SunTrust Banks Inc. says it has proven that you need not follow every tenet of the Six Sigma quality improvement technique to get results.
General Electric Co., Motorola Inc., and other major companies use Six Sigma to drive responsibility for quality improvement upward. The most valuable senior-level employees are put in charge of boosting quality through full-time assignments that can last up to two years.
But in 1995, when SunTrust began laying the foundation for using Six Sigma in its checking and deposit-processing operations, it knew it wanted to put the spotlight on middle managers.
The company figured that to get higher quality at the lowest possible cost it would have to "elevate the skills of front-line managers to empower them to make changes and really run the business," said Susan Peryam, first vice president of quality management.
The bet on middle management was a good one, Ms. Peryam said. "It's amazing what happens when you unleash the power of the front line and engage the employees in solving day-to-day issues in their work environment."
About the only drawback SunTrust has uncovered in its move to Six Sigma is that it no longer uses the same terminology as other financial institutions, Ms. Peryam said. This creates problems for corporate customers seeking to compare the performance of potential service providers. (SunTrust actually has to produce two sets of data: one that shows its processing performance in terms of the standard banking metric of errors per ten thousand and another that describes it in the Six Sigma measure of errors per million.)
And SunTrust is far enough along the Six Sigma track to have discovered one seemingly counterintuitive aspect, Ms. Peryam said. "There may be some point where for competitive reasons, client needs, or cost-benefit it's not worth going after the ultimate Six Sigma."
In the beginning, however, Six Sigma was an easy sell to middle managers, once they saw how it could ease their day-to-day burdens, she said. With their participation, the "real power" of Six Sigma kicked in, she said.
Ms. Peryam said that a particularly valuable component of Six Sigma has been the procedures it offers to help employees change the way they approach their jobs.
In two years starting in 1995 SunTrust trained about 200 managers and supervisors to use a performance management tool. They sat through five days of classroom training and 16 to 24 hours of one-to-one coaching over four months.
The goal was to give them more insight into the various facets of their processing businesses, including how to measure success and how to keep customers foremost on their minds. The company is now training about 400 people with this method, Ms. Peryam said.
Once the front line was equipped with this knowledge, SunTrust began a second phase of training - again lasting about two years - on ways to implement change and improve processes. This phase included setting five-year "stretch goals," which Ms. Peryam described as goals that "seem unbelievable at the time but prove to be attainable."
After this segment of training began, SunTrust found that the role of the middle manager began to change. Instead of being problem-solvers, front-line supervisors evolved into coaches, with a heavy focus on rewarding employees.
SunTrust had made sure to build into its program tools that middle managers could use to recognize employees. In effect, by changing the nature of the front-line managers' job, SunTrust "pushed problem-solving down" to the employee level, Ms. Peryam said.
"We wanted to make quality a way of life," she said.
With the reorientation complete, SunTrust slowly began moving toward Six Sigma. It created an index to track its item-processing performance by 14 measures, such as sending out statements on time, responding to research requests in a timely manner, and encoding checks accurately.
Some measures began hitting Six Sigma performance levels in the fourth year, others still are closing in on the five-year goal. Across all 14 deposit processes, SunTrust currently is recording fewer than 20 errors per million, Ms. Peryam said. Before the Six Sigma initiative, some processes had error rates in the thousands, and some in the hundreds.
By now, SunTrust has completed so many Six Sigma-related improvement projects - about 500 - that it has decided to no longer track them at the corporate level, though they will continue to be recognized by individual departments.
SunTrust is getting savings and generating revenue through Six Sigma, Ms. Peryam said, though she declined to provide specifics. She added that SunTrust has kept its investment in Six Sigma to a minimum by not spending a lot of money on consulting or hiring many experts in the technique.
SunTrust also has a centralized quality team whose role is to coach departments on how to use quality tools as well as to track their progress. Each of SunTrust's item-processing centers has a quality administrator who reports to the central quality team.
Senior managers get involved in Six Sigma through their support of the program as well as an annual banquet held each March to recognize front-line managers who have completed outstanding quality improvement projects. The managers behind 15 of this year's more than 100 projects were recognized that way.
