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Cases, Service

Do You Have a Clear Line-of-Sight?

Whenever I entered the management team meeting at MyBank, I had my state-of-the-art PowerPoint pitch showing the performance of each department and its core processes as part of our dashboard. Every month, we got the latest underlying data together, aggregated them and displayed an overall dashboard of how the business was doing. With that, we had a clear Line-of-Sight.

For this particular month, my dashboard highlighted only one indicator pointing south, i.e. showing a significant decrease in performance. The traffic red highlighted “Client Management” (Figure 1). Client Management is the business unit that handles our relationship with dealers and retailers in the different industries. They issue our loans for Sales Financing.

Dashboard gives a clear line-of-sight

Figure 1: Balanced Score Card of MyBank


Gerald, Director Sales Finance was able to shed some light on the significant drop in performance. Drilling down step by step from Client Management via Sales Finance and Used Car Financing he concluded that the indicator for Dormant Car Dealers went up (Figure 2). This meant that the percentage of Car Dealers who are on contract but do not generate loan requests for more than three months, went into a red zone. The initial root cause analysis failed to reveal any obvious reasons for the change. Though, he and his team decided to start a multi-disciplinary project on the underlying process in order to get the Car Loan business back on track.


Dashboard - Driver Tree for Client Management

Figure 2: Driver Tree for Client Management

Getting a Balanced Perspective with a Line-of-Sight

Having a clear understanding of the health status of the organisation is an important leadership task. It involves managers at all levels. The health of the organisation, as many companies knew even before Kaplan and Norton emphasised, is not only apparent in its financials. Following Kaplan and Norton’s Balanced Scorecard, it is visible in a Customer Perspective, an Operations Perspective, a Learning and Growth Perspective and – of course in the Financial Perspective. Whereas the Financial Perspective involves merely lagging indicators, i.e. indicators like revenue, costs and margin that show the result after product or service have met the customer, the Customer Perspective leaves some room for reacting on customer feedback before the financials turn red.

However, the objective should be to identify the drivers for customer satisfaction and consequentially for financial results. These drivers are usually visible in process performance and in the organisation’s capability to learn and evolve fast, long before customer satisfaction or even financials show signs for concern. Therefore, a dashboard is necessary to display timely data of all relevant drivers for the business in a regular manner enabling the managers at different levels to control and improve if necessary.

Everything in a company happens in processes. Hence, process measures are the key indicators that help steering any organisation to success. Process measures help to establish a line-of-sight for the management.

Why Dashboards?

Whether your organisation has a Balanced Scorecard or not is secondary. The vital question is: Is there a set of business relevant measures or a dashboard, which management can use to control the business? Does management have a clear line-of-sight?

We often say, “What gets measured gets done.” This is not entirely true. Look around in your organisation and see how much data your staff collects. How much of it do you analyse and how much do you really use to derive actions? And, even if there are actions, how many of the interventions are really appropriate, i.e. statistically reinforced?

Dashboards serve purposes such as

  • Raising awareness for some key indicators among managers and employees. This alone leads to some initial improvements – due to the Hawthorne Effect,
  • Building a cause-and-effect mind-set, especially in the process of constructing the driver tree. This driver tree shows leading indicators that drive lagging indicators and serves to give a clear line-of-sight to the process owners. They will be able to see – and often quantify – the impact of their performance on customers and financials,
  • Creating appreciation for simple statistical principles like control charts. They are used to identify the appropriate action in case the dashboard shows signals.

How to Develop Dashboards?

Building dashboards is not a one-off exercise but a recurring task that mirrors changes in the organisation as well as learnings out of the dashboard itself. It usually takes the following steps:

Preparing the Dashboard

  1. Collecting existing indicators that make the initial driver tree. Some organisations are data rich, some are not. Building an inventory of the existing data is necessary – and often full of surprises. Not many businesses use this data in a driver tree with established cause-and-effect relationship. More often than not, the selection of KPIs is based on gut feel fed by a good portion of business knowledge. Almost always, it is necessary to amend the set of indicators after inventorying and evaluating them.
  2. Designing the dashboard for different levels is a rather creative activity. It involves decisions about which indicators to bring to whose awareness, how to show these indicators and how to set thresholds. Rule of thumb: not more than 10 to 12 indicators in one dashboard.
  3. Setting up the data collection system is a vital task. The quality of the data in the system determines the quality of information obtained and decisions made. Therefore, the data collection system should ensure that the right amount of relevant and representative data is available. Evaluating repeatability and reproducibility of the data collection system might be necessary.

Using the Dashboard

  1. Making the dashboard operational is about change and needs proper change management. It usually takes time, training, motivation and a great deal of role modelling by the leadership team to establish dashboards and the right mentality in using them. Start with the obvious indicators that are neither doubtful nor difficult.
  2. Revising the metrics is an ongoing task that should be part of the annual or bi-annual planning process. It needs time and some trial-and-error to establish effective dashboards showing numbers that really correlate with customer satisfaction and business success.


Building dashboards is a project itself. Their ongoing review and adjustment is as important as changing strategy or processes. Reading business indicators is a management task that requires preparation, focus and the willingness to embrace cultural change. Using dashboards combined with effective data analytics, process management and appropriate process improvement interventions are powerful in steering the business and in ensuring the organisation’s continuous learning and renewal. An effective dashboard with appropriate indicators gives the management a clear line-of-sight to the business objectives.

The project at MyBank did not take too much time. It revealed some obvious drawbacks in our processes. Firstly, our new conditions, i.e. better interest rates have not been communicated to all dealers. Hence, they used other banks for financing sales. The root cause was found to be a mismatch of our car dealer database with the marketing database. Marketing was working with “old” data. Secondly, our sales reps tended to call car dealers whom they are comfortable with.

This means they mostly called car dealers who were active anyway. For both process problems, corrective actions were introduced and monitored. As a result, Gerald’s dashboard has been amended to show the car dealers who have not been contacted for a certain period. This was a leading indicator that was very helpful in keeping current with the status of our communication with our car dealers – long before the relationship could turn sour.


Uwe H Kaufmann: Managing with Dashboards. Rath & Strong’s Six Sigma Leadership Handbook, John Wiley & Sons, 2003

Lean Six Sigma, Service

Six Sigma In The Bloodstream

One day I was asked why I left the stable, “money-printing” ISO 9000 business to join the riskier Six Sigma environment. My explanation went something like this: “Well, I think it makes more sense to implement a real business improvement and management system than to hang a nice certificate in the CEO’s office.”

But is this statement really true? Does starting a Six Sigma initiative automatically mean you’ll have an effective Quality management system? Definitely not. The downside of this methodology is that there are currently no “standards”, nor an “official” certifying institution. There is no external body that checks whether everyone walks the talk.

Six Sigma is more than starting a few projects, training some Belts and educating some business leaders about what it all means. The Six Sigma criteria depend on the business implementing this approach.

The Criteria

Generally, Six Sigma criteria are not comparable to the ISO 9000 but to the Malcolm Baldrige National Quality Award criteria or the European Quality Award criteria. These Quality management system descriptions exceed the historical thinking of “Quality Management Systems” enormously. Companies that have won either the European or the Malcolm Baldrige National Quality Award have learned that successful Quality management encompasses business management tools including leadership, strategic planning, customer and market focus, information and analysis, human resource focus, process management and results orientation.

Six Sigma aims to pursue the same target: “Completely Satisfying Customer Needs Profitably!” (Jack Welch). Therefore the criteria of a successful Six Sigma system are similar to the Baldrige criteria. One major difference seems to be that Baldridge shows just the shell of targets within those criteria whereas Six Sigma also describes a proven box of powerful tools and a rigid way to apply them.

The trick is how to plant this concept into an organisation. Here are some steps that most companies pursuing Six Sigma must go through:

Phase 1: Enthusiasm & Awareness


Firstly, the Leadership team of the organisation decides to go for Six Sigma. They dream of increasing its net income with huge savings, continuing to portray the image of an outstanding company and increasing customer satisfaction and loyalty, with doubts of whether these concepts will actually work. Normally the implementation of Six Sigma starts with Leadership awareness training and a couple of improvement projects. When they choose their first projects, the company either shows its Six Sigma competence by selecting business related projects within the leadership team or demonstrates the old-fashioned Quality way by delegating the task to their Black Belts or a “Quality team”.

This phase also includes the first Black Belt/Green Belt trainings. If the projects only focus on manufacturing areas, the company will limit themselves to the playground of traditional Quality improvement initiatives. Instead, it makes sense to think cross functionally and recognize improvement opportunities in all key business processes.

Phase 2: Seeking Results

Secondly, it is critical for the Leadership team to pass the first tollgate: Are they tracking results from their first projects or are they losing interest? Successful organisations install a steering committee – often called a “Quality Council” – to make decisions about projects, especially about tying their selection to business strategy and customer needs, implementing improvements, and reward and recognition.

If the leadership team shows that they don’t care, then Black Belts will not be able to produce results. And if the Black Belts do not produce results, then the leadership team will lose interest. It becomes a vicious cycle. The trigger must come from top management.

Results also need to be communicated to the entire company. It is critical to sell Six Sigma internally and convince the sceptics. Otherwise, the company will not be ready for the next phase.

Phase 3: Implementing Measures

Thirdly, results from the first projects usually include a few measures that track the results and ensure that the improvement lasts. Successful companies do add these measures to their internal dashboard and customer loyalty tracking system. Some even share those results with their customers, which builds trust.

Customer satisfaction measures are key for project selection. Unfortunately, they are not always available or used. Scorecards (comparable with Balanced Scorecards) should be implemented to tie Six Sigma implementation to the reward & recognition system and the bonus system to drive business results in terms of process improvement, customer satisfaction, employee satisfaction and net income. This kind of scorecard contains deployment and result measures.

Phase 4: Implementing Six Sigma As BAU

Finally, to build Six Sigma into the “business as usual”, all departments should be involved. Six Sigma includes a powerful tool set. This can help to improve all key business processes – including administrative processes – throughout the organisation. Additionally, there are a few key departments who need to support the Six Sigma initiative. Finance should track the costs and the benefits. Marketing/sales should gather the voice of the customer and track customer satisfaction levels. IT should support certain projects with their technical competence. And, HR must support Black Belt and Green Belt selection and development. They should include it into reward and recognition, and track and analyse employee satisfaction.

By this phase, project selection is no longer driven by the Quality leader or business leader. Individual process owners use Six Sigma to achieve their own business goals. Therefore, they dedicate resources to the effort and gain the results.

Six Sigma In The Bloodstream

Consequentially, you will know when Six Sigma is in the bloodstream of your organisation, when it will no longer be necessary to talk incessantly about it. Then, it will be part of the culture. This is probably one of the major differences between earlier improvement efforts such as TQ and Six Sigma. There will be no need to get startled by the call of the ISO 9000 auditor asking for the date of the re-certification. Six Sigma is a different mindset. There will rather be a kind of a regular internal evaluation by the leadership team assessing the status of their own management system – comparable with EFQ assessment.

Six Sigma means

  • Incorporating customer requirements into business processes,
  • Integrating business management skills into each element of the organisation effectively,
  • Analysing causes of process and output variation with statistical and non-statistical tools systematically,
  • Instilling people with the ability to get involved, and initiate, their own improvement projects cross-functional and company-wide,
  • Tracking performance honestly over time.

Leadership’s role is critical, especially at the outset, because leaders communicate and reinforce the power Six Sigma has to achieve business objectives. Without buy-in from leadership, it simply will not work. It must be reinforced from high and adopted from each internal level and process area. When done well, Six Sigma has the ability to create a truly customer focused workforce – and organisation.

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Cases, Customers, Manufacturing, Service, Strategy

What You Measure is What You Get

Developing a compelling vision and mission statement as well as a sound strategy is vital for any organisation. Equally important is the translation of the strategy into the day-to-day business. This step becomes even more critical for multi-national companies with their need for regional adaptation and alignment with corporate at the same time. So, how do we make sure our mid- and long-term plans – developed in the head quarter – make sense to business leaders and employees in other regions?

Cases, Lean Six Sigma, Manufacturing, Operations, Service

Measure The Success of Your Journey – A Lean Six Sigma Meter

Some well-known companies have been “doing Six Sigma” for years. They keep doing improvement projects in all kinds of business and support processes, rolling it out in Sales and R&D. They are extending the application of Six Sigma to the entire value chain – suppliers and customers – in their drive for sustained performance improvement. They are successful in building the Six Sigma principles into their daily business life and using this powerful approach as a vehicle to drive cultural change.

Other companies pilot improvement initiatives like Six Sigma by running a couple of improvement projects, then recognise that the journey toward improved business results will be a long and difficult one that requires a turn-around in the mindset of managers. A post-mortem analysis of a failed Six Sigma effort usually points to the lack of management commitment and lack of attention to the business and cultural investment needed to reach and sustain new levels of performance. What practical steps can be taken to maintain the focus and drive needed to reap the full benefits that Six Sigma offers?

Cases, Lean Six Sigma, Operations, Service

Six Sigma in Financial Services


OurBank is an American international bank with 50 branches in Germany and approximately 300 employees working either in the headquarter office or in one of the branches.
In 2003, the senior management of OurBank decided to adopt and implement Six Sigma as their business management tool across all business units in the Europe region.
According to the OurBank business strategy, the car loan business was identified as one of the business priorities in the next 12 months. The strategy was to significantly grow the car loan business market share within the region in two years time, by 100% in the first year, and by another 70% in the second year.

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