Lean Six Sigma in Wealth Management
Apply the principles rather than the training, Lean Six is all about reducing control failures whilst keeping the cost of control acceptable
What is Six Sigma?
The Six Sigma methodology is a repository of various proven quality principles and techniques. Elaborating on the quality circle of William Edwards Deming, Six Sigma is structured in 5 phases:
A Six Sigma process goes through all stages and optimises the business processes step by step.
Why Six Sigma?
Sigma (σ) is the Greek letter which stands for the standard deviation of a population. The goal of the Six Sigma (6σ) methodology is a defect-free process. The sigma level indicates the extent to which the business complies towards having a defect-free process. Achieving a 6 sigma level literally means: you make a mistake only 3.4 times out of a million. (i.e. out of a million transactions you only have 3 errors).
Six Sigma as a Methodology
Traditional organisations accept a 2-3 sigma level, which means that these organisations are actually accepting 67.000 to 308.000 errors per million tasks. The increasing demand for quality from stakeholders is creating awareness that organisations have to operate at a higher sigma level. The Six Sigma methodology provides guidelines for structured business process improvements to reach the desired sigma level without large investments or intensive restructuring.
Inter alia the Six Sigma methodology provides for:
Enhance efficiency, quality and customer satisfaction
Breakthroughs for “unsolvable” problems
Short payback times and high ROI
Powerful roadmap with concrete tools
Six Sigma is a project-oriented approach for process improvements, which uses an organisational structure around the Six Sigma methodology to ensure a successful deployment.
Stakeholder Requirements As Standard for Performance
The Voice of the Stakeholder is the starting point of a Six Sigma project. Organisations working with the Six Sigma methodology are known for their high customer satisfaction and world-class performance in terms of quality. The Six Sigma methodology provides tangible and practical tools to map requirements and use this information as a starting point to improve processes.
Risk Management and Six Sigma
Six Sigma is a quality management methodology which originally focussed on variation reduction in the manufacturing industry. In the past, is was often believed that quality in the service industry could not be easily be measured. Over the last decade, the service industry processes are suitable for measurement thus providing valuable data for variation reduction.
Whilst we use the methodology, we have changed the terminology to be more relevant, such as Voice of the Customer into Voice of the Stakeholder, this stakeholder in the instance of regulatory risk is the regulator and in the terms of operational risk the shareholder.
We do split the processes into manufacture and distribution even though you are a financial services business, the terminology signifies the different mindsets that need to be applied as part of the assessment