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Fast-Tracking Culture Change

Vanguard's Rich Luzzi says "We are creating better leaders" through the Six Sigma program.

September 18, 2003
Related Topics: Corporate Culture, Behavioral Training, Total Quality Management
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Name: THE VANGUARD GROUP
Location: VALLEY FORGE, PENNSYLVANIA
Business: INVESTMENT MANAGEMENT COMPANY
Employees: 10,000

The Vanguard Group implemented Six Sigma two years ago to add rigor and discipline to its management style. Several years earlier, the company had seen rapid expansion, which resulted in some loss of accountability in the management team, says Rich Luzzi, principal of the Center for Excellence, Vanguard’s internal Six Sigma organization. "There was too much management by the seat of the pants," he says. "We needed to add metrics and measurement to the process."

    They decided to implement Six Sigma and created a custom approach, which they named "Vanguard Unmatchable Excellence." At the heart of VUE are dashboards, computer-based tools that are used to collect and report data about vital customer requirements and business performance. All executives define dashboards for their core strategies and then broadcast them to the workstations of any workers whose performance affects that measurement, Luzzi says. The dashboards are constantly updated to show the results of the teams’ efforts. For example, the people who answer the phones can see the impact that their interactions with customers have on specific business drivers by monitoring their dashboards.

    In the beginning, Vanguard executives used dashboard metrics only at the management level, but by year two, they had disseminated them to the entire employee population in order to accelerate the culture-change process. "When people see the impact they have on the Six Sigma metrics, they know it’s not just management speak," Luzzi says. "They understand the value of their performance, and that’s where it all comes together."

    To help people understand the Six Sigma philosophy and how their efforts affect the dashboard measurements, Vanguard offers several levels of training, which is all conducted in-house by VUE masters (also known as master black belts). Employees--who are referred to as "crew members"--receive overview training that introduces them to VUE concepts and terminology. Once they have been chosen to participate on a VUE project, they receive team-member training. Training for VUE specialists (green belts) is given to anyone considered a leader, change agent, or influencer in the company. They learn how to identify and implement projects, build dashboards, and make use of VUE philosophies, Luzzi says. The training also teaches them how to communicate the message to their team members. This is critical to drive the VUE mentality into the leadership organization. Finally, those chosen to be VUE experts (black belts) receive the full four-week training program.

    At most other Six Sigma companies, black belts maintain their role for two or more years. VUE experts stay in the position for only 12 months. During that time they are expected to finish training, complete two projects, pass a certification exam, and then return to a leadership role in the company.

    By putting its brightest people through a rigorous fast track of Six Sigma training and experience, Vanguard is quickly filling its ranks with individuals who use Six Sigma’s measurement-based approach, and they are infusing the culture with the new management philosophy. "Our goal with Six Sigma is to change the way we manage," Luzzi says. "We are creating better leaders through the use of Six Sigma."

Workforce, May 2003, pp. 66-67 -- Subscribe Now!

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