When it comes to Six Sigma - the regimented, statistics-based system aimed at achieving success 99.99966% of the time - the spectrum of opinion is wide and, evidently, increasingly nuanced.
Some financial giants, including J.P. Morgan Chase & Co. and Bank of America Corp., are trying to infuse its precepts companywide. Some, such as SunTrust Banks Inc., have committed to it more modestly; SunTrust is targeting checking and deposit-processing operations.
Then there are the detractors, who say the technique, born in manufacturing, is merely cosmetic when applied to banking operations, and that the karate-style system that awards belts of different colors to executives, is laughable.
Now comes the head of corporate operations at Countrywide Financial Corp., the home loan giant, saying that Six Sigma as originally conceived is not really suited to financial services companies, but that with "heavy, heavy modifications" it can work.
Banks "will all find there's a limit" to the usefulness of Six Sigma, said John Ardy, a managing director at Countrywide. He joined the company in 2000 after heading the Six Sigma effort at Key Bank, the KeyCorp subsidiary.
At Countrywide, he and his group have developed what he describes as a fundamentally different approach toward operational efficiency and process improvement. He said the adjustments represent "a reaction to our lack of success in Six Sigma" at Key.
The chief differences seem to be that Countrywide's program, introduced in January 2002, is mostly voluntary - managers can use it if they want to and are rewarded if they use it well - and is not pegged to statistical goals.
Yet in some respects, particularly nomenclature and the reward program for managers, it looks and feels a lot like Six Sigma.
Like Six Sigma, Countrywide's program prescribes a six-step approach to project management. The program is called Faster ("flow, analyze, solve, target, execute, and review"); Six Sigma's central rule is DMAIIC ("define, measure, analyze, improve, implement, and control.")
Also like Six Sigma, Faster offers awards for training and execution - but medals instead of colored belts.
Mr. Ardy said Faster program, which includes software to guide project management, has produced $125.6 million in financial results for the company.
For managers at Countrywide "there is no mandate" to use the program, Mr. Ardy said. "We didn't believe in a forced approach. Yet we have thousands of employees volunteering" to use it. The company has promoted Faster internally by promulgating the tag line "It's your Countrywide. Make it better."
That said, some Countrywide managers have been so impressed by the results of the Faster projects that they have required all their employees to take the training.
In the second quarter of 2002, Richard Jones, the company's chief information officer, created a Faster-like method for software development, for use by his information technology department. The program, known as Faster SE (for "software engineering"), aims to drive efficiency in creation, implementation, and testing.
By adopting the same Faster "brand" used by the business units, Mr. Jones said, he and his team are helping to bridge the communication gap that normally divides the information technology group from the business groups.
"The big benefit is that business is talking the same language as IT," he said. "They have a lot more trust that we're not just throwing out some wild numbers. There's science involved here. The businesses understand we're not wasting money."
More than 700 Countrywide employees have undergone Faster training, which involves three days of seminars spread over two months. About 2,300 employees have used the Faster project management software; 150 to 200 concurrent users log on every day, Mr. Ardy said.
Employees who complete the three-day training receive a silver medal; those who use the online tool get a bronze. Gold medals are awarded to employees who can prove to a 30-year CPA auditor on Countrywide's staff that their project has resulted in a financial contribution to the business for a full quarter.
As of last month149 gold medals had been awarded to 122 employees. Mr. Ardy estimated that the company saved about $1 million per gold project.
"Everyone knows about Faster and is anxious to get involved," he said. "We don't have the buy-in issues that traditional Six Sigma people have."
Another difference, Mr. Ardy said, is that Countrywide does not emphasize statistics. Rather than try to achieve a "statistical nirvana," he said, it focuses on giving employees the tools and opportunities they need to make their mark.
Faster was developed by Countrywide's performance management group, which was formed in January 2001 to spearhead im-provement projects around the company. At first the group had five or six people; now it has 30, including four full-time trainers.
Despite Countrywide's claims for its system, some analysts said they are not particularly impressed. They said they had seen process-improvement projects come and go over the years at various institutions and see little to recommend Countrywide's version.
Paul Miller, a senior analyst at Friedman, Billings & Ramsey Co. Inc., said the results of such programs are very hard for analysts to measure and verify. Charlotte A. Chamberlain, a financial services analyst for Jefferies & Co. Inc., said Countrywide's efficiency ratio is much worse than those of other mortgage lenders. It is usually around 70%, she said, but last quarter it was 66% - versus 47% at Washington Mutual Inc., for example.
Mr. Ardy countered that such programs take root over time. Faster has "wildly exceeded" Countrywide's expectations in terms of employee participation and cost savings, he said. "There will be other Faster programs out there," he predicted.
