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Effective Leadership

Effective Leadership

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Effective leadership requires managers to be engaged with customers, employees and the processes that produce their products. Managers must listen to all three; voice of the customer, voice of the employee and voice of the process. To do this, managers need listening posts to gather, interpret, and integrate all the voices together to really understand the business and move it forward. Once the data is understood then they can take action to respond to what the “voice” is telling them.

Process metrics, customer satisfaction instruments and employee surveys or culture surveys as analytical measurement instruments are excellent management tools. When used, used properly and integrated together give clear direction to the leadership team regarding what actions should be taken. It is clear from the data that these measurements provide excellent direction for identifying improvements that, if address, will significantly drive the business forward. Continuous improvement when applied to improvement opportunities provide excellent financial gains and at the same time drive up both customer and employee satisfaction.

Continuous improvement approaches such as six sigma, lean enterprise, kaizen, process management and benchmarking clearly can not only improve process and their products but also customer satisfaction. Not so clear, in the past, is the fact that these approaches can also improve employee satisfaction. Driving up employee satisfaction further drives improvement, customer satisfaction and financial results for the organization.

Effective leadership requires managers to be engaged with customers, employees and the processes that produce their products. Managers must listen to all three; voice of the customer, voice of the employee and voice of the process. To do this, managers need listening posts to gather, interpret, and integrate all the voices together to really understand the business and move it forward. Once the data is understood then they can take action to respond to what the “voice” is telling them.

Process metrics, customer satisfaction instruments and employee surveys or culture surveys as analytical measurement instruments are excellent management tools. When used, used properly and integrated together give clear direction to the leadership team regarding what actions should be taken. It is clear from the data that these measurements provide excellent direction for identifying improvements that, if address, will significantly drive the business forward. Continuous improvement when applied to improvement opportunities provide excellent financial gains and at the same time drive up both customer and employee satisfaction.

Continuous improvement approaches such as six sigma, lean enterprise, kaizen, process management and benchmarking clearly can not only improve process and their products but also customer satisfaction. Not so clear, in the past, is the fact that these approaches can also improve employee satisfaction. Driving up employee satisfaction further drives improvement, customer satisfaction and financial results for the organization.

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Published by: spitraberg on Jan 13, 2009
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06/19/2010

“Effective Leadership”

Charles Aubrey
Vice President Lean Six Sigma
Anderson Packaging, Inc. an AmerisourceBergen Company

Anderson Packaging, Customer Base

1

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Corporate Culture An organizational way of life that creates employee attitudes, beliefs, behaviors and actions through the accepted, routinely demonstrated management norms, practices, traditions, and symbols that are institutionalized through continuous communication, reward and recognition.
Lean Six Sigma
2

Hypothesis
•Employee satisfaction (culture) affects organizational performance •Improvement in employee satisfaction drives a Lean Six Sigma culture and accelerates organizational performance •Lean Six Sigma can be utilized to improve employee satisfaction (culture)

Lean Six Sigma

3

٢

Human Resources Index (HRI) Fortune 1000 Industrials
Productivity Improvement
12%

Increased Return on Equity

200%
10%

150% 100% 50% 0%

Highest Employee Satisfaction Lowest Employee Satisfaction

8% 6% 4% 2% 0% Gre ater ROE Higher Employee Satisfaction

Greater Average Annual Increase in Shareholder’s Equity For Highest Employee Satisfaction - $14.2MM Lean Six Sigma
4

Best Employers Benefit
“… researchers at Vanderbilt University found that good employers are more profitable and have better Share-price performance than the broader market and their industry peers. The researchers looked at the top 100 employers in the U.S., as ranked by Hewitt Associates in 1993 and 1998 surveys.”

© Bruce Gilley, “People and Profit”, September 13, 2001

Lean Six Sigma

5

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Culture and Performance (Margin/Stock Price)

Top 100 Best Employers Outperform Others
7 6

250%

+53.3% Share Price Change (%)
200%

+20% +10.9%

150%

Profit Margin (%)

5 4 3 2 1 0 1996 1998

100%

50%

0%
1990-1996

Lean Six Sigma

Top 100

Others
6

Sears 1990’s Turnaround
For Sears 70% of its workforce was part-time status and turnover among its part-time workforce had become alarmingly high. Sears began measuring employee attitudes and satisfaction via a 70 question employee survey. The results of this survey were correlarted to revenue and profit trends.

© 2007, Chris Young, Founder of The Rainmaker Group, Inc.

Lean Six Sigma

7

٤

Sears 1990’s Turnaround
How much are happier employees, and more satisfied customers, worth?
Sears Turnaround Case Study
The Effects of Satisfaction on Reveues (mid90's)

84 82 Customer Satisfaction Index 63

Revenue ($Billion)

80 58 78 76

$13.8B 74
53 72 70 48 65 70 75 80 85 90 68

Employee Satisfaction Index

Lean Six Sigma

8

IBM, Rochester

© 1999 Macpherson Publishing

Lean Six Sigma

9

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IBM, Rochester
Primary Relationships Relative to Market Share
Primary Relationships Relative to Customer Satisf action

0.9 0.4 -0.1 -0.6 -1.1 Key Measure

0.9

Correlation

Correlation

0.4 <0.7 -0.1 -0.6 Customer Satisf action Employee Satisfaction Productivity COQ

Market Share

Productivity

Employee Customer Satisfaction Satisfaction

COQ

-1.1 Key Measure

Lean Six Sigma

10

Workforce Management Study
Stock Price Increases in Peer Companies
19.4%
20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% High Morale in 11 Companies Medium and Low Morale in 13 Companies

8.0%

Schoeff – Workforce management, 2006

Lean Six Sigma

11

٦

“Culture Surveys are a powerful way to lead.” “I wasn’t convinced to proceed with Six Sigma until I got survey feedback from employees who wanted change.”
Jack Welch 29 Jan, 2008

Lean Six Sigma

12

Steering Committee LSS Responsibilities
• Projects • Select and prioritize • Aligned to business strategy • Limit scope and communicate objective • Sponsor, participate in Leader selection • Program • Establish policy, ensure project/participant success • Advise/Direct Deployment Champion • Training • Assist Training in selecting “Belt” training candidates • Commit resources, internal and external Lean Six Sigma
13

٧

Desired culture can be articulated in • Our Place in the Universe, • Vision, • Mission and • Values Once articulated, culture can be measured by means of a Culture Survey to assess strengths and areas for improvement.
Lean Six Sigma
14

Steering Committee Culture Responsibility
• Update and commit to Mission, Vision, Values and “Our Place in the Universe” • Determine attributes desired in culture and develop a survey instrument • Conduct Survey, identify and address areas for improvement • Communicate Survey results and areas for improvement to all employees • Take action to find root causes, develop, implement and measure solution(s) effectiveness

Lean Six Sigma

15

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Anderson Packaging, Inc., OPITU
(Our Place in the Universe)

Our place in this universe is to provide pharmaceutical packaging excellence & innovation to the world’s pharmaceutical manufacturers so that they may effectively bring life changing and life saving medicines to patients.

Lean Six Sigma

16

Anderson Packaging, Inc., Vision Anderson Packaging will be the recognized leader in pharmaceutical packaging through industry leading performance in quality, compliance, operational excellence and customer satisfaction.

Lean Six Sigma

17

٩

Anderson Packaging, Inc., Mission To achieve superior returns and increasing value for all Anderson Packaging stakeholders by providing a competitive advantage to our customers through delivering high-quality continuously improving pharmaceutical packaging solutions in innovative and cost-effective ways.
Lean Six Sigma

18

Anderson Packaging, Inc., Values Manage with Information and Metrics Empower Employees Teamwork Respect & Ethical Behavior Improve and Innovate Coach, Mentor & Make a Difference Surpass Customer Expectations

Lean Six Sigma

19

١٠

Anderson Packaging, Inc., Culture Survey
• Developed 87 questions that represent the Values (33 or 38% in the vendor database for comparison) • All 370 salaried employees from the newest hire to the President were invited to participate • 240 employees participated in the Survey (65%) • Provided to all participants with computers electronically (80%), and in hardcopy form to those without computers (20%). • Allowed two weeks to complete the Survey

20

Anderson Packaging, Inc., The Survey
Manage with Information & Metrics:
• Employees are expected to meet all deadlines on time • Efficiency is a top priority at Anderson Packaging, Inc. • This company makes decisions quickly enough

Empower Employees:
• Employees here are given the authority to make the decisions that they need to make • I have had the training [that] I need to do my work well • I feel free to offer comments and suggestions

Teamwork:
• I feel part of a team with a shared goal • There is a spirit of teamwork at Anderson Packaging Inc. • Management seeks employee input to help make decisions

Respect & Ethical Behavior:
• Work-life balance is supported

• All employees are treated with respect • The people at Anderson Packaging Inc. will not tolerate unethical behavior

Lean Six Sigma

21

١١

Anderson Packaging, Inc., The Survey
Improve and Innovate:
• I am encouraged to have new ideas • We are always looking for ways to reduce waste for our customers • Continuous improvement of our customer processes always is a priority

Coach, Mentor & Make a Difference:
• Management really listens to what employees have to say • The personal career growth of employees is important to this company • Management always demonstrates how important our customers and their products are here

Surpass Customer Expectations:
• Customer service is a top priority at Anderson Packaging Inc. • Decisions are made here with a bias towards the customer • I know how my work affects or touches the customer Response Scoring Disagree Disagree Strongly Somewhat Neutral Agree Somewhat Agree Strongly

1………..2………..3………4.............5

Lean Six Sigma

22

Lean Six Sigma

23

١٢

DMAIC Provides Organizational Direction

Define
Define the purpose And scope. Collect Background info. •Charter •SIPOC •VOC •Affinity Diagram •CTQ Defined •Oper. Definitions •Pareto •Communication Plan •Gantt Chart

Measure
Understand the Current process •Data Collection/ Sampling Plan •Run Time/Control Charts •Frequency Plots •Scatter Plots •Test for Normality •Transformations •Process Sigma •Flowcharts •Histograms

Analyze

Improve

Control
Maintain the Gain, standardize •Standardization •Training •Control Plans •Run/Control Charts •Process Audits •Communication Plans •Ownership transition •Multiply Solutions

Identify and confirm Pilot solutions, Root Causes w/Data evaluate resulting data •Hypothesis tests •Pugh Matrix •C&E Diagrams •FMEA •Run/Control Charts •New Paretos •Histograms •New Process Sigma •Stratified Frequency •Ideal Flowcharts Plots •Pilot Studies •Regression •Commitment Scale •DOE •Tree Diagrams •Validated Root •Gantt Charts Cause List •Planning Grids •Affinity Diagram

Lean Six Sigma

24

Anderson Packaging’s Employee Participation by Skill Set:

Black Belts Green Belts Certified Lean Mechanics Kaizen Team Members Yellow Belts Lean Supv. Certification

Very complex Improvement Projects Complex Improvement Projects Set-up/mechanical trouble-shooting, waste removal Identify and eliminate waste in processes Remove waste in daily work Shop Floor Lean coaching/mentoring – emphasis in real time

6
(160 hrs training + project)

178
(40 hrs training + project)

47
(24 hrs. training + skill demo)

117
(3 days training + event)

784
(3 hrs. training + skill demo)

28
(32 hrs. training + skill demo)

Lean Six Sigma

25

١٣

Areas of Strength
• “Individual learning is encouraged” • “I enjoy my job and the type of work I do” • “We meet our customer’s requirements as much as possible” • “This company strives for constant improvement” • “I feel part of a team with shared goals”

Lean Six Sigma

26

Areas for Improvement
• “There is excellent communication up and down in this company” • “Employees are rewarded for improving work processes” • “Personal career growth of employees is important”

Lean Six Sigma

27

١٤

Excellent Communication Solutions •
Formal, comprehensive Communication Plan • CEO regularly meets with leadership teams • CEO regularly meets with all employees • VPs, Directors and Managers regularly meet with all employees • Individual improvement solution program • Creation and regular publication of a company newsletter with a non-management focus

Lean Six Sigma

28

Reward for Improvement Solutions
• Individual improvement reward program
• Individual/team performance excellence reward program • Team performance improvement reward program competition • Regular major and minor rewards and recognition events • Performance appraisal for Belts and team members • CEO emphasis on management and professional performance goals that improve and “move the business”

Lean Six Sigma

29

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Personal Career Growth Solutions
• Implement company-wide succession planning • Utilize succession planning to identify developmental activities • Utilize career development goals as part of the performance appraisal process, and to establish commitment to the identified developmental activities • Provide selective mentoring for development

Lean Six Sigma

30

Anderson Packaging’s LSS Project Results
Planned 2008 $4.354MM

Actual 2006

Actual 2007 $2.873MM

Hard Savings Capacity/Cost Avoidance Customer Savings

$940K

$1.496MM

$468K

$682K

$337K

$521K

$789K

Total $2.773MM

$3.862MM

$5.825MM

Lean Six Sigma

31

١٦

Anderson Performance
Planned 2008 1,200 $183

Actual 2006

Actual 2007 1,174 $159

Staff Sales Profit

955 $129

$15

$19

$24

Lean Six Sigma

32

Summary
• Employee satisfaction (culture) drives organizational performance • Employee satisfaction (culture) can be measured and Lean Six Sigma can improve employee satisfaction • The culture makes a difference in driving the business forward

Lean Six Sigma

33

١٧

“Effective Leadership”

Charles Aubrey
Vice President Lean Six Sigma
Anderson Packaging, Inc. an AmerisourceBergen Company

Lean Six Sigma

34

١٨

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