Embedding Lean Six Sigma and Linking Deployment to Business Strategy

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Embedding Lean Six Sigma and Linking Deployment to Business Strategy

  1. 1. Chris Fleming VP Life Strategic Planning and Business Development Head of USFS Six Sigma ING US Financial Services Embedding Lean Six Sigma and Linking Deployment to Business Strategy May 11, 2006
  2. 2. <ul><li>European company based in the Netherlands </li></ul><ul><ul><li>Provider of banking, insurance and asset management services </li></ul></ul><ul><ul><li>Operating in over 50 countries </li></ul></ul><ul><ul><li>114,000 employees </li></ul></ul><ul><li>Strong and positively trending financial results </li></ul><ul><ul><li>As of 4/4/2006, ING has the 13 th largest market cap among global financial institutions (source: Bloomberg) </li></ul></ul><ul><li>Enormous effort has improved brand awareness </li></ul><ul><li>US companies built through acquisitions… acquirer of acquirers </li></ul><ul><ul><li>Insurance Americas contributes 22% of ING’s profits </li></ul></ul>ING
  3. 3. <ul><li>Strong Financial Results, pressure to grow </li></ul><ul><li>Organization tired of new methodologies… </li></ul><ul><li>Recent history of restructuring, moves, etc. </li></ul><ul><li>Company focused on two major initiatives </li></ul><ul><ul><li>Your Future. Made Easier </li></ul></ul><ul><ul><li>Economic Value </li></ul></ul>Background Why does ING need Lean Six Sigma?
  4. 4. ING Brand
  5. 5. ING Brand <ul><li>Focus on customer success </li></ul><ul><li>Being easy to do business with </li></ul>
  6. 6. Managing For Value <ul><li>Creating sustainable economic value </li></ul><ul><ul><li>Drive profitable growth </li></ul></ul><ul><ul><li>Increase return on book </li></ul></ul><ul><ul><li>Reduced cost of capital </li></ul></ul>
  7. 7. Critical Elements of a Successful Deployment <ul><li>Leadership Commitment </li></ul><ul><li>Dedicated Resources </li></ul><ul><li>Alignment and Integration with Business Strategy </li></ul><ul><li>Incentives and Accountability </li></ul><ul><li>Quantifiable Measures and Goals </li></ul><ul><li>Business Process Framework </li></ul><ul><li>Customer Focus </li></ul>
  8. 8. Building Support <ul><li>Retail Life business hired a new leader </li></ul><ul><li>Open to Six Sigma methodology, had seen the results before…former skeptic converted </li></ul><ul><li>Recognized a need for change </li></ul>Finding a Business Champion
  9. 9. Building Support Stating the Need…Getting Started in the Life Business <ul><li>Business was generating strong results; however… </li></ul><ul><li>Falling application counts </li></ul><ul><li>Customer complaints/dissatisfaction </li></ul><ul><li>Processes and organization not aligned </li></ul><ul><li>Lack of metrics, very few customer-centric metrics </li></ul><ul><li>High-cost organization </li></ul>Business Leader Created the Burning Platform
  10. 10. Building the Team <ul><li>Established a Quality Council to ensure consistency and govern the program </li></ul><ul><ul><li>Resource alignment, project selection and results owned at the business unit </li></ul></ul><ul><li>Quality Leaders named for each business area </li></ul><ul><li>Full-time Black Belts and Master Black Belts </li></ul><ul><li>Mix of internal and external resources </li></ul><ul><li>Aligned by core process where scale permitted </li></ul><ul><li>Established one year staffing target of 1% full-time six sigma resources </li></ul>
  11. 11. Building the Team <ul><li>Quality Leaders </li></ul><ul><li>Influential business leaders </li></ul><ul><li>Not a full-time role </li></ul><ul><li>Champion local deployment </li></ul><ul><li>Drive local program alignment with strategic objectives </li></ul><ul><li>Master Black Belt </li></ul><ul><li>Hired externally </li></ul><ul><li>Full-time position </li></ul><ul><li>Certified, experienced from well-respected programs </li></ul><ul><li>Assigned to each business area </li></ul><ul><li>Black Belts </li></ul><ul><li>Hired primarily internally with a few experienced Black Belts hired externally </li></ul><ul><li>Full-time position </li></ul><ul><li>Deployed by business area, assigned to Master Black Belts </li></ul><ul><li>Green Belts </li></ul><ul><li>Executive Green Belt training rolled out to all leadership </li></ul><ul><li>Part-time Green Belts </li></ul><ul><li>Green Belt training deployed though Black Belt-led project teams </li></ul>
  12. 12. Training Model <ul><li>Leveraged external resources to deliver off-the-shelf training </li></ul><ul><ul><li>Executive Green Belt </li></ul></ul><ul><ul><li>Green Belt for Teams </li></ul></ul><ul><ul><li>Black Belt </li></ul></ul><ul><li>External resources experienced with program launch phase </li></ul><ul><ul><li>Critical consideration as many six sigma people come from mature programs </li></ul></ul><ul><li>First round of training material enhancements completed (Black Belt) </li></ul><ul><ul><li>Incorporating ING business examples </li></ul></ul><ul><ul><li>Integrating Lean methodology more closely </li></ul></ul>
  13. 13. Measures, Goals and Accountability <ul><li>Mix of global and area measures and goals </li></ul><ul><li>1% full-time six sigma resources </li></ul><ul><li>Leadership trained </li></ul><ul><li>Offset cost of program first 12 / 18 months </li></ul><ul><li>Leadership six sigma goals and accountability </li></ul><ul><li>Black Belts benefit targets established by area($500k - $1MM) </li></ul>
  14. 14. ING Lean Six Sigma Model <ul><li>Build customer-centric culture focused on value creation </li></ul>DMAIC DFSS Process Management <ul><li>Improve existing processes, products or physical space </li></ul><ul><li>Design new processes and products when none exist or the current environment is not capable </li></ul><ul><li>Build Six Sigma Structure through process documentation, defining customer requirements, and tracking critical process indicators </li></ul>Lean Process Design
  15. 15. Linking to Strategy Lean Six Sigma Becomes “How” We Execute Your Future Made Easier Manage for Value Creation ING Strategic Objectives Superior Compliance Environment ING Strategic Objectives ING Strategic Objectives Winning Performance Culture ING Strategic Objectives DMAIC DFSS Process Management <ul><li>Improve existing processes, products or physical space </li></ul><ul><li>Design new processes and products when none exist or the current environment is not capable </li></ul><ul><li>Build Six Sigma Structure through process documentation, defining customer requirements, and tracking critical process indicators </li></ul>Lean Process Design Execution
  16. 16. Sustaining the Momentum <ul><li>Communication </li></ul><ul><ul><li>Brownbag sessions </li></ul></ul><ul><ul><li>Department meetings and overviews </li></ul></ul><ul><ul><li>Internal web site </li></ul></ul><ul><ul><li>Articles </li></ul></ul><ul><li>Sharing the Results </li></ul><ul><ul><li>Gallery walks </li></ul></ul><ul><ul><li>Employee meetings </li></ul></ul><ul><ul><li>Management reviews </li></ul></ul><ul><ul><li>Goals and metrics </li></ul></ul><ul><li>Employee Engagement </li></ul><ul><ul><li>Leadership </li></ul></ul><ul><ul><li>Process owners </li></ul></ul><ul><ul><li>Employees </li></ul></ul><ul><li>Leadership Driven </li></ul><ul><ul><li>Visible </li></ul></ul><ul><ul><li>Goals and metrics </li></ul></ul><ul><li>Strategic Alignment </li></ul><ul><ul><li>Project efforts focused on high-impact areas </li></ul></ul>
  17. 17. Linking to Strategy <ul><li>Business to Unit to Department Strategies Linked </li></ul><ul><li>Consistent, aligned metrics </li></ul><ul><li>Critical Projects Driven by Strategic Objectives, linked with consistent metrics </li></ul>What We Can Learn from Hoshin Kanri (Policy Deployment)…
  18. 18. Linking to Strategy <ul><ul><li>Voice of Customer </li></ul></ul><ul><ul><li>Voice of Business </li></ul></ul><ul><ul><li>Market Factors </li></ul></ul><ul><ul><li>Competition/ Benchmarks </li></ul></ul><ul><ul><li>SWOT </li></ul></ul>USFS Strategic Objectives Business Line Strategies Business Line Tactics Strategy Deployment Review Process METRICS METRICS PROJECTS METRICS
  19. 19. Sources of Six Sigma Projects <ul><li>VOC – timeliness, accuracy, satisfaction </li></ul><ul><li>VOB – Increase sales, reduce expenses, improve productivity, enhance performance review process </li></ul><ul><li>VOE – Increase employee retention, improve employee satisfaction </li></ul><ul><li>Legal or Compliance – reduce day two items, control compliance risks, reduce fines </li></ul>Six Sigma projects may be generated from a number of sources, some examples below…
  20. 20. Project Selection Process Inputs Voice of the customer Voice of the business Voice of the employee Market and environmental factors Known solution with supporting data ? Translate into project opportunities YES NO Implement solution, follow six s principles Capable process, DMAIC project methodology Not Capable process, DFSS project methodology <ul><li>Prioritize </li></ul><ul><li>Projects </li></ul><ul><li>Strategic Fit </li></ul><ul><li>Economic Value </li></ul><ul><li>Time/Effort </li></ul>
  21. 21. Six Sigma Failure Factors <ul><li>Leaping to Solution </li></ul><ul><ul><li>Not data driven or based on faulty assumptions </li></ul></ul><ul><li>Serving the Wrong Customer </li></ul><ul><ul><li>Not based on the voice of the “next” customer </li></ul></ul><ul><li>Selecting the Wrong Projects </li></ul><ul><ul><li>Not linked to strategy </li></ul></ul><ul><li>Solution-Caused Problems </li></ul><ul><ul><li>Poor sequencing, stakeholder under-involvement, resource planning, change management or project closure </li></ul></ul>Adapted from Six Sigma’s Seven Deadly Sins by James P. Zimmerman and Dr. Jamie Weiss of Kepner Tregoe
  22. 22. Use COPQ as a Source of Projects <ul><li>Hidden Factories </li></ul><ul><ul><li>Re-work of defects in processes or products </li></ul></ul><ul><ul><li>Complex workarounds </li></ul></ul><ul><ul><li>Excessive phone calls, emails, faxes and other correspondence as a result of poor performance </li></ul></ul><ul><li>Inspections and Audits </li></ul><ul><ul><li>QA functions in the process </li></ul></ul><ul><ul><li>Back-end audits and approvals </li></ul></ul><ul><ul><li>Multiple approval steps </li></ul></ul><ul><li>Lost Sales and Market Share </li></ul><ul><ul><li>Market product requirements not met </li></ul></ul><ul><ul><li>Service or delivery requirements not met </li></ul></ul><ul><li>Fines and Other Penalties </li></ul>
  23. 23. Case Study: ING’s Life Business <ul><li>Leadership Commitment </li></ul>President of the Life business - Visible supporter of six sigma methodology - Six sigma positioned as method Life business will use to achieve its business objectives - Created the burning platform: growth and efficiency Process Owners - Build awareness, support deployment Dedicated Resources Built team of full-time MBBs and BBs - First hires 6/2005 - Certified MBB hired externally from recognized program - BBs hired internally from pool of strong candidates - External certified BBs hired to supplement six sigma expertise and accelerate team knowledge building
  24. 24. Case Study : ING’s Life Business Alignment and Integration with Business Strategy Incentives and Accountability Team aligned with core processes Project selection and prioritization supported business strategic objectives - Increase front-end service and capacity to support growth model - Improve product delivery capability - Create value through efficient in-force management Six Sigma team goals and metrics aligned with business strategy - Increase policy count growth by 10x - Improved profit margins - Enhance service capabilities and customer satisfaction metrics
  25. 25. Case Study : ING’s Life Business Quantifiable Measures and Goals Incentives and Accountability Leadership incentives put in place to support ownership of program results Shared program goals across USFS - Staffing - Program expense coverage - Training Life business unit goals - Staffing - Program expense coverage - Training - Metrics Individual six sigma team member goals - Projects - Creating the culture - Training and development
  26. 26. Case Study : ING’s Life Business <ul><li>Customer Focus </li></ul>Business Process Framework Black Belts aligned by core process area - Customer acquisition - Service the customer - Manufacture the product Functional structure versus process alignment - Business model versus shared service model Followed business and ING brand strategy - Your Future. Made Easier - Project selection
  27. 27. Case Study : ING’s Life Business Early Project Results Orange Express Goal: speed and capacity - Underwriter first-look actions improved from 7% to over 80% - Cycle time reduced by 50% - Unit cost reduced by over 60% Producer Contracting Process Goal: speed and capacity - Cycle time reduced by 70% - Variation reduced by over 80% Servicing the Customer (multiple projects) Goal: speed and cost reduction - Cycle times reduced by 70+% - Variation reduced by over 80+% - Cost reduction targets achieved
  28. 28. Learnings <ul><li>Deployment is never finished </li></ul><ul><li>Program objectives play a big part in determining the nature of commitment that is required </li></ul><ul><ul><li>Local versus global deployment </li></ul></ul><ul><ul><li>Culture change versus project execution </li></ul></ul><ul><li>Do not underestimate program support and communication challenges </li></ul><ul><li>Have additional expertise available to provide coaching and mentoring when internal resources become strained </li></ul><ul><li>Gain early commitment on metrics and goals </li></ul><ul><li>Keep senior leadership engaged throughout </li></ul><ul><li>Select top influencers to drive deployment </li></ul><ul><li>Identify early adopters and leverage </li></ul>

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