American Fidelity Assurance Sizzles with "Lean"
April 15, 2008
By Sarah Boehle
Determined to ferret out waste and increase efficiency, American Fidelity Assurance adopted Lean in 2006 as part of its continuous process improvement efforts.
Like the popular quality tool Six Sigma, Lean uses a systematic approach to eliminate waste from the supply chain while developing products and processes explicitly driven by customer requirements.
Training recently spoke with Catherine Denwalt-Graham, director of strategic quality management, and Bev Wood, VP of training, about the program and how it works, and asked them for their tips for success.
Training: Why did you decide to go Lean?
Denwalt-Graham: Process improvement isn't new to us. We've been doing it since the late '80s using various approaches and methodologies. A few years ago, we started taking another look at this area and decided we wanted to find something that would take us to the next level, while building upon what we already knew. Lean fit well with our culture. It's not statistics-driven like Six Sigma and it focuses on getting rid of low-hanging fruit. It's also a way of empowering our people to come up with better solutions for everyday processes.
Training: Who are your Lean facilitators? What do they do? How are they selected?
Denwalt-Graham: We followed up our 2006 Lean pilot in early 2007, when 24 employees completed 64 hours each of Lean facilitator training, and plans are in the works to train several more.
We purposely target those who may not be managers but who have the skills to become good Lean facilitators. They come from every area of the company, including frontline production, claims, etc.
There is a list of characteristics that we require of potential facilitators. First and foremost, we look for people with a thick skin. As most people know, change efforts aren’t easy in any organization, so we look for people who are confident in themselves, understand processes, and who have the ability to communicate effectively. There's an interview process, and I typically use that opportunity to get a feel for how potential facilitators communicate. I let them know how challenging the role is and purposely try to scare them off from doing it, in a way. When they don’t scare off easily, I know that the opportunity resonates with them, and that they really want to do it.
Once onboard, Lean facilitators are committed to the role for at least two years. During that time, they are expected to accomplish two to three Lean initiatives per year—one of which must be across divisions. They're also expected to teach others about Lean and to act as mentors and coaches to other Lean facilitators.
Training: How do you identify Lean initiatives?
Denwalt-Graham: Our managers went through a two-day training program last year and from that, we developed a five-page list of potential Lean initiatives. We knew there were a lot of processes with pain surrounding them, so we decided to tackle those first. We're also finding that when we do a Lean initiative in a certain area, it often creates another one. We'll begin an initiative on a certain process and when we break it down, we'll find six other processes associated with it. We’ll often give those pieces to various facilitators.
Moving forward, the end goal is to fully integrate Lean into the organization, not just as an event, but as the way we do process improvement. We want ideas to come from everywhere, so we're working hard to take a bottom-up approach by facilitating, encouraging and enabling decision-making on the front lines and by bringing everyone together in a continuous search for better, more efficient ways to conduct business, deliver more value to our customers, and become more profitable.
Training: What are the results of the program thus far?
Denwalt-Graham: We've made a lot of progress in a short amount of time. As of today, we have already completed about 28 Lean initiatives, the results of which are having a profound impact on every area of the company. Some examples …
• One initiative we just completed involved product development—which is a lifeblood thing for us. Using Lean, we were able to streamline processes and shorten the product development cycle from 18 months to approximately nine months.
• The HR and payroll groups finished an initiative a few weeks ago that will significantly reduce lead time associated with their processes and make everyone's job easier.
• We made improvements to the payment of medical records requests that resulted in a 63 percent improvement in turnaround time and a 72 percent improvement in cost per transaction.
• We streamlined our training enrollment system, an initiative that resulted in a 100 percent reduction in electronic file space, a 94 percent reduction in paper storage space, and a 50 percent improvement in electronic communications.
Training: What tips can you offer to others interested in using Lean?
Denwalt-Graham:
• Train your own people. As a company, we have been through several different process improvement initiatives where we used external consultants to train our people. The problem was, we couldn’t sustain it because we didn’t have the knowledge we needed in-house. With this initiative, we have made a point to train our own people and develop the knowledge and skills we need in-house.
• Recognize that no matter what you do, you are going to screw up. I was at a Lean conference in March, and it was amazing to me to hear from companies who have been at this for four to six years who said, "If only I had known better, I would have done it this way." The lesson is that no matter how much you plan and how many best practices you follow, you will make mistakes. And that's okay. Just be prepared for it.
• Just do it. Learning from others and talking to others about Lean is a smart thing to do, but there is no substitute for getting in there and just doing it. I can talk to someone about Lean for hours, but you have to experience it to really understand it.
• There's not always a need for speed. At first, we were so eager to launch Lean that we rolled it out perhaps a little too quickly and left middle management out of the process a little more than we should have, at least in the beginning. In our zest to implement, we even violated a few mores of our own culture surrounding communication. Over time, we have learned to slow down and take things step by step.
Wood:
• Communicate your way through change. Lean is about change, and it doesn't matter how long you've been at it, change is hard. So do whatever you can as a company to help mitigate that up front—such as offering additional training and being overzealous in communicating and following up. After our first group of facilitators was trained in Lean, for example, Catherine and her group realized fairly quickly that the Lean facilitators needed additional skills—beyond those they acquired in initial training—around communication and conflict resolution. So we continue to put them through training in these areas to supplement existing skills and give them the tools they need to get through these meetings successfully.
• Train 'em all. A key to our success is the fact that we didn't just train Lean facilitators. To further integrate the Lean methodology into our culture, we are targeting training toward everyone. We put our managers through Lean Champions Training, for example, where we introduced them to the tool, talked about their role in Lean implementation and explained what we need from them. We held All-Colleague Lean Meetings where Lean professionals came in and talked about why Lean is so important and the benefits we can derive from it. And we developed Lean 101 training and Executive Management Lean training. Throughout all the training, the message is the same: Lean is central to our mission of getting and keeping customers, and our people will ultimately determine whether implementation is successful.
American Fidelity Assurance Company is a family-owned organization providing insurance products and financial services to education employees, trade association members and companies worldwide. The company is headquartered in Oklahoma City, Okla. In 2008, it placed 61st on Training magazine's Top 125 list, an annual ranking of organizations that excel at human capital development.
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