Like other major banks in a consolidating industry, Bank One has been getting bigger. A few years ago it realized it also needed to get better. And that’s why Lew Fischer, the Division Executive of National Enterprise Operations (NEO) launched an initiative that has brought Lean Six Sigma thinking and methods to NEO. He has led the change by creating an operating architecture and the culture to support it. This operating architecture has engaged every level of the organization and brought with it simple problem-solving tools and thinking. As it continues to mature, it has started to incorporate more complex Lean Six Sigma methods.
If you ask Bank One’s NEO staff why their division is investing so much in improvement efforts, the first thing they’ll tell you is that the reasons they’re doing it today aren’t the same as when they got started.
Mike Fischbach, senior VP of the National Enterprise Operations (NEO) group, says that with all the changes that occurred in the company in the 1990s, the driving force initially was basic survival. “We needed to take what was unpredictable and make it predictable and sustainable,” he says. “We weren’t striving for best in class, just getting control over our operations.”
Just two years into their efforts, the situation is quite different. The talk now is around goals such as…
The measures of success have changed, too, from “can we meet basic customer needs,” to hard core metrics like earnings per share. Which if you’re in a business like banking, means having the Lines of Business maximizing revenue and the back office operations reducing costs. “We can improve what we do every day,” explains Fischbach, “but if we don’t take out the infrastructure, the buildings, the equipment, the waste, our earnings per share won’t increase.” In other words, focusing only on quality won’t get Bank One where it needs to be; they also have to focus on speed and cost. “We’re not trying to use this to do anything but drive return for the bank,” says Fischbach. “That’s really our purpose.”
The Bank One story comes to us from Mike Fischbach, Senior Vice President of Implementation Services of National Enterprise Operations (NEO), Darryl Greene, Senior VP of NEO’s National Performance Consulting group (NPC) and two of his direct reports, consultants Jim Kaminski and Tim Williams.
Additional insights into the banking industry were provided by Bob DeLeeuw (President), Bryan Carey (executive VP), and Joe Walsh (executive VP) of DeLeeuw Associates.
The first improvement efforts in the NEO division were centered around measuring performance and identifying opportunities. What became “Focus 1.0” was introduced as a simple problem-solving approach to address gaps. Senior VP Darryl Greene likens Focus 1.0 to GE’s “Workout”: a simple, collaborative problem-solving strategy where everyone gets in the same room, looks at the issues, and quickly comes to resolution on tactical actions that they have ownership over. But Lew Fischer, NEO_Division Executive, recognized that one method would not be sufficient to address the improvement needs of NEO.
That’s when a new generation of improvement was born, called Focus 2.0. Launched in early 2002, it differs from Focus 1.0 in having a lot more emphasis on Lean goals (eliminating complexity, increasing process velocity). Rather, Focus 2.0 illustrates a pathfinder approach: using pilot and demonstration projects to generate success that creates pull for Lean Six Sigma methods. The rollout is designed to occur in three phases:
Create success aligned
with operating plans
Continue building capacity
“One of the biggest obstacles to getting started is having faith in the process,” says Senior VP Darryl Greene, who himself is a 6 Sigma Master Black Belt and has led organizations in implementing three major improvement approaches (Lean Manufacturing, Six Sigma, and Design for Six Sigma). “One of the ways of getting over that obstacle is selecting opportunities that are important to the people who have to implement and support the effort. Initially, people hesitated until we said, ‘We’ll do it on your project, and we’re going to give you resources to facilitate the process. And that’s when they said, ‘Okay, we’re willing to give it a shot.’”
Because they are in a demonstration phase, where the primary interest is creating what engineers would call “proof of concept” for Lean Six Sigma, the main priority was not in building a critical mass of knowledge and support (such efforts were begun later in their deployment plan). That’s why Bank One delayed two of the most common first steps companies engage in:
If NEO isn’t relying on widespread training and project teams, what are they doing instead? Anyone who’s studied Six Sigma knows that its prescribed infrastructure is one reason it has succeeded where previous improvement methods failed. Having formal relationships between different layers of management and various Belts of different colors creates a mechanism for better tracking of improvement projects and better linkage of results to business priorities.
Ingredient #1: A simple architecture
Mike Fischbach and his colleagues are all veterans of Six Sigma and other continuous improvement efforts. They’ve seen enough to know what hasn’t worked. “Many service companies have tried to bring in sophisticated Six Sigma or Lean tools without the fundamental culture to understand how to sustain and leverage it,” comments Fischbach. “They might get a few successful projects, but soon the whole program falls apart.”
The conclusion was obvious: at banks and other institutions with little or no history with continuous improvement, starting from the bottom up should be considered as a viable option. “So we’ve been very focused on making sure that the fundamental pieces are in place and building from there,” says Fischbach.
The Continuous Improvement (CI) Fundamentals, as he calls it, is an operating architecture for improving performance at every level. Starting with the frontline, as you go up in the NEO organization, each level has been provided with increasingly sophisticated tools and practices for setting goals and measuring and improving performance (conducting business reviews, closing gaps with problem solving tools, celebrating successes, etc.).
While you can find Lean and Six Sigma tools in practice, they aren’t often overtly referred to within Bank One yet. Rather, the approach is to present the Fundamentals, then introduce new tools or methods as a way to add more rigor and more power. “We’re not using terms like Lean at Bank One because that would only serve as a barrier,” explains Senior VP Darryl Greene. “People tell us they have a problem to solve, we facilitate them through the use of problem-solving tools, and then guess what? They’ve just ‘done Lean’ without the anxiety that comes with having to be trained in a new practice, terminology, tools, etc.”
Ingredient #2: Internal expertise
The second form of infrastructure is the people to help facilitate adoption of the concepts and implementation of the methods. Within Bank One’s NEO division, that role is filled by the National Performance Consulting (NPC) group. NPC is staffed with people experienced in advanced problem-solving (both Lean and Six Sigma). They work collaboratively with senior, middle, and frontline staff to coach and support improvements and, on some occasions, follow up on identified action items.
If this model was followed in the long run, the danger would be in turning “quality improvement” into something that is solely the province of specialists. But remember that Bank One is using a pathfinder approach to implementation, using quick successes to spread knowledge and create pull in the organization. Also, NPC priorities are determined by priorities within the business units; NPC resources are leveraged to work on the business units’ priorities. NPC and Focus 2.0 are being positioned as methods to help people meet their business goals.
For the past several years at Bank One, each part of the NEO organization has been asked to make unit-cost productivity improvements. It is difficult to sustain significant levels of unit-cost improvement without a sophisticated look at the business. The need to achieve greater productivity improvements provided fertile ground for Focus 2.0 application. “We thought the timing was perfect to introduce Focus 2.0, because each of the departments was looking for ways to drive more improvement,” says Darryl Greene. Focus 2.0 has become a means of engaging the frontline, middle management team, and senior management team by equipping them with tools and practices to improve performance.
That’s why, at a practical level, the thrust of Focus 2.0 is getting an organization that has traditionally been very siloed to start thinking about the flow of work, from beginning to end. “Key operations leaders see the value of everyone in the organization thinking about their work from the customer’s perspective and driving improvement accordingly,” says Greene.
Establishing a vision and priorities
The rollout of Focus 2.0 within the NEO group began with an introduction of concepts to key leaders within the business unit. These people came with project ideas that they identified in their operational plans as key to achieving annual goals. This “vision event” included:
A key outcome was having all these managers share their project ideas, talk about the opportunities, and prioritize which projects should be pursued using a process improvement approach. The NPC group then assigned their resources to work on those priorities (see Chps 12 and 13 for details on two of the projects).
Making improvement an “event”
Once business improvement priorities were identified, they were implemented through a similar event model. In fact, Focus 2.0 is built around a series of improvement events, a model based on a Lean technique called Kaizen, in which a group of people is brought together for an intensive multiday session. In Bank One, a Focus 2.0 event lasts five days, with an objective to identify and implement solutions across the value stream Here’s how it works:
The basic improvement event structure is always the same, with the specifics tailored to fit different situations.
Keeping sponsors involved
The team leader of the Focus 2.0 event and the facilitators have an end-of-day report out to the sponsor on days 2 through 4. “We use this time to ensure the sponsor understands the issues and recommendations the team is working on, and to give the sponsor an opportunity to provide any insights and guidance. We don’t want any surprises on the final report out on Day 5,” says Ass’t VP Tim Williams.
The NEO group has quantified a number of different measures of success for each of the projects they’ve conducted. Their figures show that:
As always, there are other intangible results as well: “Now that we have successes, we find the sponsors are asking for more application in untouched areas,” states Tim Williams. “Also as we go into our annual operating planning cycle and identify priorities, we are building Focus 2.0 events in the plans as the way to achieve the established goals where and when appropriate.”
Implementing Lean Six Sigma in an environment not accustomed to improvement has naturally had its challenges:
#1: Time. Getting people to take time away from their regular jobs is very difficult. To counteract this barrier, the NPC staff work with line management to make sure that all improvement events are well scoped in advance (so results can accrue from a 5-day event) and targeted on true business priorities (so the return on investment will be worthwhile).
#2: Making physical changes to the workplace. Because service work is not as visible or physical as manufacturing work, people in service environments are seldom aware of how the physical layout of their work area affects quality and speed. In Focus 2.0 events, diagrams are used to demonstrate how the floor layout affects process flow.
#3: Making true Lean improvements. Some Lean tools and concepts bring insights that lead to relatively simple changes in a process. But sometimes the Lean changes needed to achieve the biggest gains feel counterintuitive to people working in service areas. That means teams and managers alike are sometimes unwilling to take what they see as a risky move. Other Lean challenges they’ve encountered include:
The key lessons that Darryl Greene and his colleagues would share with others include:
Positioning internal Lean Six Sigma resources as a support to the business units is critical for acceptance. At Bank One, the NPC staff have worked hard to collaborate with line management and frontline staff to identify problems, select targets, and generate solutions. This move makes sense because ultimately the business units know their areas best, will own the changes, and will be responsible for sustaining them. NPC staff are there to assist in supplying the structure and create an environment for change.
The NEO group in Bank One is modifying Lean Six Sigma to fit the financial industry, and tailoring deployment strategies to fit their organization.
“When I was at GE Lighting,” says Darryl Greene, “I think Six Sigma was so powerful because the infrastructure was already in place—people were familiar with metrics and scorecards, there was a history of continuous improvement, and so on. They had multiple years of double-digit productivity improvements, so there was already a culture around taking out costs, improving operations, and trying to do the best for the customer.
“Most other companies don’t have that history with improvement,” he continues. “DMAIC started in NEO in 2000 as a way of attacking and stabilizing the operation, which I think was a critical need. We actually slowed it down when I came on board because we discovered the opportunities linked to establishing widespread use of fundamentals was greater than doing more sophistical projects. Slowing down our use of DMAIC projects let us actually accelerate putting the infrastructure in place, which in turn is creating a high-performance culture that can sustain improvements.”
By using well-chosen pilot projects, says Greene, Bank One isn’t overreaching their bounds and they’re getting buy-in from the ground up, which they can now leverage in other parts of the organization.
Catalysts for change
“I view participants in Focus 2.0 events as being the catalyst TO change while sponsors are the catalysts FOR change. Without daily interaction or communication between both parties, the project on its own will undoubtedly fail.”
—Jim Kaminski, Ass’t VP, Bank One
Many organizations have found it best to use CEO leadership to mandate adoption of Lean Six Sigma, as a way to rapidly build resources and capabilities and generate results. For Bank One, taking a different approach of creating pull for Focus 2.0 has proven an effective approach to implementation. They’ve seen that selecting projects that are high priority for sponsors tends to get the support necessary to drive improvements and be very successful, and gets people asking NPC to come in and lead improvement events. They had one project on overnight mail (see p. 337 for details), that was extremely important to the sponsor. Because of that support, all of the improvements that were identified were quickly implemented and have been sustained. More importantly, sponsors have been convinced by early successes to work with the NPC group on numerous other projects.
The NPC staff agree that the biggest bang for NEO’s bucks has been cross-functional problem solving. “It is quite an eye opener for participants who have never seen the process of their suppliers and their internal customers,” says Jim Kaminski. “Cross-functional problem solving has opened the doors to better understanding of each others’ business operations and ultimate affect on the external customer.”
Pull and pressure
“It does help if senior managers support our efforts both actively and proactively,” says Jim Kaminski of Bank One’s NEO division. “But for us, it wouldn’t work to force engagement on senior management. In our approach, we leveraged those senior managers who gave us the opportunity to pilot Focus 2.0 within their business unit. We proved the concepts…they became advocates…and in turn we promoted these early adopters. As a result, peer pressure has taken care of the rest, and other business units have begun to seek out our assistance.”
The NPC group initially identified two different kinds of improvement events:
“What’s interesting is that we changed the name and used Focus 2.0, first to emphasize that we were moving to the next level of problem solving for our group, but even more importantly to avoid terms like ‘Lean manufacturing.’ We knew once we threw terms like that out there, people wouldn’t accept it.’”
Senior VP, Bank One
What they learned is that it was much more difficult to achieve significant improvements when they focused more on defects than on process speed. “If you don’t have the right data on hand, you can’t do a good Six Sigma analysis in just one week,” says Tim Williams. “It usually takes longer to decide what data you want and then gather it. So in our quality-oriented events, the statistics weren’t very robust; the lack of data and the short time frame did not allow us to identify and test true cause-and-effect relationships. Lean tools are more easily applied in un-improved service processes, and bring immediate results.”
“As tough as the changes have been, getting all of our systems onto one platform, it’s created a culture of working together,” says Mike Fischbach. “It’s taught us that getting people together with a very clear objective and a laser-like focus is a very valuable way to introduce speed into a process.” He and his colleagues offer these final words of advice:
The outcomes, says Fischbach, are worth it. “The successes the pilot projects achieved has earned us the opportunity to go in and lead more events, and, more importantly, are returning value to Bank One,” he says.
Part I - Using Lean Six Sigma for Strategic Advantage in Service
Part II - Deploying Lean Six Sigma in Service Organizations
Part III - Improving Services