With its origins deep in the shop floor of Motorola Inc., Six Sigma is not immune to the misconception it is a process improvement program only a manufacturing company could love.
Try telling that to Bank of America, which embraced the methodology in 2001 and credits it with $2 billion in savings since then, as well as staggering growth in net new checking accounts. While virtually no other financial institution has adopted Six Sigma to the extent that BofA has, its experience alone offers ample proof that the process is not just for industrial companies anymore.
Technically, Six Sigma is a statistical measurement that equates quality with only 3.4 defects per million operations. In practice, it is a rigorous procedure aimed at delighting customers by continually improving processes.
Six Sigma first emerged in the mid-1980s when engineers at Motorola decided traditional methods for measuring the quality of TV sets and other consumer goods it produced was not effective. It wanted to measure defects per million of operations, not just thousands.
It's not so simple in banking, where institutions often create their own metrics by which to measure service excellence. Bank of America, for example, deploys mystery shoppers in its banking centers to make sure employees are carrying out very specific behaviors they've been asked to perform. The mystery shoppers might analyze how employees greet customers in terms of how often they do it, whether they do it with spirit, and if they connect with customers-not exactly dimensions that can be measured with a yardstick. "It's often harder to measure some of the attributes of financial services," says BofA svp James Buchanan.
All that listening appears to have paid off. In February, CEO Kenneth Lewis told analysts the number of customers who described themselves as highly satisfied rose from 42.5 percent at the end of 2001 to 53.2 percent at the end of 2004.
