Financial Services Six Sigma

In recent meetings with clients "Productivity" has been a central topic of discussion.  Our conversations have ranged from how Productivity should be defined to how to measure and track it.  Measuring Productivity should be directly linked to your Six Sigma initiative: If financial benefits derived from the projects do not tie to the bottome line, the projects have failed.  To this end our response, at a very basic level, has been that Productivity = Revenue / Cost.  Productivity is about generating the same level of value or revenue with less cost (base & variable) or generatring more value with the same cost level.

One example of what we are talking about is lending operations (it can be SBA, mortgage, leasing...). Productivity in this world can be measured as: How many leads were generated vs. how many deals were funded - in a given time period.  So if your brokers, sales staff or distributors submitted 1000 leads and you only funded 700 of them - at a 50,000 ft level you are "productive" only 70% of the time.  The other 30% is spent on non-value add activities (adding cost but not value).  Now, the objective of this meric would be to determine the root cause of low levels of productivity.  Specifically, where you are losing these deals.  Is it at the Underwriting stage? Is it post committee reviews where you add conditions to the deal, etc...? Once you understand what drives your productivity levels you can assign Black Belts to improve it.

Sheila Shaffie - ProcessArc, Inc. 

Posted by Sheila Shaffie at 03:04 PM | Permalink | Comments (0)

Phrases and taglines aimed at conveying a sense of Quality have become endemic in the marketplace today: Customer Excellence, Service Excellence, and Customer Loyalty are ubiquitous terms used by institutions in all sectors.   These terms are being used to signal differentiation between providers of service, when in reality the actual customer experience associated with these organizations is quite similar.  This is why I call it “Quality jargon”; most often there is very little infrastructure (dedicated team, success metrics, strategy, Quality tools…) that management can point to in support of these taglines. 

 

Quality needs to begin and end with the customer and that is why it is synonymous with Six Sigma.   So at a very elemental level Quality can be defined as:  Providing to your customer what they want, when they want it and at the right price/rate…  It is only through collecting the voice of your customer (surveys, customer calls, benchmarking...) and embedding it in your everyday transactions, product development and innovation processes that one can claim Service Excellence and Customer Excellence. The more you know about your customers’ needs and how you perform to them the larger the differentiation, the larger the financial benefits.  So the next time you think Quality I hope you ask: when was the last time we talked to our customers?

Shahbaz Shahbazi - ProcessArc, Inc. 

Posted by Shahbaz Shahbazi at 11:12 AM | Permalink | Comments (0)