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  1. 1. 49 Action Steps to achieve 110% of your goals Define Design Implement
  2. 2. SIXSIGMAQUALTEC www.ssqi.com 49 Action Steps to Achieve 110% of Your Goal Table of Contents Introduction to Action Plan 1 Strategic Alignment and Deployment -4 Operational Definitions 4-5 Management Style 5-6 Metrics 6 Defect Identification and Elimination 7 The Cost of Poor Quality 7 Cultural Readiness for Deployment 8-9 Willingness to Deploy 9 Willingness to Change 10 Identifying Improvement Opportunities 10-11 Define Design Implement
  3. 3. SIXSIGMAQUALTEC www.ssqi.com 49 Action Steps to Achieve 110% of Your Goal Introduction The Categories Five years in development, the following stra- 1. Strategic Alignment and Deployment tegic goal “readiness” discussion guide is the 2. Operational Definitions result of actual performance improvement and management programs developed while working 3. Management Style with hundreds of leading national and interna- 4. Metrics – Application and Appropriate- tional companies. ness (Financial vs. Operational) This document is NOT intended to be an all 5. Defect Identification and Elimination inclusive list and should not be viewed as a (Success vs. Defect) final, exact or absolute set of inquires to realize all information needed to drive the “diagnosis 6. The Cost of Poor Quality activity”. While answering these questions, participants should be identifying or securing 7. Cultural Readiness for Deployment evidentiary documents, communication exam- 8. Willingness to Deploy ples, corporate publications, newsletters, the Annual Report and any other material which can 9. Willingness to Change support the answers given. 10. Identifying Improvement Opportunities The questions are grouped into 10 general The matrix of questions is the result of years of categories, allowing for a quick summary or application and a collaboration of the SSQI Man- feedback document to the “most senior lead- aging Partners, who would welcome the oppor- ers”. The final analysis should be detailed by tunity to discuwith you in more detail. Sugges- player (serving as a Stakeholder Analysis) and tions for improvement are always welcome. presented to team members. Define Design Implement 1
  4. 4. SIXSIGMAQUALTEC www.ssqi.com How to Use the Mini-course 1. Who are the critical stakeholders for your enterprise? How do you identify their needs Based on our research, this Mini-Course is the and wants? perfect tool to share with your executive stra- _________________________________________ tegic team. We recommend that you print out a copy for each member and keep a version with _________________________________________ your responses for future reference. _________________________________________ _________________________________________ Strategic Alignment, Deployment and Management _________________________________________ 2. What are the strategic goals and objectives Reaching your strategic goals requires a clear of the enterprise? Your organization? How were picture of your current “goal state” and the they identified? identification of those performance gaps that are preventing you from achieving the goal. _________________________________________ Your organization must know and understand its _________________________________________ strategic direction through effective communi- cation. It must also assess internal and external _________________________________________ threats and challenges, as well as collect and _________________________________________ incorporate the voices of various stakeholders of the enterprise. _________________________________________ Identifying the most critical items to address, 3. How are the goals of the enterprise commu- developing targets and plans for achieving nicated to the organization? them, and dedicating the appropriate financial _________________________________________ resources are all facilitated by being able to measure the right things in the right way. _________________________________________ In order to succeed, your organization must _________________________________________ understand the various constituents of the en- _________________________________________ terprise and how to secure and represent their voices. Critical agenda items must be identified and communicated throughout the organization. Define Design Implement
  5. 5. SIXSIGMAQUALTEC www.ssqi.com Strategic Alignment, Deployment 7. Are plans connected to capital and operating and Management (cont.) budget planning activities? _________________________________________ 4. What/who is your greatest competitive threat? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 8. How are funds allocated to projects and programs? _________________________________________ _________________________________________ 5. How do you measure your progress towards those goals and objectives? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 9. In the current cycle where are you in relation to your goal targets? _________________________________________ _________________________________________ 6. What plans are in place to achieve your goals? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Define Design Implement
  6. 6. SIXSIGMAQUALTEC www.ssqi.com Strategic Alignment, Deployment 13. Does your organization deploy business and Management (cont.) plans? How are they measured/managed? _________________________________________ 10. How are you currently managing current projects? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Operational Definitions _________________________________________ 11. How does your organization manage and From the development of position descriptions monitor projects in general? to the articulation of responsibility by position or title, your organization’s culture and the at- _________________________________________ titude that has cascaded throughout are deter- _________________________________________ minants of success. _________________________________________ 14. What is your role and responsibility as you see it? _________________________________________ _________________________________________ _________________________________________ _________________________________________ 12. Does the strategy of your organization reach down the organization chart to the operational _________________________________________ level? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Define Design Implement 4
  7. 7. SIXSIGMAQUALTEC www.ssqi.com Operational Definitions (cont.) 17. Are you effective at delegation? What do you think your staff would say? Is your manager ef- 15. How does your staff see your role and re- fective at delegation? sponsibilities? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 18. How flexible are you? Your staff? Your man- 16. How are roles and positions defined in your ager? operation? Who crafts those definitions? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 19. Are performance improvement efforts tied to performance management systems? Management Style _________________________________________ _________________________________________ How the direction is set and driven at various levels of the organization, as well as the way _________________________________________ in which cross-functional decisions are made, _________________________________________ will reveal how “silo-ed” your enterprise is - a potential predictor of the difficulty in address- _________________________________________ ing significant business issues. Flexibility in the face of change and the align- ment of compensation systems with perfor- mance improvement will clearly relate the importance of your initiative to all. Define Design Implement 5
  8. 8. SIXSIGMAQUALTEC www.ssqi.com Management Style (cont.) 22. Is your organization data driven? Is data respected or rejected? 20. How are cross functional issues addressed? _________________________________________ By silo or cross-functionally (collaboratively)? How are decisions normally made? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 23. Does your organization use a Balanced Scorecard? _________________________________________ _________________________________________ 21. Where does budget accountability lie? How many layers deep in your organization? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 24. What are the critical measures of the busi- ness and the most pivotal functions? _________________________________________ _________________________________________ _________________________________________ Metrics _________________________________________ To work toward achieving its goals, your orga- _________________________________________ nization must be metrics-driven. An organiza- tion’s key performance indicators reveal a lot _________________________________________ about its attitude toward measurement. Are they communicated, understood, and used to manage? Define Design Implement 6
  9. 9. SIXSIGMAQUALTEC www.ssqi.com Defect Identification Elimination 27. How are costs associated with processes and operations measured? How specifically and clearly can your organiza- _________________________________________ tion articulate its problems? Where is the focus? Who has the responsibility? Are problems recur- _________________________________________ ring, or are they kept in check? _________________________________________ 25. How do you define a defect? A problem? Do _________________________________________ problems return after being corrected? _________________________________________ _________________________________________ 28. What process is in place for approval and _________________________________________ tracking of funded projects? And results? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ The Cost of Poor Quality _________________________________________ Is there a full appreciation for the full scope of 29. What are some of the areas (processes, a defect’s impact on the organization? products or services) where your organization is wasting money? 26. How do you understand the cost of lost value of operations? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Define Design Implement 7
  10. 10. SIXSIGMAQUALTEC www.ssqi.com Cultural Readiness 33. How does the line organization look at changes? With fear of loss of job or as a natural Performance improvement initiatives can excite evolution? and drive you to greater heights, or they can _________________________________________ engender resistance, even fear if approached inappropriately. _________________________________________ 30. Is yours a process-driven organization? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 34. What is your organization’s tolerance for change? _________________________________________ _________________________________________ _________________________________________ _________________________________________ 31. What methods are in place today to improve operations and service? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 35. How often do you hear the phrase, “we have always done it that way?” _________________________________________ _________________________________________ _________________________________________ _________________________________________ 32. Does your organization have union issues? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Define Design Implement 8
  11. 11. SIXSIGMAQUALTEC www.ssqi.com Cultural Readiness (cont.) 38. Are your compensation systems connected to performance, projects and improvements? 36. What is your organization’s attitude toward _________________________________________ the following: change, Six Sigma, Lean, Process Improvement...? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 39. Has your organization deployed change pro- grams before? How effective were they? _________________________________________ _________________________________________ _________________________________________ Willingness to Deploy _________________________________________ By identifying goals, and measuring and man- _________________________________________ aging toward them, you will develop a clear definition of success. But is there a sense of _________________________________________ urgency around achieving these goals? 40. If a previous improvement initiative failed, Have you failed in the past, making the creation what were the 3 major reasons? of support or interest in this effort more dif- ficult? _________________________________________ 37. What does your organization do well? Poorly? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Define Design Implement 9
  12. 12. SIXSIGMAQUALTEC www.ssqi.com Willingness to Change improvement, and finally bettering its chances of achieving its strategic goals. Success in achieving your goals can stem from 43. What are the 3-5 top issues you face today? identifying potential roadblocks to change, as How would you prioritize them? Would your well as parts of the organization where the staff see them in the same order? sense of commitment to improvement is the highest. _________________________________________ 41. Is the organization open to new ideas? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 44. What are the 3-5 issues that will face your company in 2007/2008? _________________________________________ _________________________________________ 42. Are you personally committed to the evolu- tion of the enterprise? How will you show that _________________________________________ commitment? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Identifying Improvement Opportunities Generating positive results will increase your organization’s desire for improvement, thereby improving its ability to change and drive more Define Design Implement 10
  13. 13. SIXSIGMAQUALTEC www.ssqi.com Identifying Improvement 48. Does Training = Learning? Opportunities (cont.) _________________________________________ 45. Which of these issues have your tried to _________________________________________ solve in the past and failed? Others? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 49. How are projects selected and targeted? _________________________________________ _________________________________________ _________________________________________ _________________________________________ 46. How are cross-functional issues addressed? _________________________________________ By silo or collaboratively? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ 47. Does your organization consider itself a Learning Organization? Why? Evidence? _________________________________________ _________________________________________ _________________________________________ _________________________________________ _________________________________________ Define Design Implement 11
  14. 14. time for a Fitness Revolution? Why the tactics of connecting strategy to execution matter Define Design Implement
  15. 15. SIXSIGMAQUALTEC www.ssqi.com Time for a Fitness Revolution? Why the Tactics of Connecting close and service loans quickly enough to meet Strategy to Execution Matter customer demand. This state of overload, and the pain of lost op- While nearly every industry suffered during portunity, sparked imagination. How can we the recent economic downturn, by comparison improve the cycle times of all our processes? mortgage companies enjoyed a flowing stream How can we remove bottlenecks and dead time of success. Yet the lending industry as a whole from our operations? is by no means optimized, and tougher times are ahead. This is how we can make more money: not by merging and acquiring more, but by doing what “Achieving immediate strategic superiority we do better, in a different way. Surely we can through acquisition has been the order of the merge and acquire, but can we achieve systemic day,” says Dale Meder, Bank of America senior operational efficiencies that reduce cycle time, VP of business process excellence. “But now the minimize errors, cut costs, increase capacity industry is seeking to achieve lasting opera- and delight customers? tional superiority through improved process capability.” An Operational Focus If Meder sounds like a consultant, it’s because he once was. But now he’s one of those who The service sector in general, and the specific very much practices what he preaches. Bank of world of loan servicing, is undergoing a collec- America, since launching operational improve- tive epiphany of sorts. Driven by Wall Street, ment efforts, has identified more than $1 billion it has recognized that improvement initiatives, in business improvements as a result of applying such as Six Sigma and Business Process Manage- Six Sigma and Business Process Management in a ment, are as vital as finding the next scheme planned, measured and systematic way. for top-line growth. Here’s what is sparking Bank of America and most other large financial institutions. The boom of the nineties broke the seams of “transactional capacity” for many lending and servicing institutions that couldn’t originate, Define Design Implement
  16. 16. SIXSIGMAQUALTEC www.ssqi.com Could it be that the analysts themselves, post- area will increase the capacity to pro- Enron, have decided that growth in general is cess more loans with the same amount of not as golden as they thought? Growth can be resources. bought and sold – or cooked up in the books – to 3. Complexity in the financial services indus- an extent. Beyond this, the real path of gener- try will materially increase, as the lines ating value (profit) in a financial services busi- between banking, investing and insuring ness lies in the ability to lower cost and time break down. This introduces heterogeneity per transaction. into formerly homogeneous strategic and The pertinent question isn’t, “How much rev- operating environments. With more puzzle enue can you show today?” The real question is, pieces of different shapes on the table, “How much value did you create, for your cus- the task of putting them together in a way tomer and yourself, per unit of time or cost?” that satisfies customers and benefits the business is more demanding. The mergers, the marketing, the growth-by-ac- quisition mentality has in a sense overachieved 4. Figuring out how to provide more value – with a little help from Greenspan and an per customer transaction, rather than how anemic stock market. Now it’s time to focus on to acquire more transactions, leads to pure operational excellence. market leadership. Getting your house in order, and delivering superior transactions and services, has as much or even more Why to Focus on Operational potential for growing a business than a Excellence: pure acquisitions or merger mindset. What does all this mean? It means delighting 1. Interest rates are expected to rise, which the customers you have may be more impor- will have a dampening effect on the refi- tant than finding new ones, who you lose later nance market. With dropping demand and because you don’t bring your strategies to bear top-line growth in this area, lenders and on their real needs, today, everyday, across the servicing organizations will have much to entire spectrum of what you do. gain by streamlining operations, building error-free capability and reducing costs. 2. Home ownership as a percentage of the population is still on the rise, so demand for new loans should remain strong. Efforts to reclaim wasted time and cost in this Define Design Implement
  17. 17. SIXSIGMAQUALTEC www.ssqi.com All of business is a relationship between a ingly do what banks and insurers do, insurers “need” and a “do.” While sound strategy for- can fuse themselves with a bank or a brokerage mulation takes care of identifying customer and house, and so on. business needs, sound operational configura- All the product lines are merging, and it is tion takes care of “doing” in accordance with becoming fashionable to be the do-all, end-all defined and measured standards. solution for everyone’s banking, investment and In other words, financial services organizations insurance needs. A visionary mortgage company better get busy figuring out how to become can see itself as a onestop- shop for portfolio error-free when they handle the customer’s advice, checking, savings, car insurance, home- money, process payments, send out bills, close owners insurance, health insurance, mortgages, a loan, collect outstanding debts, answer the credit cards and debit cards. phone – when they do anything in the context Building the internal systems – the infrastruc- of a business relationship. ture – for making that vision possible is another matter. There’s a few working parts that have Where Strategy Meets Execution to be mashed together, some strategies to align, some processes to merge and an intensive In a healthy financial business, or loan servic- amount of linkage and coordination. ing company, executives commit to critical Let’s bring it down to the level of a loan servic- strategies and performance targets on a one- to ing organization, which has as much imperative three-year horizon. “Formulating strategies as any to improve its operational capability beyond five years is often folly,” says Meder, across a broad spectrum of functions. Servicing “because the basic landscape of the financial organizations should be asking the same ques- services industry is shifting dramatically.” tion their larger parent companies are asking: Furthermore, the notion that long-term strat- how can I extract more business out of my cus- egy can hold up in a volatile market is flawed. tomers and take care of them too by improving A mindset of flexibility, not staunch adherence my operations? to long-term goals, is the ticket for managing the forward-looking plans of an enterprise as circumstances change and as new data dictate. What’s changing is that banks can increasingly offer the same transactions as brokerages and insurance companies, brokerages can increas- Define Design Implement
  18. 18. SIXSIGMAQUALTEC www.ssqi.com The mantra is to increase value to and income Easier said than done. Remember the IBM com- from existing customers, while raising the stan- mercial in which the boss says something close dard of services provided. In short, we ensure to this: “This is a brilliant strategic plan…but is customer retention through exceptional service it executable?” with one hand, and we continue to refine our It’s always easier to make the plan than to make strategic intent with the other. the plan happen. This is where Kanri comes in: The Japanese have a phrase for the idea the systematic creation and control of change. of strategy tied to execution. They call it Kanri is the way you manage and control the “Hoshin Kanri.” Hoshin literally means “direc- processes of value creation. tion needle,” as in a plan or course of action. This is where strategy meets execution: in the Kanri literally means “control reason,” as in the way you do business, your “core processes.” mechanistic management of change. It’s the way you originate, the way you fulfill, In plain English, if you want to improve your the way you close and the way you service that business, you must systematize the way you matters. These are the value pipelines that flow set, deploy and execute your strategies. Hoshin through and beyond the various functions and Kanri is a system for translating critical strate- departments, the cost and profit centers, of the gies into critical metrics. It then deploys those place you call “work.” metrics throughout the hierarchy of the value chain in a cascading, cause-and-effect way. Business Process Management Strategies are broken down into corporate goals, which are broken down into business unit Business Process Management is a tool used by objectives, down to the lowest level of mea- business leaders to derive clarity around how an surement detail. As objectives are cascaded, organization’s core processes function, inter- they are transformed into tactics and specific relate and interact with each other. While we improvement projects at the lower levels. This all intuitively “know” how we do business, the is how and where defects are actually elimi- reality is that we don’t. Whoever you are, and nated and improvements are realized. wherever you work, you may think you know This measurement system design is now what how your organization originates and closes drives the entire organization. Performance tar- loans, but you have another thing coming. gets are set, accountability for meeting targets is established and everyone in the entire place knows what they have to do: drive their process to improve their metrics Define Design Implement
  19. 19. SIXSIGMAQUALTEC www.ssqi.com Each individual in a value chain (process) has The goal is always the same: to get healthy. A blind spots about how the process really works. Hoshin Kanri system provides the technology When all the many people who work on the pro- for establishing a scientific basis of procedural cess interact, their blind spots interact as well. health intervention. Business Process Manage- This is why inefficiencies happen, why rework is ment is the machine used to diagnose where done, why bottlenecks occur and why custom- the performance tumors are. Six Sigma and ers aren’t always delighted with what you do for the like are the instruments used by expert them. surgeons when performing the improvement operation. No one is necessarily a good or bad employee, manager or executive by definition. But a Now we have the context and traction to trans- company’s Business Process Management infra- late strategy into flawless, or at least healthy, structure is good or bad by definition. Inasmuch execution. Business Process Management is the as certain design methods inoculate a produc- nexus space between the brains of the strate- tion line against variation (the root of all inef- gists and the hands of the executioners. In ficiency and wasted cost), a Business Process medical terms, Business Process Management Management system inoculates a loan servicing is the x-ray that tells the improvement surgeon organization against variation, or poor quality, where to make the incisions. in what it does. Business Process Management connects strategy Business Process Management leads us directly to execution in the most organized and action- into facing who we are and, even more, how able manner possible. It is this connection that we do business. It leads us into “mapping” our brings life and torque to an enterprise. The processes – drawing them out on a wall or in a strategy without the execution is a pipe dream; piece of software. It also drives us into collect- the execution without the strategy is a ship ing valuable data about how process inputs are gone awry. morphed into outputs through some “opera- Most of us have been involved in schemes to tional transfer function.” “improve the way we do business” at least once Remember that Hoshin Kanri is the direction in our careers and probably more than once. and dashboard by which a loan servicing com- pany can fruitfully, and scientifically, engage in making itself better and more profitable. The causally broken down metrics create a dashboard of blinking lights by which the reds, yellows and greens are all the time, on and off, depending on how well critical processes are meeting their objectives. Define Design Implement
  20. 20. SIXSIGMAQUALTEC www.ssqi.com How many times has your involvement, regard- Your Strategic Partner less of how high or low you were in the organi- zation, been clearly delineated and understood? Six Sigma Qualtec is a premier provider of How much ambiguity has accompanied former process management and performance improve- attempts to improve your scope of operational ment consulting, training, and technology solu- control? tions that drive breakthrough growth, produc- Hoshin Kanri and Business Process Management tivity and value for our clients. create the foundation for intelligently moving in We are unique in our ability to customize the and out of a process battlefield with your SWAT integration of management disciplines to meet teams – your Six Sigma black belt or green belt the industry-specific requirements of global projects, your quality improvement specialists, leaders in financial services, natural resources, your process engineers. manufacturing, process and service industries. It’s not a haywire system of training a bunch Six Sigma Qualtec of people and turning everyone loose on any 821 Alexander Road, Suite 130 projects or opportunities they can find. Real Princeton, NJ 08540 • USA operational excellence grows up from only one (800) 247-9871 or (609) 925-9458 thing: taking the pie-in-asky vision of what a info@ssqi.com www.ssqi.com business wants to be and shaping it into some- thing actionable. Six Sigma Qualtec 1295 W. Washington Street, Suite 208 Business eventually and always comes full circle Tempe, AZ 85281 • USA from strategies set to actions taken, and around (800) 247-9871 or (480) 586-2600 again. Anything you can do to make this cycle info@ssqi.com www.ssqi.com tighter, faster and better will yield greater con- trol power (Kanri) in keeping the company on Six Sigma Qualtec course (Hoshin). P.O. Box 2959 Kenilworth “It’s such a bold step to actually try and get CV8 1XR 140,000 people aligned from the top of the United Kingdom organization to the bottom in all the businesses +44 (0) 1926 859555 we are in,” says Bank of America’s Meder. info@ssqi.co.uk www.ssqi.co.uk “When complete, it will create an impetus I don’t think will be stopped.” Define Design Implement
  21. 21. Six Sigma Qualtec Six Sigma Qualtec Six Sigma Qualtec 821 Alexander Road 1295 W. Washington Street P.O. Box 2959 Suite 130 Suite 208 Kenilworth Princeton, NJ 08540 • USA Tempe, AZ 85281 • USA CV8 1XR toll free (800) 247-9871 toll free (800) 247-9871 United Kingdom phone (609) 925-9458 phone (480) 586-2600 tel +44 (0) 1926 859555 fax (609) 419-9855 fax (480) 586-2586 fax +44 (0) 8701 400023 email info@ssqi.com email info@ssqi.com email info@ssqi.co.uk website www.ssqi.com website www.ssqi.com website www.ssqi.co.uk Copyright 2007. Six Sigma Qualtec. All rights reserved.