An Introduction to Horizontal Management in Financial Services (Part 1)

• Published date: 01 July 2016
• DOI: http://doi.org/10.1002/jcaf.22177
• Date: 01 July 2016

37

© 2016 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI 10.1002/jcaf.22177

f

e

a

t

u

r

e

a

r

t

i

c

l

e

An Introduction to Horizontal

Management in Financial

Services (Part 1)

Jeff Dauphinee and Alan Vercio

INTRODUCTION

Horizontal man-

agement is practiced

in most industries—

retail, manufactur-

ing, and assembly.

It is not practiced

in financial services,

health care, or small

businesses. Focus-

ing on the financial

services industry, this

article will explain

what is meant by horizontal

management, the benefits,

the required organizational

structure, and, in Part 2, the

measurement system.

At some point in the

future,financial services, health

care, and small businesses that

grow beyond being a small

business will adopt horizon-

tal management. As a small

business grows from single

manager—e.g., Ray Kroc’s

first McDonald’s restaurant

in Des Plaines, Illinois, to the

current global chain or the

Buick brothers’ process in their

garage to an Alfred Sloan GM

process—small business will

adopt horizontal management

of standards and supply chain

(horizontal) processes in order

to control their output and

compete in today’s environ-

ments. Long ago, financial

services grew beyond a small

bank. However, there is very

little evidence of horizontal

management.

Can horizontal manage-

ment, which enabled retail

and manufacturing to increase

quality, decrease variability,

and lower costs, be replicated

in financial services?

We believe the

answer is yes.

OTHER INDUSTRIES

HAVE ADOPTED

E2E PROCESS

MANAGEMENT

The retail indus-

try has practiced

end-to-end (E2E)

process management

for over a century.

The Sears catalog business

and related E2E process man-

agement was built in 1905 by

Julius Rosenwald. Ray Kroc

built what might be the most

disciplined E2E process man-

agement in retail (Exhibit 1).

FedEx, Amazon, and Apple

iTunes are other examples of

excellence in E2E process man-

agement. Retail E2E process

management roles include sup-

ply chain managers and logis-

tics managers. Manufacturing

and refinery have process engi-

neers. For example, at Texas

Instruments, process engineers

Focusing on the financial services industry, this

article explains what is meant by horizontal man-

agement, the benefits, the required organizational

structure, and, in Part 2, the measurement system.

This process is labeled end to end (E2E). The E2E

process determines the customer experience.

Accordingly, customer requirements are clearly

articulated. From these requirements, E2E partici-

pating department requirements are established.

© 2016 Wiley Periodicals, Inc.

Editorial Review