.

through a transformation, what do you look for

to see whether the change is really occurring?

McKinsey: What does that mean for Direct

Line Group?

Bryan Robertson: It was quite clear to me from

the outset that lean management is very much

Bryan Robertson: It means we have a whole

about changing the way leaders think, lead, and

new base of skills. We have engineers who can go

behave, so thats one of the first things I want

to our call centers and help in problem-solving

to see happening.

sessions. We have people in the sales centers who

can go to our accident-repair centers. People

In too many organizations, the role of a leader

who never spoke up are now communicating in

is to tell people what to do. Our ultimate aim was

front of hundreds of people and problem

to define the role of a leader as someone who

solving on a regular basis.

coaches others to be successful and achieve their

true potential. Thats quite a difference from

They never thought they could do these things

what we were used to seeing. So when I see leaders

before. The potential was always there. And now

consistently holding problem-solving sessions

they can actually use their new skills to help

and welcoming problems as opportunities for

improve the business that they are very much

improvement, I know thats a great sign.

a part of.

Another good sign is when people begin to share

McKinsey: What have been some of the harder

ideas. Before, some people seemed to think

parts of this transformation?

that their competition was at the other sites in our

company, rather than the other companies

Bryan Robertson: Overcoming resistance.

that are trying to win business from us. So when

Youre asking people to think differently and do

people start to show pride in telling others

things differently, and thats never easy.

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The Lean Management Enterprise

A system for daily progress, meaningful purpose, and lasting value

At one of the accident-repair centers, one guy

for the last few years is a postboxfor manage-

directly told us, I want you to fail. Why? Ive

ment reports, management information,

been doing this job for 20 years. If you can

analysis of data, and so on. I actually came here

improve it, it proves that Ive been doing my

to be a leader. Now, as a result of the lean

job wrong.

transformation, Im becoming a leader again. I

can coach my team. I can develop my team.

Of course, thats not what a transformation is

I can lead my team.

abouthe may well have been doing a great job.

The issue is to find out how he can do an even

When you hear that, you know that the change

better job. And we say to people that the anger

is going to sustain itselfbecause the people have

and frustration they feel is OK, because

changed. Its a fantastic outcome.

if they didnt feel like that, it would mean they

didnt care. Whats important is paying

McKinsey: How would you assess the overall

attention to these emotions and helping them go

impact of lean management?

through the change curve for themselves.

When they do, it is brilliant to see people move

Bryan Robertson: The financial impact is great,

from resistance to strong advocates of this

because thats what any organization will ask

way of running our business.

for. We have delivered tens of millions of pounds

in benefit. But of equal importance are the

McKinsey: Is it easier if people are already

greater employee engagement and the new range

familiar with lean-management ideas?

of capabilities the organization can tap, such

as problem solving, coaching, and performance

Bryan Robertson: To be honest, the most

managementall centered on serving the

dangerous people in a transformation are those

customer in a more effective way.

who claim that they understand what lean

management is all about. The problem is that they

That gives the whole organization a new

probably know lean from a more traditional,

language: What would the customer think in this

cost-reduction point of view. They dont know

situation? How do we really get to the root

about the capability building, the cultural

cause of that problem, rather than just firefight

change, the leadership role modelingall of

the symptoms?

which are absolutely critical. Their limited

view is actually quite debilitating, with respect to

If the organization is focused on the customer, if

what they can and cant see as the potential

the organization is focused on problem solving,

for success.

and if the organization is focused on listening to

the employees, it will continually improve. That

McKinsey: What change stories have been

is what we are trying to achieve through our lean-

especially meaningful to you?

management system.

Bryan Robertson: There have been so many.

McKinsey: Are there any aspects of the

One of the leaders in our Manchester center

earlier transformation stages that you would

recently said to me, Ive been here for a number

do differently if you were to start it all

of years. But I realize now that all Ive been

over today?

77

Cultural change at Direct Line Group

Bryan Robertson: We were lucky in that

lead differently, the message got through much

the sales and service transformation was hugely

more forcefully.

successful, so now we have done our best to

identify and replicate the success factorssuch as

For that first stage, embedding people from the

having a fantastic sponsor in Darrell Evans

other functionsfinance, HR, learning and

and taking the time to ensure we have really

development, risk, and so forthin the team that

strong employee engagement. When those factors

is overseeing the change is a highly effective

arent present, we should be strong enough

way to help them understand their role in future

to say, No, its not time to go in yet. We also

transformations. It made the later stages of

recognize that its crucial to get as many

our transformation a lot easier.

people involved as possible. For instance, sales

and service relies on many more parts of the

McKinsey: What were some of the challenges in

organizationoperations, IT, and so forth. So our

bringing lean management into these other

transformation approach has aligned to reinforce

parts of the business, such as the accident-repair

other key improvement strategies, such as

centers or the finance function?

establishing the Direct Line Group Values, and

we therefore ensure people are involved from

Bryan Robertson: People sometimes think

other areas such as HR and risk.

that they can just copy what worked in one area

and repeat it, but thats never the case. The

Another critical success factor is ensuring we go

starting point isnt the methodology, its under-

and see to learn from other organizations up

standing the specific challenge that the

front. On our visits to other organizations, it was

accident-repair center or the finance function is

incredibly powerful for people such as our

facing. So the first question is, What is the

CEO and COO and IT director to meet their oppo-

business problem? Then you can find the right

site numbers. Rather than just listen to

transformation approach.

someone who was passionate about lean management, they were listening to the person

A big part of that process is listening. Leaders

who was passionate about the same things they

from other areas may say that sales and

cared about day to day. And when that person

service is quite different from the accident-repair

then said, As a result of lean management, I now

center, for example. But invariably, every

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The Lean Management Enterprise

A system for daily progress, meaningful purpose, and lasting value

business has a problem with variability, with

Bryan Robertson: I think you build trust

adherence to process, with hand-offs between

by making sure the companys values are openly

teams and functions. You just need to help

discussed all the timewhen they do work

these leaders see that their problem is an oppor-

and when theyre not working. They cant just be

tunity that you can help them fix.

a sign posted in the lift.

McKinsey: How sustainable is lean manage-

You reward people when they role model the

ment in the organization right now?

values. Of course, when discussing performance,

its important for people to show that they

Bryan Robertson: Any cultural change,

deliver results. But its equally important for them

including our journey to achieve a business that

to show that the way they delivered the results

continuously improves, takes a long time.

was consistent with the values.

But you have to plant the seeds early on to

be successful.

Trust also comes from demonstrating that you

listen and will take action. We created a website

It really does depend on culture. Because we

where people can post anything they want

were striving to establish a new organization, we

about the organization. People began to talk about

could ask ourselves, What kind of culture

what they like in the organization and what

do we want to have?

annoys them. And we make sure to do something.

Thats what it takes to earn trust and keep it.

We didnt just ask that as a management

committeeMike Tildesley, director of brand

McKinsey: What are Direct Line Groups

transformation, started a conversation with

transformation goals for the next two or

all 15,000 employees. That conversation took

three years?

over a year to run. As a result, we now have

a set of values that we have all signed up for, and

Bryan Robertson: So much is changing now,

that we believe will be a competitive advantage

especially with social media and new technology,

for us in running our business.

that keeping in touch with what the customer

cares about is more difficult and important than

But to me the really exciting thing is that because

ever. As channels and customer behavior

the values are so closely aligned with continu-

change, we see lean management helping us

ous improvement, they will help us sustain change.

become a more agile company so that we

They will tell us the kind of people we need to

stay ahead of the market in a way thats best for

recruit and promote, and how we should reward

the customer, best for employees, and best

them. That will be fundamental to keeping

for our shareholders.

this momentum going.

Copyright 2014 McKinsey & Company. All rights reserved.

McKinsey: How do you persuade people

that the values are meaningfulthat they can
trust them?