Post on 02-Jul-2015
Succeeding with Six Sigma and Lean in a Transactional and Services Environment
James Illing, VP, MBBBank of AmericaCustomer Service and Support
WCBF Lean Six Sigma Conference Dallas, TX Dec 2-3, 2004
Page 2
Bank of America Vision
Page 3
Jacksonville
Las Vegas
Tempe
Rio Rancho
MorgantownRichmond
Tampa
Fresno
Concord
Irving/ Dallas
Tri-Cities
Seattle
Charlotte
Dover
Norfolk
Brea
Spokane
NW RegionSeattle: NWC, PRC, NDSSpokane: CCMTri-Cities: NWC
Atlantic RegionDover: “Morgantown: MC
Norfolk: “Richmond: MC
California Region
Brea: CM, CAC, DFS, , RSS, (SG)Concord: CAC , EBS, , Fresno: CAC, , (SG)Glendale: CAC, PRC, , RSS, NDS, SB , (SG)Pasadena: “, PRC Central Region
Las Vegas: MC
Phoenix: “Rio Rancho: MCTempe: PRC
EBSConcord: EBSIrving: EBSJacksonville: EBS
Florida RegionTampa: MC, RSS, SB (SG)Jacksonville: CM, DFS, EBS, PRC, (SG)
Charlotte: SB
LEGEND
CAC California ConsumerCM CommercialCCM Commercial Card/Merchant Svc
“ Consumer CardDFS Dealer Financial ServicesEBS Electronic Banking ServicesMC Model ConsumerNDS National Direct SalesNWC Northwest Consumer
PlusPRC Premier Relationship Center
PrimeRSS Resolution Services & SupportSB Small Business(SG) Specialty Gate/TDD
LEGEND
CAC California ConsumerCM CommercialCCM Commercial Card/Merchant Svc
“ Consumer CardDFS Dealer Financial ServicesEBS Electronic Banking ServicesMC Model ConsumerNDS National Direct SalesNWC Northwest Consumer
PlusPRC Premier Relationship Center
PrimeRSS Resolution Services & SupportSB Small Business(SG) Specialty Gate/TDD
Glendale
Phoenix
Houston
San Francisco
San Antonio
Wichita
Kansas CitySt. Louis
Atlanta
Baltimore
LincolnBethlehem
ScrantonManhattan
UticaDorchester
Former FleetCard Sites
Colorado SpringsHorsham
Newark
Former FleetTelephone Banking Sites
Colorado Springs
Utica
Scranton
Dorchester
Lincoln
Manhattan
Customer Service and Support
Resolution Services
Both
Customer Service and Support
Resolution Services
Both
NewarkHorsham
Bethlehem
Pasadena
Los Angeles
Customer Service and Support (CS&S)
Note: Map shows locations of CS&S Contact Centers only
Page 4
2005 PrioritiesTo Delight our Customers we must:1.1 Deliver the basics consistently, through
improved tools and processes 1.2 Drive an integrated and personalized cross-
channel customer experience1.3 Drive service excellence through error free execution 1.4 Gather, analyze and disseminate customer information for business partners to drive
product and process improvements1.5 Differentiate service for targeted segments
To Delight our Associates we must:2.1 Build, invest in and retain a high performing,
diverse associate team2.4 Operationalize the Bank of America Spirit and
create an inclusive environment 2.5 Define the contact center environment of the
future
To Delight our Shareholders we must:3.1 Deliver customer solutions to targeted
segments3.2 Optimize our cost to serve3.3 Leverage core competencies to expand value
and business scope through increased revenue and economies of scale
Annualized Statistics:Customer Calls Handled by VRU in 2003 ……554,900,000
Customer Calls Handled by Associates in 2003
..…..122,700,000
E-mails Received in 2003 …….3,674,000
E-mails Processed in 2003……3,673,000
2003 Q&P Projects Benefit.…..$43million
CS&S Facts and Priorities
Page 5
• 4 times more likely to recommend Bank of America
• 3 times more likely to expand his or her relationship with Bank of America
• 20% less likely to move all of his or her business from Bank of America
A Delighted Customer is:
27%
Delighted9-10
Satisfied6-8
LeastSatisfied
1-5
Likely to recommend Bank of America
Likely to open a new account
Likely to move an account elsewhere
4X difference
3X difference
20% reduction
27%
Delighted9-10
Satisfied6-8
LeastSatisfied
1-5
Likely to recommend Bank of America
Likely to open a new account
Likely to move an account elsewhere
4X difference
3X difference
20% reduction
0%
10%
20%
30%
40%
50%
1 2 3 4 5 6 7 8 9 10
Extremely SatisfiedNot at all Satisfied
Delighted(9-10)
“Top 2 Box”
0%
10%
20%
30%
40%
50%
1 2 3 4 5 6 7 8 9 10
Extremely SatisfiedNot at all Satisfied
Delighted(9-10)
“Top 2 Box”
The only question that matters: “Considering all the business you do with Bank of America, what is your overall satisfaction with Bank of America?”
Page 6
Six Sigma is Top Down at Bank of America
"Six Sigma will enable Bank of America to make the breakthrough improvements in customer satisfaction and shareholder value that we must achieve to reach our goal of becoming the world's most admired company. That's why I'm committed to using it as a performance management discipline throughout our company."
Ken Lewis, CEO
Page 7
Six Sigma, Lean, DFSS
Page 8
Strategy Deployment with Hoshin KanriStrategy Deployment with Hoshin Kanri
Page 1The “What”
Page 3“Balanced Scorecard”
3. Set 3-5 Year Breakthrough Strategies
1. Establish Vision / Mission/ Overarching Goals
6. Establish Goals to Benchmark
2. Scan External Environment and Internal Performance
(SWOT)
4. Identify Performance Metrics
Bank of America Performance Plan Measures
2002 Milestones 2001 2002
METRIC Performance Goal Q1 Q2 Q3 Q4 Benchmark Source
Customer
Key Processes Sigma level - Deposits - Payments - Problem Resolution
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
% Very Satisfied - Consumer/Comm/AMG - GCIB Issuer - GCIB Investor (rank)
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
RNI Per Relationship ($) - Consumer/Comm/AMG - GCIB (rev/strategic issuer
client)
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
# Products Per Relationship - Consumer/Comm/AMG
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
% Market Penet (target mkts) - Consumer - Premier - Small Business - Commercial - Private - GCIB Issuer - GCIB Investor
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
% Lead Bank Penet (target mkts) Commercial
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
# Cust/Client Relationships - Consumer/Comm/AMG
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
Concentration Limits (#) TBD TBD TBD TBD TBD TBD TBD TBD
Associate % Very Satisfied TBD TBD TBD TBD TBD TBD TBD TBD
% positive responses for: - Performance mgmt. - Training - Diversity
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
% Turnover – Total TBD TBD TBD TBD TBD TBD TBD TBD
# Training Hours Completed (per associate per year)
TBD TBD TBD TBD TBD TBD TBD TBD
% Minority / Women in Band 1-3 positions
TBD TBD TBD TBD TBD TBD TBD TBD
Shareholder Total Shareholder Return (Rank in Peer Group)
TBD TBD TBD TBD TBD TBD TBD TBD
Change in SVA ($) TBD TBD TBD TBD TBD TBD TBD TBD
EPS ($ / % growth) TBD TBD TBD TBD TBD TBD TBD TBD
Revenue Growth (%) TBD TBD TBD TBD TBD TBD TBD TBD
Trading Rev. Stability (%) TBD TBD TBD TBD TBD TBD TBD TBD NII Sensitivity ($) - Rising - Declining
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
Credit Loss Stability (bp/qtr) TBD TBD TBD TBD TBD TBD TBD TBD
Operational Risk Stability TBD TBD TBD TBD TBD TBD TBD TBD Capital Adequacy (%) (Tier 1)
TBD TBD TBD TBD TBD TBD TBD TBD
Productivity ($) - Efficiency Ratio
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
Bank of America Performance Plan Measures
2002 Milestones 2001 2002
METRIC Performance Goal Q1 Q2 Q3 Q4 Benchmark Source
Customer
Key Processes Sigma level - Deposits - Payments - Problem Resolution
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
% Very Satisfied - Consumer/Comm/AMG - GCIB Issuer - GCIB Investor (rank)
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
RNI Per Relationship ($) - Consumer/Comm/AMG - GCIB (rev/strategic issuer
client)
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
# Products Per Relationship - Consumer/Comm/AMG
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
% Market Penet (target mkts) - Consumer - Premier - Small Business - Commercial - Private - GCIB Issuer - GCIB Investor
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
TBD TBD TBD TBD TBD TBD TBD
% Lead Bank Penet (target mkts) Commercial
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
# Cust/Client Relationships - Consumer/Comm/AMG
TBD
TBD
TBD
TBD
TBD
TBD
TBD
TBD
Concentration Limits (#) TBD TBD TBD TBD TBD TBD TBD TBD
Associate % Very Satisfied TBD TBD TBD TBD TBD TBD TBD TBD
% positive responses for: - Performance mgmt. - Training - Diversity
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
TBD TBD TBD
% Turnover – Total TBD TBD TBD TBD TBD TBD TBD TBD
# Training Hours Completed (per associate per year)
TBD TBD TBD TBD TBD TBD TBD TBD
% Minority / Women in Band 1-3 positions
TBD TBD TBD TBD TBD TBD TBD TBD
Shareholder Total Shareholder Return (Rank in Peer Group)
TBD TBD TBD TBD TBD TBD TBD TBD
Change in SVA ($) TBD TBD TBD TBD TBD TBD TBD TBD
EPS ($ / % growth) TBD TBD TBD TBD TBD TBD TBD TBD
Revenue Growth (%) TBD TBD TBD TBD TBD TBD TBD TBD
Trading Rev. Stability (%) TBD TBD TBD TBD TBD TBD TBD TBD NII Sensitivity ($) - Rising - Declining
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
Credit Loss Stability (bp/qtr) TBD TBD TBD TBD TBD TBD TBD TBD
Operational Risk Stability TBD TBD TBD TBD TBD TBD TBD TBD Capital Adequacy (%) (Tier 1)
TBD TBD TBD TBD TBD TBD TBD TBD
Productivity ($) - Efficiency Ratio
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
TBD TBD
1
Bank of America
Ken Lewis, Chairman and CEO
“Be Recognized As One of the World’s Most AdmiredCompanies”
Breakthrough Strategies
Provider of Choice92% Customer Satisfaction
Employer of Choice90% Associate Satisfaction
Investment of ChoiceFirst in Peer Group
Total Shareholder Return
1.1 Provide a world-class customer/client experiencethrough easy access and efficient, error-free service
C. Goslee / B. Desoer1.2 Attract and retain profitable customers/clients…and
continuously reward them for keeping and bringing moreof their business to us G. Taylor / R. DeMartini / B. Desoer
E. Brown1.1 Become the trusted advisor for financial solutions
R. DeMartini / E. Brown1.4 Develop and deliver innovative new products and
solutions which make financial services work in ways itnever has before B. Desoer / E. Brown
VISION
GOALS
ASSOCIATE
SHAREHOLDER
CUSTOMER
2.1 Attract and retain a world-class work forceS. Alphin
2.2 Define and align Associate roles, measures and rewardsto our strategy S. Alphin
2.3 Provide the support and tools Associates need to excelB. Desoer
2.4 Enable Associates to achieve professional growthbalanced with personal goals B. Desoer
2.5 Reflect in our work force the diversity of the communitiesand customers we serve S. Alphin
3.1 Double Shareholder Value Add (SVA) in the next 3 yearsJ. Hance
3.2 Consistently achieve double-digit year-over-year (EPS)growth J. Hance
3.3 Consistently achieve annual revenue growth targetsJ. Hance3.4 Substantially reduce volatility of market, credit and
operational lossesB. Vandiver
3.5 Dramatically reduce the complexity of our business andachieve double-digit productivity each year
C. Goslee / T. Arnoult1
Bank of America
Ken Lewis, Chairman and CEO
“Be Recognized As One of the World’s Most AdmiredCompanies”
Breakthrough Strategies
Provider of Choice92% Customer Satisfaction
Employer of Choice90% Associate Satisfaction
Investment of ChoiceFirst in Peer Group
Total Shareholder Return
1.1 Provide a world-class customer/client experiencethrough easy access and efficient, error-free service
C. Goslee / B. Desoer1.2 Attract and retain profitable customers/clients…and
continuously reward them for keeping and bringing moreof their business to us G. Taylor / R. DeMartini / B. Desoer
E. Brown1.1 Become the trusted advisor for financial solutions
R. DeMartini / E. Brown1.4 Develop and deliver innovative new products and
solutions which make financial services work in ways itnever has before B. Desoer / E. Brown
VISION
GOALS
ASSOCIATE
SHAREHOLDER
CUSTOMER
2.1 Attract and retain a world-class work forceS. Alphin
2.2 Define and align Associate roles, measures and rewardsto our strategy S. Alphin
2.3 Provide the support and tools Associates need to excelB. Desoer
2.4 Enable Associates to achieve professional growthbalanced with personal goals B. Desoer
2.5 Reflect in our work force the diversity of the communitiesand customers we serve S. Alphin
3.1 Double Shareholder Value Add (SVA) in the next 3 yearsJ. Hance
3.2 Consistently achieve double-digit year-over-year (EPS)growth J. Hance
3.3 Consistently achieve annual revenue growth targetsJ. Hance3.4 Substantially reduce volatility of market, credit and
operational lossesB. Vandiver
3.5 Dramatically reduce the complexity of our business andachieve double-digit productivity each year
C. Goslee / T. Arnoult1
Bank of America
Ken Lewis, Chairman and CEO
“Be Recognized As One of the World’s Most AdmiredCompanies”
Breakthrough Strategies
Provider of Choice92% Customer SatisfactionProvider of Choice
92% Customer Satisfaction
Employer of Choice90% Associate SatisfactionEmployer of Choice90% Associate Satisfaction
Investment of ChoiceFirst in Peer Group
Total Shareholder Return
Investment of ChoiceFirst in Peer Group
Total Shareholder Return
1.1 Provide a world-class customer/client experiencethrough easy access and efficient, error-free service
C. Goslee / B. Desoer1.2 Attract and retain profitable customers/clients…and
continuously reward them for keeping and bringing moreof their business to us G. Taylor / R. DeMartini / B. Desoer
E. Brown1.1 Become the trusted advisor for financial solutions
R. DeMartini / E. Brown1.4 Develop and deliver innovative new products and
solutions which make financial services work in ways itnever has before B. Desoer / E. Brown
VISION
GOALS
ASSOCIATE
SHAREHOLDER
CUSTOMER
2.1 Attract and retain a world-class work forceS. Alphin
2.2 Define and align Associate roles, measures and rewardsto our strategy S. Alphin
2.3 Provide the support and tools Associates need to excelB. Desoer
2.4 Enable Associates to achieve professional growthbalanced with personal goals B. Desoer
2.5 Reflect in our work force the diversity of the communitiesand customers we serve S. Alphin
3.1 Double Shareholder Value Add (SVA) in the next 3 yearsJ. Hance
3.2 Consistently achieve double-digit year-over-year (EPS)growth J. Hance
3.3 Consistently achieve annual revenue growth targetsJ. Hance3.4 Substantially reduce volatility of market, credit and
operational lossesB. Vandiver
3.5 Dramatically reduce the complexity of our business andachieve double-digit productivity each year
C. Goslee / T. Arnoult
5. Identify Baseline and Benchmark Performance
• Vision/Mission/Overarching Goals
• 3-5 Year Breakthrough Strategies
• 12 Month Tactical Plan• Key Performance Metrics
Page 2The “How”
8. Develop 12 Month Tactical Plan
2002 Performance Plan Metric1.1 Provide a world-class customer/client experience through easy access and efficient, error-free service
1.1.1 Drive Six Sigma & re-engineering across priority processes to address customer experience gaps and achieve breakthrough quality and productivity improvements1.1.2 Develop and deliver the appropriate enablers (people/process/technology) to make the customer
experience come alive in a sustainable and differentiated way1.1.3 Implement a world-class problem resolution process
1.2 Attract and retain profitable customers/clients…and continuously reward them for keeping andbringing more of their business to us1.2.1 Establish and implement a disciplined customer/client continuum (selection/acquisition/service) process matched to individual customer group strategies…Align customers/clients with the right level and proactively up-tier them consistent with their needs1.2.2 Focus resources on a narrower set of corporate issuer clients where we can build a leading market
position and significantly increase emphasis and penetration of institutional investor clients1.2.3 Create value propositions by customer segment while ensuring profit for the bank1.2.4 Establish a meaningful loyalty program that allows customers/clients to choose from a variety of rewards1.2.5 Create an automated product aggregation capability that enables customers to bundle solutions in a way that creates value for them1.2.6 Create a distribution system with sufficient scale to cover the franchise and meet customer/client needs
1.3 Become the trusted advisor for financial solutions 1.3.1 Design and implement an industry leading financial advice process, tool-set, and associate competencies by customer segment1.3.2 Launch the brand building activities required to be recognized as a world-class investment provider1.3.3 Design & implement the relationship management process across customer segments1.3.4 Respond to our customer/client needs as they evolve (eg: insurance & retirement services capabilities)1.3.5 Increase the size and margin of advisory, capital raising, and risk management activities, while
significantly reducing the corporate loans held on our balance sheet1.4 Develop and deliver innovative new products and solutions which make financial services work in
ways it never has before1.4.1 Develop and implement a breakthrough product development process1.4.2 Develop a strategy for non-proprietary offerings1.4.3 Preserve and expand the bank's position in the payments/funds transfer process
1.1 Key Processes Sigma level% Very Satisfied
1.2 Relationship Net Income ($RNI)# Products Per RelationshipMarket Penetration (%)# Customer/Client RelationshipsConcentration Limits (#)
1.3 Relationship Net Income ($RNI)Market Penetration (%)
1.4 Relationship Net Income ($RNI)Market Penetration (%)
2.1 Attract and retain a world-class work force2.1.1 Implement Associate satisfaction surveys and address the most important issues2.1.2 Adopt a world-class internal & external selection/recruitment/staffing process2.1.3 Create a 6 month assimilation plan for new Associates2.1.4 Develop a world-class recognition & compensation program
2.2 Define and align Associate roles, measures & rewards to our strategy2.2.1 Define roles and complete performance management plans for all Associates, aligned to the corporate strategy and to the supporting business unit performance plans2.2.2 Align performance measures & incentives to re-enforce desired Associate behaviors2.2.3 Require non-customer facing Associates to experience direct customer/client input on a quarterly basis2.2.4 Implement success profiles for all positions
2.3 Provide the support and tools Associates need to excel2.3.1 Ensure learning & development opportunities to maximize current Associate performance & future potential…Develop and implement an effective coaching program2.3.2 Provide training to improve Associate capabilities in critical skills (relationship building, client management, quality tools & processes, scorecard drivers--SVA)….web-enable priority technical tools2.3.3 Complete all improvements required to achieve a world-class talent planning process
2.4 Enable Associates to achieve professional growth balanced with personal goals2.4.1 Develop and deliver a process & strategy to support career development2.4.2 Ensure Associates are aware of all benefits offered to them2.4.3 Provide our Associates the best value in financial services2.4.4 Develop comprehensive mentoring/networking programs
2.5 Reflect the diversity of the communities and customers we serve in our work force2.5.1 Attract, retain and develop associates with diverse skills and experiences2.5.2 Determine and achieve diversity targets by band level
2.1 % Very Satisfied% Positive responses for:
- Performance Plans- Training- Diversity
% Turnover – Total
2.2 % Positive responses forPerformance Management
2.3 # Training Hours Completed
2.4 % Positive responses forPerformance Management
2.5 % Minority / Women in Band 1-3positions
3.1 Double Shareholder Value Add (SVA) in the next 3 years3.1.1 Implement Breakthrough (Hoshin) Strategic Planning company-wide…achieve results on 1.1-2.5 above3.1.2 Strengthen compensation linkages to SVA3.1.3 Re-allocate resources and capital to high SVA growth businesses3.1.4 Modify pricing & profitability tools to include SVA generated at the customer/client level
3.2 Consistently achieve double-digit Y-O-Y EPS growth3.2.1 Achieve results on 1.1-3.1 above3.2.2 Establish disciplined pricing/return hurdles at relationship level, inspect results & remedy as appropriate
3.3 Consistently achieve annual revenue growth targets
3.0 Total Shareholder Return (Rankin Peer Group)
3.1 Change in SVA ($)
3.2 EPS ($ / % growth)
3.3 Revenue Growth (%)
2002 Performance Plan Metric1.1 Provide a world-class customer/client experience through easy access and efficient, error-free service
1.1.1 Drive Six Sigma & re-engineering across priority processes to address customer experience gaps and achieve breakthrough quality and productivity improvements1.1.2 Develop and deliver the appropriate enablers (people/process/technology) to make the customer
experience come alive in a sustainable and differentiated way1.1.3 Implement a world-class problem resolution process
1.2 Attract and retain profitable customers/clients…and continuously reward them for keeping andbringing more of their business to us1.2.1 Establish and implement a disciplined customer/client continuum (selection/acquisition/service) process matched to individual customer group strategies…Align customers/clients with the right level and proactively up-tier them consistent with their needs1.2.2 Focus resources on a narrower set of corporate issuer clients where we can build a leading market
position and significantly increase emphasis and penetration of institutional investor clients1.2.3 Create value propositions by customer segment while ensuring profit for the bank1.2.4 Establish a meaningful loyalty program that allows customers/clients to choose from a variety of rewards1.2.5 Create an automated product aggregation capability that enables customers to bundle solutions in a way that creates value for them1.2.6 Create a distribution system with sufficient scale to cover the franchise and meet customer/client needs
1.3 Become the trusted advisor for financial solutions 1.3.1 Design and implement an industry leading financial advice process, tool-set, and associate competencies by customer segment1.3.2 Launch the brand building activities required to be recognized as a world-class investment provider1.3.3 Design & implement the relationship management process across customer segments1.3.4 Respond to our customer/client needs as they evolve (eg: insurance & retirement services capabilities)1.3.5 Increase the size and margin of advisory, capital raising, and risk management activities, while
significantly reducing the corporate loans held on our balance sheet1.4 Develop and deliver innovative new products and solutions which make financial services work in
ways it never has before1.4.1 Develop and implement a breakthrough product development process1.4.2 Develop a strategy for non-proprietary offerings1.4.3 Preserve and expand the bank's position in the payments/funds transfer process
1.1 Key Processes Sigma level% Very Satisfied
1.2 Relationship Net Income ($RNI)# Products Per RelationshipMarket Penetration (%)# Customer/Client RelationshipsConcentration Limits (#)
1.3 Relationship Net Income ($RNI)Market Penetration (%)
1.4 Relationship Net Income ($RNI)Market Penetration (%)
2.1 Attract and retain a world-class work force2.1.1 Implement Associate satisfaction surveys and address the most important issues2.1.2 Adopt a world-class internal & external selection/recruitment/staffing process2.1.3 Create a 6 month assimilation plan for new Associates2.1.4 Develop a world-class recognition & compensation program
2.2 Define and align Associate roles, measures & rewards to our strategy2.2.1 Define roles and complete performance management plans for all Associates, aligned to the corporate strategy and to the supporting business unit performance plans2.2.2 Align performance measures & incentives to re-enforce desired Associate behaviors2.2.3 Require non-customer facing Associates to experience direct customer/client input on a quarterly basis2.2.4 Implement success profiles for all positions
2.3 Provide the support and tools Associates need to excel2.3.1 Ensure learning & development opportunities to maximize current Associate performance & future potential…Develop and implement an effective coaching program2.3.2 Provide training to improve Associate capabilities in critical skills (relationship building, client management, quality tools & processes, scorecard drivers--SVA)….web-enable priority technical tools2.3.3 Complete all improvements required to achieve a world-class talent planning process
2.4 Enable Associates to achieve professional growth balanced with personal goals2.4.1 Develop and deliver a process & strategy to support career development2.4.2 Ensure Associates are aware of all benefits offered to them2.4.3 Provide our Associates the best value in financial services2.4.4 Develop comprehensive mentoring/networking programs
2.5 Reflect the diversity of the communities and customers we serve in our work force2.5.1 Attract, retain and develop associates with diverse skills and experiences2.5.2 Determine and achieve diversity targets by band level
2.1 % Very Satisfied% Positive responses for:
- Performance Plans- Training- Diversity
% Turnover – Total
2.2 % Positive responses forPerformance Management
2.3 # Training Hours Completed
2.4 % Positive responses forPerformance Management
2.5 % Minority / Women in Band 1-3positions
3.1 Double Shareholder Value Add (SVA) in the next 3 years3.1.1 Implement Breakthrough (Hoshin) Strategic Planning company-wide…achieve results on 1.1-2.5 above3.1.2 Strengthen compensation linkages to SVA3.1.3 Re-allocate resources and capital to high SVA growth businesses3.1.4 Modify pricing & profitability tools to include SVA generated at the customer/client level
3.2 Consistently achieve double-digit Y-O-Y EPS growth3.2.1 Achieve results on 1.1-3.1 above3.2.2 Establish disciplined pricing/return hurdles at relationship level, inspect results & remedy as appropriate
3.3 Consistently achieve annual revenue growth targets
3.0 Total Shareholder Return (Rankin Peer Group)
3.1 Change in SVA ($)
3.2 EPS ($ / % growth)
3.3 Revenue Growth (%)
7. Use MBF to Develop Gap Closure
Countermeasures
• Baseline & Benchmark Results• Goals to Benchmark• Results to Goals
Hoshin Plan: Three Page Top-down Guidance & Framework
to receipt and 20 days DSO contributing to a lost revenue opportto receipt and 20 days DSO contributing to a lost revenue opportto receipt and 20 days DSO contributing to a lost revenue opport
Page 9
Primary Metric Secondary MetricOpportunity Pareto
Pareto 1 Pareto 2
Management by Fact Management by Fact Bridges Hoshin Plan to ProjectsBridges Hoshin Plan to Projects
0
50
100
150
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Goal Actual Baseline
0
10
20
30
40
50
60
J F M A M J J A S O N D
S ec o ndary M etric
Problem Statement: What is the goal of the project, how will it be measured, what is the baseline performance, what is a benchmark level and what will achieving this goal do for the business.
0
0.1
0.2
0.3
0.4
0.5
0.6
A B C D E F
Key F ac to rs
Supporting Data
L abo r T e lec o m F ac ilit ies O verhead
Predictive Impact StatusWhenWhoCountermeasures and Activities
Key Drivers and Root Cause
Action Plan
0
50
100
150
200
A B C D E F
Key F ac to rs
0
200
400
600
800
1000
1200
A B C D E F
Key F ac to rs
Key Drivers from Pareto
Projects to address
Root Cause
Black Belts
Assigned
Predictive Impact to Business
Case
Page 10
Lean Six Sigma
• Reduce variation and eliminate defects through data-driven methodology
• Improve operating margin through the reduction in cost of poor quality
• Identify the root cause(s) of a problem and drivers of variation using structured analysis
• Affect and sustain change through the prevention of defects and pursuit of continuous quality improvement
• Maximize process velocity (reduce completion time, eliminate waste)
• Reduce costs by removing complexity and waste from the process
• Create flow by separating “value-added” and “non-value-added” activities to eliminate waste
• Understand flow, from the point of customer request through product or service delivery
• Six Sigma, DFSS and Lean are deployed at Bank of America to accomplish Hoshin objectives across the organization
• Deployment of Lean and Six Sigma methodologies are driven by the opportunity and objective of projects
• Both Lean and Six Sigma are executed in a Define, Measure, Analyze, Improve and Control Framework
• Tools are shared across methodologies as required for each project
Primary Emphasis
Six Sigma and Lean
Page 11
Cumulative CertificationsGreen Belt, Black Belt, Design for Six Sigma
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Dec-0
1
Jan-
02
Feb-0
2
Mar
-02
Apr-0
2
May
-02
Jun-
02
Jul-0
2
Aug-0
2
Sep-0
2
Oct-02
Nov-0
2
Dec-0
2
Jan-
03
Feb-0
3
Mar
-03
Apr-0
3
May
-03
Jun-
03
Jul-0
3
Aug-0
3
Sep-0
3
Oct-0
3
Nov-0
3
Dec-0
3
Jan-
04
Feb-0
4
Mar
-04
Apr-0
4
May
-04
Jun-
04
Jul-0
4
Aug-0
4
Sep-0
4
DFSS
Black Belt
Greenbelt
Cumulative CertificationsCumulative CertificationsOrganization-wideOrganization-wide
Page 12
Green Beltwith Lean
Green Belt with DFSS
Green Belt
Champion approves project to be entered into NIKU
DFSS E-LearningDFSS Training& Exam
Lean Training & Exam
Attend GB Training Week 2 and Pass Green Belt Exam
Complete certification packet, enter into CAS, Enter Savings into QPFM
Pass GB Skill Assess Pass Lean Skills AssessPass DFSS Skills Assess
Complete Project* (LOBs must average $250K/candidate) with sustained results
Complete Six Sigma E-Training, Attend GB Training Week 1
Lean Enterprise Training & Exam
MasterBlack Belt
Black Belt Lean Master
2 Weeks of BB Training and Exam
Complete Project* (s) >$1MM and pass skills assessment
Complete certification packet, enter into CAS, Enter Savings into QPFM
Green Beltwith Lean
Green Belt with DFSS
Green Belt
Champion approves project to be entered into NIKU
DFSS E-LearningDFSS Training& Exam
Lean Training & Exam
Attend GB Training Week 2 and Pass Green Belt Exam
Complete certification packet, enter into CAS, Enter Savings into QPFM
Pass GB Skill Assess Pass Lean Skills AssessPass DFSS Skills Assess
Complete Project* (LOBs must average $250K/candidate) with sustained results
Complete Six Sigma E-Training, Attend GB Training Week 1
Lean Enterprise Training & Exam
MasterBlack Belt
Black Belt Lean Master
2 Weeks of BB Training and Exam
Complete Project* (s) >$1MM and pass skills assessment
Complete certification packet, enter into CAS, Enter Savings into QPFM
Bank of America CertificationBank of America Certification
Page 13
Are you an MBBor a BB?
Has the GBCandidate
passed the GBexam?
Has the GBCandidate passed
the skillsassessment?
Has the GBCandidate
submitted acertification deck?
Contact GBCandidate's
GB Instructorfor GB exam
Administerexam to GBcandidate
Send exam toSix Sigma
Instructor forgrading
Obtain skills assessmenttemplate from Six Sigma
Education website under Toolsand Templates
Administerskills
assessment toGB candidate
Does GBCandidate
pass exam?
Does GB Candidatepass skills
assessment?
Is the Controltollgate
complete?
Contact Champion, FinancePartner and GB Candidate to
set up the Control tollgate
Does projectpass Control
tollgate?
Refer projectto LOB MBB or
BB forcertification
NO
YES
NO
YES
NO
YES
NO
YES
Coach GB Candidate tocomplete certification
deckNO
YES
NO
YES
Coach GB onnecessary
skilllsNO
Start END
Coach GBCandidate onproject to fill in
any gaps
NO
YES
MB
B /
BB
Coach GB onnecessary
skillls
Performcontrol tollgate
Enter projectdetails in CAS
Check "Sendto Finance"
Check"Create" in
QPFM
GB must pass exam and skills
assessment
DMAIC Tollgate
Deliverables
Finance must
approve savings
Green Belt Certification ProcessGreen Belt Certification Process
Page 14
Sends automaticemail notifying SixSigma Education
Includes, automatically,candidate as being "certified" onCAS website & spreadsheet for
Action Legal
CAS automatically sends email toMBB/BB requesting certification
deck be sent to Six SigmaEducation
Use CAS tocertify project
Check CAS to see ifproject is displayed inred (meaning ready
to certify)
FIN
AN
CE
PA
RTN
ER
CA
SM
BB
/ B
B
Send certifcationdeck to Six Sigma
Education
AC
TIO
N
LE
GA
L Uses info fromCAS to sendcertification
package to GB
Check off inCAS that
package hasbeen sent
SIX
SIG
MA
ED
UC
ATIO
N
Generatespreadsheet of
allcertifications
Check to ensureGB's name appearson certification list
END
HOW TO CERTIFY A GREENBELT
Enter savings andmove projectstatus from
preliminary tocontrol
Automated System to
send certification
package
Green Belt receives
Certification Plaque, Shirt, Reward Points
Project Certification
Decks are retained in CAS system
Green Belt Certification ProcessGreen Belt Certification Process
Page 15
CS&S Productivity Plan
J F M A M J J A S O N D
$MM
Cumulative Forecast Plan
Direct Expense Pareto
Personnel Telecom Gen Op Exp. Leases Furn &Equip
$mm
Cost Reduction Pareto
Carry
-ove
r fro
m '0
2
VRU Effe
ctive
ness
Shrink
age
E2E H
andle
Tim
e
On-
Line
Migr
ation
Gat
e Coll
apse
Ove
rhea
d Red
uctio
n
$mm
Cost per Contact by Channel
e-mail Agent VRU On-Line
Example: CS&S Shareholder MBFExample: CS&S Shareholder MBF
Page 16
• VRU Effectiveness• Online Channel Migration
Strategy• E2E Handle Time Reduction• Shrinkage Reduction• Failed Customer Interactions
Projects Identified by MBFProjects Identified by MBF
Page 17
Active Online Banking Users & % DDA HHs
2,500
3,500
4,500
5,500
6,500
30.0%
35.0%
40.0%
45.0%
50.0%
Total Active Users 4,431 4,563 4,704 4,805 4,920 5,060 5,263 5,484 5,723 5,950 6,078 6,305
% DDA HH Penetration 33.0% 34.0% 34.9% 35.6% 36.2% 37.0% 38.8% 39.6% 41.0% 42.5% 43.1% 44.5%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Strategic Target2003 Goal/ForecastCurrent MonthBaseline
4.3MM – Dec 2002 6.078 MM – Nov 2003 6.0 MM / 6.3 MM N/A
Source: eCommerce Active User MBF
Active Online Banking Users & % DDA HHs
2,500
3,500
4,500
5,500
6,500
30.0%
35.0%
40.0%
45.0%
50.0%
Total Active Users 4,431 4,563 4,704 4,805 4,920 5,060 5,263 5,484 5,723 5,950 6,078 6,305
% DDA HH Penetration 33.0% 34.0% 34.9% 35.6% 36.2% 37.0% 38.8% 39.6% 41.0% 42.5% 43.1% 44.5%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2003 YE Goal = 6,000 M
(000
)
Active Online Banking Users & % DDA HHs
2,500
3,500
4,500
5,500
6,500
30.0%
35.0%
40.0%
45.0%
50.0%
Total Active Users 4,431 4,563 4,704 4,805 4,920 5,060 5,263 5,484 5,723 5,950 6,078 6,305
% DDA HH Penetration 33.0% 34.0% 34.9% 35.6% 36.2% 37.0% 38.8% 39.6% 41.0% 42.5% 43.1% 44.5%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Strategic Target2003 Goal/ForecastCurrent MonthBaseline
4.3MM – Dec 2002 6.078 MM – Nov 2003 6.0 MM / 6.3 MM N/A
Source: eCommerce Active User MBF
Active Online Banking Users & % DDA HHs
2,500
3,500
4,500
5,500
6,500
30.0%
35.0%
40.0%
45.0%
50.0%
Total Active Users 4,431 4,563 4,704 4,805 4,920 5,060 5,263 5,484 5,723 5,950 6,078 6,305
% DDA HH Penetration 33.0% 34.0% 34.9% 35.6% 36.2% 37.0% 38.8% 39.6% 41.0% 42.5% 43.1% 44.5%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2003 YE Goal = 6,000 M
(000
)
0Subgroup 10 20 30
0.70
0.75
0.80
Indi
vid
ual V
alue
10-Aug 19-Oct 28-DecWeek Ending
1
1
11
56 6
5 5 6 6
1
21 1
1
Mean=0.7616
UCL=0.7939
LCL=0.7293
0.00
0.01
0.02
0.03
0.04
0.05
Mov
ing
Ran
ge
1
R=0.01215
UCL=0.03969
LCL=0
Weekly VRU Effectiveness for Voice Guided Service (5/19/03-12/28/03)
CSR Contacts Reduction Impact
0
200
400
600
800
0.10
0.15
0.20
0.25
0.30
0.35
Contacts Avo ided - User Growth 53 109 169 225 292 352 420 490 543 603 665 715
Contacts Avo ided - OLB Pro jectInit iat ives & OLB Migration
Contacts Avo ided / OLB User 0 .20 0 .22 0 .26 0 .24 0 .23 0.23 0 .23 0 .16 0 .15 0 .16 0 .18
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Year End ResultsYear End Results
Online Banking EnrollmentVRU EFFECTIVENESS
0.730.740.750.760.770.780.79
0.8
Jul '0
2
Aug '02
Sep '0
2
Oct '02
Nov '02
Dec '0
2
Jan '0
3
Feb '0
3
Mar
'03
Apr '03
May
'03
Jun '0
3
Jul '0
3
Aug '03
Sept '0
3
Oct '03
Nov '03
Dec ' 0
3
Benchmark 2003 Goal Plan
Projections Actual
Page 18
Common Cause Variation
Monthly
Common Cause Variation
Monthly
Special Cause:Action Required
Common Cause:No Action Required
Special Cause:Action Required
Common Cause:No Action Required
Shrinkage Percentage
24.00%
26.00%
28.00%
30.00%
32.00%
34.00%
36.00%
38.00%
40.00%
42.00%
44.00%
Sh
rin
kag
e P
erc
en
tag
e
Actual Benchmark Goal UCL LCL
95% Confidence Bands
Defects Per Million Opportunities (DPMO)
0
2000
4000
6000
8000
10000
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Actual 2003 Goal Benchmark Forecast
4th Qtr DPMO 3,203
3,421 Goal
Year End ResultsYear End Results
Contact Handle Time Contact Center Shrinkage
Failed Customer Interactions
Page 19
The Lean MethodologyThe Lean Methodology
• Identify high leverage opportunities• Map the Current State Value Stream• Analyze the Current State for all sources of waste or non-value added activity• Establish Improvement Targets• Design a Future State Value Stream utilizing Lean tools and Kaizen teams • Implement Changes• Standardize the Process
Principles of LeanPrinciples of Lean
Determine Value
Define Value Stream
Establish Flow
Create Pull
Strive For Perfection
Determine value from the eyes of the customer
Eliminate barriers to flow
Produce only what is needed when it is needed
Design process improvement (kaizen) into the control system
• Concept to Launch
• Order to Delivery
• Raw Materials to Customer
• Support
• Queues• Poor Layout• Defects• Breakdowns• Specialization
Principles of LeanPrinciples of Lean
Determine Value
Define Value Stream
Establish Flow
Create Pull
Strive For Perfection
Determine value from the eyes of the customer
Eliminate barriers to flow
Produce only what is needed when it is needed
Design process improvement (kaizen) into the control system
• Concept to Launch
• Order to Delivery
• Raw Materials to Customer
• Support
• Queues• Poor Layout• Defects• Breakdowns• Specialization
Adapted from Lean Thinking, J. Womack, D. Jones
Page 20
CS&S Lean Center of ExcellenceCS&S Lean Center of Excellence
• Implementation of Lean COE run projects
• Facilitate the certification of Lean Greenbelts within Customer Service and Support
• Create awareness of the Lean tools and methodology within Customer Service Support
CS&S Q&P Exec
Lean Center of
Excellence
CS&S Leadership
Team
Responsibilities
Strategic Alignment
Fleet NE Operator
/ MBB
RS Operator
/ MBB
Client Operator
/ MBB
Card/IBCC
Operator/ MBB
CA/NW Operator
/ MBB
Model Operator
/ MBB
Key Processes
Execute/Facilitate
Page 21
Improving Flow of Business ProcessesImproving Flow of Business Processes
Lean is “flow” within a value stream through elimination of non-value added activity (waste or muda)
• Lean value streams consume less of everything: Less time, less space, less resources
• Lean initiatives follow the path of the product or service to reduce completion time, improve cycle time and reduce overall cost of the operation
WORKPROCESSES
NORMAL
VALUEADD
FLOW REDUCE ELIMINATE
ABNORMAL
NECESSARY
NON VALUEADD
UNNECESSARY
Goals: • eliminate the abnormal
and the unnecessary NVA• reduce the non-value
added but necessary• place the value-added
processes into a natural flow sequence.
Evaluation of process steps
Page 22
Define project to address business gap identified by champion
Assess how well the product flows to meet customer demand for value
Complete detailed analyses on select opportunities to design future state
Finalize and pilot solutions, analyze results, and plan for deployment
Implement improvements, validate results, and close project
Business Assessment • Project Charter• Project Metrics• E2E Process Map
(High Level)• Customer
Value(VOC)Change Management
• Stakeholder Analysis• Voice of Associate• Obstacles/Enablers
(Project FMEA) • Project Team• Project Timeline • Communication Plan
Customer Demand• Product Families• Demand Profile• Takt Time/Capacity
Activity of the Product• Detail Process Map• Time Value Maps• Information Flow • Spaghetti/Org. Map• Monuments• RTY Analysis
Opportunity Assessment• MUDA Costing • Prioritization Matrix • Financial Assessment
Resource Analysis• Skills Matrix• Activity of Associate• Activity of Equipment• Layout/5S Analysis
Process Analysis• FMEA / Cause & Effect• ICE / Five Why’s• Risk Assessment• Oper. Efficiency Model
Future State Analysis• Business Case (COPPO) • Future State Map • WIIFM Validation
Process Design• Material Flow • Information Flow
Process Standards• 5S Implementation• Standard Work• Staffing / Roles
E2E Coordination • Leveling• Kanban
Prove/Refine Solutions• Lean Metrics• Pilot / Simulation• Cost - Benefit• Deployment Plan (MGP)
Operational Mgmt.• Visual Controls• Error-proofing• Control Plan• Training
Deployment• Implementation
(per project scope)• Rebalance Resource • Document Results• Validate Financials
Cont Improvement• Kaizen Strategy• Lessons Learned• Replication Plan
DEFINE MEASURE ANALYZE IMPROVE CONTROL
Launch Projects
Focus on Critical Opportunities
Pilot Process Changes
Deploy Improvements
Validate Benefits
ID Business Need
Lean Roadmap - DMAICLean Roadmap - DMAIC
Page 23
Pre-work
Face to Face1 (one per
physical location)
Middle Work
Face to Face2 (one per
physical location)
Pilot PhaseCompletion
•Scope Project•Identify Resources•Establish Timeline
3 weeks 1
week
2 weeks
1 week
8 weeks
75 Business Days
•VOA, Activity of Associate, Activity of Product•E2E, Spaghetti Mapping
•Process Analysis•TVM, COPPO Estimates•Preparation for F2F2
•Time Studies•Revise AOP, AOA, AOE•To Be Map•Demand Profile
•Pilot / Discovery•Implementation Plan•Savings Finalized•Certification
Anatomy Of a Lean ProjectAnatomy Of a Lean Project
Phases may overlap. Project participants should use condensed working sessions to accomplish remaining tasks.