institutionalizing six sigma into your entire organization for business results

Everyday Excellence:Institutionalizing Six Sigma into your Entire Organization for Business Results

William E. Welker Andrew P. BilletVUE Master Black Belt VUE Master Black BeltThe Vanguard Group The Vanguard Group

WCBF 2nd Annual ConferenceSix Sigma for Financial ServicesNew York City, New YorkMay 11-12, 2006

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•VUE: Vanguard and Six Sigma

•Why implement Everyday Excellence

•The Components of Everyday Excellence

•Everyday Excellence at Vanguard

•Lessons Learned

Agenda

•Vanguard Unmatchable Excellence: Vanguard and Six Sigma

•Why Implement Everyday Excellence



•Lessons Learned

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•Lessons Learned

Vanguard Unmatchable ExcellenceVanguard Unmatchable ExcellenceVanguard and Six SigmaVanguard and Six Sigma

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•Lessons Learned

To help clients reach their financial goals by being

the world's highest-value provider of investment products and services.

To help clients reach their financial goals by being

the world's highest-value provider of investment products and services.

Corporate Mission

Value Proposition

The Vanguard Group

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•Lessons Learned

Vanguard Worldwide Locations

Malvern, PAGroup Headquarters

Brussels

Melbourne

Tokyo

Scottsdale, AZ

Singapore

Amsterdam

Charlotte, NC

Asia/Pacific RimEuropeThe Americas

Paris

Sydney

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•Lessons Learned

$985+ billion in U.S. Mutual Fund assets under management 130 Investment Offerings 11,000+ Crew members Leading provider of diverse & disciplined investment offerings

Mutual Funds/Brokerage/Annuities/Asset Mgt College Savings/Financial Planning/Advice Cash Management/Exchange-Traded Funds Institutional (Defined Contributions, Defined Benefit, NQP)

Malvern, PennsylvaniaCharlotte, North Carolina

Scottsdale, Arizona

Vanguard Domestic Locations

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•Lessons Learned

The Evolution of VUE

2000 2001 2002 2003 2004 2005 2006…

ContinuousImprovement

ProcessExcellence

BusinessProcesses

CrewEngagement

EverydayExcellence

VUE Today

Phase 3: Process Evolution

End-to-End Process Focus

Full Crew Involvement

Building upon DMAIC Foundation

Flexible Solutions Business Results

Phase 1: Awareness

“Why Six Sigma at Vanguard?”

Dashboard Creation and Implementation

Introduction to Bratton and DMAIC

Phase 2: Infrastructure

Strong DMAIC Foundation

Bring Training In-House

Increase Certification Rigor

VUE Framework & Program Structure

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•Lessons Learned

The Everyday Excellence ApproachThe Everyday Excellence ApproachWhy are we doing it?Why are we doing it?

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•Lessons Learned

The Problem…

The majority of VUE tools and communications are delivered via a top-down approach. As the “line of sight” grows, a question presents itself: “Are all Crew getting the whole message?”

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•Lessons Learned

The Solution…

The bottom-up, Everyday Excellence approach ensures that all Crew not only receive the VUE tools and communications, but become active participants, thereby harnessing the true power of VUE.

VUE

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•Lessons Learned

The Components of Everyday ExcellenceThe Components of Everyday ExcellenceWhat are they?What are they?

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•Lessons Learned

Dashboard

6σ

Development

Metricsin

Motion

Dashboards are leveraged by Crew to measure relevant information on team performance.

Voice of Crew is encouraged and acted upon by both the Crew and Vanguard Leadership.

Broken Windows are “Quick Hit” projects that enable the Crew to take action rather than just point out problems.

Crew Development is critical to encourage involvement and highlight achievement.

Metrics in Motion is the framework, bringing everything together as an effective management tool

and leveraging the power of all Vanguard Crew!

Everyday Excellence

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•Lessons Learned

MiM: Dashboards

Dashboard

• “Dashboards” are created at the team level and provide clear understanding of how individual performance impacts the team, department, and Vanguard.

• Dashboards facilitate accountability on team performance and encourages the Crew to use VUE on a daily basis.

• Dashboards are evolving from a reactive tool to a more proactive tool as Crew modify the measures from lagging metrics to leading metrics.

John Doe, Team StriveCore Team Level Dashboard (Sample)

Sample Team Level Dashboard

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•Lessons Learned

MiM: Voice of Crew

• “Voice of Crew” is a similar concept to Voice of Customer or Voice of Business whereby Vanguard improves via Crew suggestions.

• The purpose of the program is to identify, track, and report status of the suggestions made by Crew to Vanguard leadership.

• Solutions are usually quick wins and typically involve the Crew Member who made the suggestion initially.

Date Voice of Crew Suggestion OwnerNo

Action Under

ReviewAssigned Implemented

9/2

Part Services specialty number job aid in order to avoid multiple calls to get in touch with correct unit. Hamilton 1

9/9Successor custodian form - meeting with marketing to get the word out Edney 1

9/9 Change of ownership tool - more use Edney 19/16 New fund request form. Is this feasible?

Addition to the invest by mail slip? Jobs 1

9/16Corporate Resolution information not available on WAVE - Complete Dinan 1

9/16Correspondence Dashboard - Segment improvement target increase Baptiste 1

9/16Add quality percentage to Correspondence Personal Dashboards - Baptiste 1

9/16

Marketing e-mails should be sent in such a way that they can't be directly replied to - Complete Baptiste 1

9/16Low number of VOC coming from and implemented from AZ teams - Complete Riccio 1

9/16 Lack of cross-training of Team Riccio 1 9/16 ERS Fielder abandoned calls - Attyah 19/23 (BW) Missed Calls - 17% high was

deemed as an anomoly.- Complete Info Center 1

9/23Team members who miss daily huddles are not being informed of updates. - E. Hawkins 1

Sample Voice of Crew Report

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•Lessons Learned

MiM: Broken Windows

• “Broken Windows” are improvement opportunities where the root cause, and therefore “fix,” is obvious.

• The purpose of the program is to identify and fix opportunities within a business unit or division through Crew empowerment.

• Solutions are quick wins, which may have an immediate and beneficial impact on the client directly or indirectly, on the business unit in terms of efficiency gains, and on Crew morale.

Sample Broken Window Report

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•Lessons Learned

MiM: Crew Development

6σ

Development

• Crew Development refers to the growth of Vanguard Crew into effective leaders.

• “Back to Basics” is a Vanguard leadership program that focuses on people management.

• Crew Development is tracked and delivered through, among other things, one-on-one’s, personal performance measures, training, and rewards and recognition.

Sample Crew Development Report

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•Lessons Learned

Metrics in Motion (MiM)

CrewTeam Leader

Team Members/Crew

DataMetrics TeamSenior Team

Sponsor and Directs

“On the floor, outside the Crew’s cubicles”

Metrics in Motion Presentation

A Crew-led forum for presenting business unit-level dashboards/measures, Voice of Crew, Broken Windows, and Crew Development to senior management and fellow team members.

On a weekly basis, the Senior Team visits a prescheduled number of different teams in a venue visible to all Crew to participate in team presentations.

Team presentations are conducted by the Crew to senior management, and are time-boxed – typically for 15 minutes per team, and are usually held outside the Crew’s cubicles. Do not move Metrics in Motion into a conference room.

Team presentations usually cover four key topics: business unit dashboard/measures review, Voice of Crew updates/progress, Broken Windows ideas/progress, and Crew Development.

What is it?

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•Lessons Learned

Everyday Excellence at VanguardEveryday Excellence at VanguardHow is it going?How is it going?

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•Lessons Learned

Everyday Excellence at Vanguard

< Everyday Excellence Video > < Everyday Excellence Video >

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•Lessons Learned

Everyday Excellence at VanguardEveryday Excellence at VanguardWhat have we learned?What have we learned?

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•Lessons Learned

Lessons Learned

•Everyday Excellence is a culture, not a fad. Therefore, expect Everyday Excellence to generate excitement and significant change.

•Everyday Excellence provides a clear “line of sight” for the Crew while emphasizing how individual contribution ultimately links to company success.

•Everyday Excellence provides the majority of Crew members with a rigorous, yet simplified approach to continuous improvement while leveraging the same quality tools that are taught and used today in VUE.

•Everyday Excellence requires total top-down commitment to ensure bottom-up success!

•Everyday Excellence enables Crew members to feel empowered to question, recommend, and improve processes - “I can make a difference!”

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•Lessons Learned

Questions?Questions?

Thank You!

““Everyday Excellence is harnessing the power of 11,000 Crew Everyday Excellence is harnessing the power of 11,000 Crew members who are committed to continuously improving what members who are committed to continuously improving what we do every day.” we do every day.”

--John J. Brennan, CEO, --John J. Brennan, CEO, VanguardVanguard

institutionalizing six sigma into your entire organization for business results

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