Lean Six Sigma for The Arts, Entertainment & Healthcare Nonprofits, Too!

1. Lean Six Sigma for The Arts, Entertainment & Healthcare Nonprofits, Too! Prepared by: Dr. Allison Frazier Jackson President, AJA and CEO of The Edwina Group, LLC

2. WHEN LOVE AND SKILL WORK TOGETHER EXPECT A MASTERPIECE JOHN RUSKIN

3. PICK BATTLES BIG ENOUGH TO MATTER SMALL ENOUGH WIN JONATHAN KOZOL

4. Our Challenge Our challenge is to build a “lean process” framework that sustains excellent performance for the Arts organizations. ---It does not exist. “Some people think lean means “not fat” as to laying people off”– David Upton, Albert J. Weatherhead III Professor of Business Administration at Harvard Business School. “But there are other processes that can be analyzed through lean such communications, supply chain, cycle time to deliver service to customer. That need to be addressed in the Arts…” – A. Jackson Julia Hanna, “Bringing “lean” Principles to Service Industries”, Harvard Business School, October 22, 2007. “Nonprofit organizations should consider creating wealth rather than merely redistributing it..” Bill Shore in “Doing good by doing well” (www.mckinseyquarterly.com/article_print.aspx?L2=33&L3+O&ar=1045)

5. Introduction Objective Two Questions Where do we go from here? Critical next steps for nonprofit management that lead to improved performance and attract funders? (Dr. Allison Jackson) How to maintain our mission and key staff while cutting programs ? (Tonia Papke) Attendees can expect to leave this session armed with information about lean six sigma processes that improve nonprofit organization performance and attract funders. Who is using lean six sigma in their organization today?

6. Today’s Agenda Lean Six Sigma Overview - Allison Financial / Management Examples - Tonia Examples of techniques in Management Planning Control Operations Analysis Conclusion • What is Lean Six Sigma? • Big Picture of Lean Six Sigma: The Challenge for the Arts • Deploying Lean Six Sigma in the Arts • Examples • Summary

7. Lean Thinking Philosophy Expose Problems “True North” Value Added Time = Lead Time Current State Future State Solve Problems Full of Waste, Variation, and Constraints Identify and eliminate all activities that are waste (Muda). Focuses on optimal flow throughout the process. Customer focused.

8. Types of Systems Improvement • Total Quality Management • Total Productive Maintenance • Quick Replenishment • Re-engineering And did we mention… • Systems Improvement • Kaizen • Lean Thinking • Flow • Continuous Improvement • Just In Time • Theory of Constraints • Quality Circles • Six Sigma Many of the Teachings Are The Same

9. Why Use Lean Six Sigma Tools? What Big Do We Expect?: • All Systems Improvement teachings emphasize ways of thinking – not just sets of practices • Every employee is hired to use their mind – not just their body • Ultimate objective of all continuous improvement is Human development • The real power is when everyone is applying “lean thinking” to their work every day • When everyone is giving birth to miraculous new ideas every day • The biggest change of all – EMPLOYEE EMPOWERMENT

10. Lean Six Sigma Roles – Who? Owns vision, direction, business results Leads change Allocates Resources Runs Steering Committee Owns Value Streams Owns financial results Removes Barriers Coordinates with Steering Committee & LSS Deployment Lead Internal Deployment Leader Owns Deployment Plan Captures and Reports Metrics Executive Champion LSS Deployment Lead Value Stream Champion All Employees Process Owners Master Black Belt • Provide data and voice of customer • inputs to VSA, RIE, and Projects • Apply concepts to their own jobs • and work areas Sponsors LSS projects Responsible for execution Provides resources for project Reports ROI Removes Roadblocks Trains Black Belts / Green Belts Leads Complex Projects Full-time position Black Belts TeamMembers Green Belts Leads larger projects Coaches Green Belts & Junior BBs Full-time or Part-time position Conducts LSS Training Develops LSS strategic plans Team or Project specific support Part time Lead projects SME on process area Part time role

11. What is Lean Six Sigma? Lean Six Sigma is a business improvement methodology which combines the tools from Lean manufacturing processes and Six Sigma. Lean focuses on speed and lower waste; Six Sigma focuses on measuring quality. The result is better quality faster –it can be applied to any organization.

12. How is Six Sigma Implemented? According to iSixSigma Magazine Survey of 1500 global six sigma managers (2006) responded to the question as follows: • 46% - Enterprise wide • 23% - One or more business units • 11% - Small-scale pilot • 20% - Six Sigma trained resources but no formal Six Sigma program

13. Which Deployment Model to Use? Impact • Business Transformation • Organization wide deployment • Major culture change • Strategic improvement • Targeted deployment on critical problems • Projects necessary for success or survival • Problem solving • Specific operational problems • Incremental improvements in organizational performance Scale • Entire organization • Department • Project/Section/Team Organization Readiness • Culture • Past process experience • Management team • Stability Select Model Based on Goals of the Organization

14. DFLSS Model Optimize Verify Define Design Identify 1-Description/ Problem Refined 2-Business Case Approved (Start It Page and Assumptions in Briefing) 3-Schedule Established 4-Quad 1-Customers Identified 2-Customer Needs Gathered (VOC) 3-CTQs Specified (In Measurable Terms) 4-Stakeholder Analysis 5-Risks Quantified(Initial Mitigation Approach Identified) 1-Design Concepts Developed (Functional Analysis,High Level Requirements, Mapping of these to CTQs) 2-Alternative Concepts Evaluated (Trades) and Optimum Solution Selected (with rationale presented) 3-High Level Design Developed (e.g., architecture, next level process steps, etc.) 4-High Level Design Evaluated Against CTQs/ Requirements 1-Detailed Design Developed (Design captured How, Process Work Instruction Steps Developed, etc.) 2-End Product* implemented then piloted or simulated (Describe this) 3-End Product Optimized (Describe how) 4-Identify Specific post-institutionalization control measures to be monitored (What to Measure) 1-End product Verified that it does satisfy CTQs (and all requirements identified during earlier phases) 2-End Product “Roll-Out” Plan Established and “Bought Into” (By Process Owner, When? How Trained?, etc.) 3-Control Plan Defined/ Established (What Metrics, Who, How Often, etc.) 4-Financial Validation Plan Established (How, Who, How Often, etc.)\ 5-Replication Opportunities Identified 6-Lessons Learned Summarized Tollgates prior to proceeding to Next Phases

15. Step 1: DEFINE • Goal • Define the project’s purpose and scope and get background on the process and customer • Output • A clear statement of the intended improvement and how it is to be measured • A high level map of the process • A list of what isimportant to thecustomer Project Charter VOC SIPOC IMPROVE

16. Step 2: MEASURE • Goal • Focus the improvement effort by gathering information on the current situation • Output • Baseline data on current process performance • Data that pinpoints problem location or occurrence • A more focused problem statement Determine Measures based on CTQs IMPROVE Measure As-Is Patterns

17. Step 3: ANALYZE • Goal • Identify root causes and confirm them with data • Output • A theory that has been tested and confirmed IMPROVE Process Analysis Analyze waste andvariation Identify root causes Data Analysis

18. Step 4: IMPROVE • Goal • Develop, try out, and implement solutions that address root causes • Output • Planned, tested actions that should eliminate or reduce the impact of the identified root causes Solutions IMPROVE FMEA Pilot - Implement tation

19. Step 5: CONTROL • Goal • Use data to evaluate both the solutions and the plans • Validate that all changes adhere to all operating company change control, and compliance requirements • Maintain the gains by standardizing processes • Outline next steps for on-going improvement including opportunities for replication • Output • Before and After analysis • Monitoring system • Completed documentation of results, learning's, and recommendations Standardize Control Document Monitor Evaluate Closure IMPROVE

20. Examples of LSS Tools for Project Management Guide Implementation

21. World Class Benchmarks How Do You Know You Did Well? Over 10% of total process time is value-adding activities – compared to 5% for most companies Continuous improvement culture • Quality Improvement – 50% per year (helped by new product or service introductions) • Productivity improvement – 2% per month • Total employee involvement, with sharing of authority, accountability and reward.

22. Measuring an Organization’sLean Six Sigma Maturity • Level 5 • Utilization of Trained Personnel = 100% • More than 40% Participation in Projects • 80% or more of Workforce Trained • >70% of Trained Belts Certified • LSS Contribution to Business KPI > 20% • Key Performance Indicators (KPI): • Utilization of Trained Personnel • Participation of Workforce in Projects • Training of Workforce • Certification of Green and Black Belts • Contribution to Business KPI • Level 4 • Utilization of Trained Personnel = 100% • 30 to 40% Participation in Projects • 60 to 79% of Workforce Trained • 55 to 70% of Trained Belts Certified • LSS Contribution to Business KPI 16-20% • Level 3 • Utilization of Trained Personnel >75% • 20 to 29% Participation in Projects • 40 to 59% of Workforce Trained • 40 to 54% of Trained Belts Certified • LSS Contribution to Business KPI 11-15% • In a Lean Six Sigma culture: • The leadership team drives Quality • Quality is embedded in our strategy • Lean Six Sigma is built into project planning • Targets are set in Six Sigma terms • Everyone is Lean Six Sigma trained • Lean Six Sigma tools are widely used • Quality is a core theme in communications • Everyone is engaged • Lean Six Sigma defines the way we work • Maturing Lean Six Sigma Culture • Level 2 • Utilization of Trained Personnel > 50% • 10 to 19% Participation in Projects • 20 to 39% of Workforce Trained • 25 to 39% of Trained Belts Certified • LSS Contribution to Business KPI 5-10% • Level 1 • Utilization of Trained Personnel <50% • < 10%Participation in Projects • Less than 19% of Workforce Trained • Less than 25% of Trained Belts Certified • LSS Contribution to Business KPI ≤ 5%1

23. SSC SD Balanced Scorecard

24. Examples of Lean Six Sigma Tools

25. http://systems2win.com Systems2win.com

26. ProcessModel Live • Link: www.processmodel.com/downloads/Arts.council.swf Dr. Allison Frazier Jackson

27. East West connection Case Study

28. Case Studies--Fundraising Event • Situation • After a death of a loved one, a client wanted to develop a golf tournament fundraiser as a way to thank the non-profit organization t • hat provided supportive care to her family. A small budget was earmarked for the golf tournament. The success of the event would • depend on support from the business community, family and friends. • What We Did • Prepared comprehensive promotion plan and timetable for golf tournament • Set dollar goals for tournament • Prepared budget • Developed target list of corporate contributors • Designed logo and promotional materials • Solicited in kind donations and corporate sponsorship • Solicited media coverage • Developed roles and responsibilities for volunteers • Coordinated logistics for a golf tournament • Secured donations for silent and Chinese auction • Produced signage for event • Worked with Country Club • Managed on site coordination of the event • The Results • Received overwhelming support from the business community, family and friends • Surpassed the fundraising goal • Provided funding for non-profit organization • Family pleased with the legacy established

29. AJAPlanning Framework for Arts LSS

30. Summary • Lean Six Sigma is a business improvement process directed at empowering employees to work to eliminate waste and deliver quality (better quality faster) • Lean Six Sigma is not about tools and techniques, rather about motivating a culture of change focused on customer satisfaction • The Handouts provided for this presentation offer access to books, online slide shows, 126 articles on lean six sigma, and consultant services • We need to collaborate and create a framework for Lean Six Sigma in the Arts until we create one.

31. Tonia papke, president of MDI Consulting

32. Thank You