Success Story #2 Bank One Bigger Now Better

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.

The Burning Platform Survival then Excellence

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…

• Sustaining the fundamentals
• Service excellence
• Supporting revenue growth
• Creating a high performance culture

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.

Focus 2 0 A Pathfinder Approach to Improvement

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:

“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:

1. Massive corporate training. There has been no widespread training beyond a core group of experts (next page). Though the knowledge base has been building slowly as more and more people participate in Focus 2.0, Jim Kaminski says, “I do not anticipate that there will be any formal training in Lean and Six until the organization has matured in total. There is still so much opportunity in areas just doing the fundamentals of problem solving using simpler tools.”
2. Creating project teams. Bank One’s NEO division has avoided the typical dedicated project team model. A less-structured model has, ironically, allowed them to involve more people because there is no prerequisite for training nor requirements for long-term commitments. And the more people involved, the greater the ownership of Focus 2.0. “The amount of energy and enthusiasm the participants have is a momentum we cannot replicate with project teams,” says Jim Kaminski. “Second, Bank One is sensitive to the changes that creating project teams forces onto the workforce, including the need for shuffling workloads, the unwelcome responsibility that teams face if hard choices have to be made, etc.” (However, more traditional teams are likely in the cards in the future.)

Creating the Focus 2 0 Infrastructure

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.

1. However, creating a large, trained workforce of Black & Green Belts right away didn’t really fit in Bank One. So they’re taking a different approach to building an infrastructure that will work for them. It has two main elements: (1) a simple architecture, (2) a small cadre of internal experts.

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.

Rollout of Focus 2 0

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:

• On Day 1, NPC staff (the NEO internal consultants) interviewed participants. The interviews centered on the business unit goals and business objectives, performance against objectives, current initiatives to achieve the goals and objectives, barriers, and resource limitations.
• On Day 2, the NPC staff introduced the business unit leaders to Focus 2.0 concepts (time-based strategies, just-in-time, push vs. Pull systems, etc.). The goal of the session was for NPC and the business units to start building collaboration on future Focus 2.0 pilot projects to address cross-functional reengineering and process improvement needs.

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 purpose is to take a cross-functional view of the process or work area. In the new approach, the goal was to look at the business from an end-to-end perspective, using collaborative sessions among areas affected.
• Participants are people who are directly involved in (and usually responsible for) various parts of the process. Typical resource commitments include 8 to 12 people who often represent different cross-functional areas. The “event” team composition is divided into thirds: one-third are very hands-on (operators, supervisors); a third are managers and internal suppliers; and the final third are outsiders, people who can look at the process with fresh eyes—typically, it is the members of the NPC group that fill this role. “NPC also stays engaged with the team after the Focus 2.0 event to assist them in overcoming implementation barriers and to provide project management support,” says Assistant VP Tim Williams.
• Participants are pulled off their jobs, for several days at a time. This is perhaps the most difficult aspect of the “improvement event” approach. Nobody wants to be pulled off their jobs. But the NPC group has worked hard to ensure that every event is centered on priority issues and generates quantifiable successes. This approach minimizes the negative effect that would occur if the time away was wasted on trivial problems or limited gains.
• The work leverages a Lean format (with DMAIC concepts where possible). The goal of each event is to come away with concrete Improve action items that are linked to well-defined problems in the process or area being studied.

The basic improvement event structure is always the same, with the specifics tailored to fit different situations.

• Day 1 is typically an afternoon spent with NPC training participants on topics that cover basic concepts focusing on three Lean concepts: why cycle time matters, how to distinguish between value-added and non-value-added work, and identifying waste. NPC also reviews activities that the team will undertake the rest of the week.
• Day 2 is spent looking at the current process, leveraging the tools, and building on ideas from Day 1. Participants do a “unit walk,” which is a tour of operations. Participants simulate being a work item flowing through the process. The group visits each step of the process, providing an opportunity for participants to hear from those who work in each area. The group then creates a value stream map (a picture of the “As-Is” situation) that captures the basic process steps, value- and non-value-add work, cycle times, number of steps, rework loops, queuing delays, WIP, transportation time, etc.
• Day 3 is designed around clarifying problems and brainstorming solutions. The team then reorganizes the value stream (on paper) or creates a “Should” map that depicts how the process would need to function to solve the identified problems. The outcome includes developing action plans for implementing solutions or trial simulations for Day 4.
• Day 4 is used to test the solutions, conducting a simulation within the operations if possible. The group quantifies the improvement through estimates of reduction in travel time, queuing time, work-in-process (WIP), number of steps, number of forms, and so on.
• Day 5 entails a formal report out presentation by participants to the sponsor.

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.

Results

The NEO group has quantified a number of different measures of success for each of the projects they’ve conducted. Their figures show that:

• Cycle time improvements have ranged from a minimum of 30% to nearly 75%, measured sometimes in minutes (one administrative process went from 20 minutes to 12 minutes) and other times in days (a complaint resolution process dropped from 30 days to 8 days).
• Fiscal indicators have all been positive as well. A project described later in this book (see p. 337) is allowing Bank One to improve revenue. Other projects have led to cost reductions or loss avoidance in the thousands of dollars.

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.”

Challenges

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:

• Making Lean a priority amidst the other initiatives. People have to see that Lean tools can help them to achieve their goals.
• Speaking in the organization’s language. As noted in Chapter 1, Lean and Six Sigma both evolved in manufacturing environments, and the language is sometimes challenging for service personnel. That’s why NEO is using pilot projects to demonstrate successes with Lean and Six Sigma tools. Their education and communication now use these success stories so people can marry the terminology and tools application to a processing world they are familiar with.
• People’s ability to match their process issue/need with Focus 2.0 (Lean as their solution). People in service environments simply aren’t used to recognizing waste in their processes, nor seeing that Lean can help eliminate that waste. Building such an awareness will just take time.

Lessons Learned

The key lessons that Darryl Greene and his colleagues would share with others include:

Give the business units all the credit

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.

Modify the model to fit your industry and organization

The NEO group in Bank One is modifying Lean Six Sigma to fit the financial industry, and tailoring deployment strategies to fit their organization.

• Support exists at the top, but they are creating pull from bottom up by generating success at the frontline level.
• They are not doing widespread training but instead using a demonstration phase to engage people in deployment and have them learn from experience how Focus 2.0 approaches can help them (which also creates pull).
• They avoid using Lean Six Sigma language: “My efforts at implementing Lean and Six Sigma in a services industry has shown that in their typical form, they are rejected,” comments Assistant VP Jim Kaminski. “The terminology is different, the methodology is too cumbersome, the number of tools needed are excessive, it scares people, and the only proof it works is from manufacturing applications. In our event approach or pilot, we are able to design a methodology, present only essential tools, and use terminology in language that is reinforcing rather than intimidating.”

Go at a pace that suits the organization s readiness

“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

Focus on creating pull; don t force this on people

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.

Cross functional problem solving

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.”

A Lean focus is better suited to events than is quality

The NPC group initially identified two different kinds of improvement events:

• Flow events designed around the application of Lean concepts in order to streamline the process, reduce cycle time, eliminate waste
• Quality events targeted at eliminating specific defects from the process (i.e., primarily using Six Sigma approaches)

  “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.’”

  —Darryl Greene,

  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.”

Earning the Right to Continue

“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:

• Don’t apply the tools in an area that isn’t ready… it will not represent normal circumstances and therefore any benchmark data to be used with others in the organization will be inaccurate. If you try to apply Lean Six Sigma in an area that has no foundation for improving performance, it will take longer to execute projects, and results are likely to be disappointing—dynamics that no one wants to create during deployment.
• Start small… build successes… then sell, sell, sell.
• Be selective with your hosts for pilots. You need a great sponsor and someone who is respected within the organization for initial projects. That way, when success occurs, you’ll have a strong, influential advocate, whose impact amongst peers is much greater than your own.

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.