News source: Timesleader

Bank recognizes success of projects in cutting costs, growing revenue
RICK ROTHACKER
Staff Writer

In matching red shirts and black pants, 80 Bank of America Corp. employees Tuesday crowded a darkened stage in an uptown hotel, waiting to hear their achievements called out.

As a spotlight flashed on 15 teams of employees, an announcer highlighted projects with catchy titles like "E-Invoice Reconciliation Process" and "Reduce Unassigned Balances in Central Region."

This was how Bank of America praised employees who last year carried out its 15 best "Six Sigma" projects, designed to increase revenue and cut costs at the No. 2 U.S. bank by assets.

Four years ago, Bank of America embraced a process typically used by manufacturing companies to improve quality control. Now lingo like "Hoshin" and "black belt" is common at the Charlotte company.

At its third annual "Best of Six Sigma Expo," Bank of America gave a glimpse of how it used the technique in the past year and how it could be applied to future projects such as its proposed MBNA Corp. acquisition.

So far, Six Sigma has helped Bank of America reap about $2 billion in revenue gains and cost savings, said Milton Jones, quality and productivity executive. The goal is to contribute about $1 billion per year toward the company's revenue growth and expense reduction efforts.

Besides contributing to a record $14.1 billion profits in 2004, Six Sigma is increasingly a must for employees to get ahead. When managers are filling positions, they will sometimes request candidates have Six Sigma experience, Jones said. More than 5,000 employees have earned green belt, black belt and other certifications.

"If you talk to those who are certified, they would say it made a difference in their performance and that leads to advancement," Jones said.

The bank expected as many as 1,500 employees, vendors and others to attend the one-day expo at the Charlotte Marriott Center City. The event's goal is to reward employees as well as spark ideas.

The projects ranged from improvements to behind-the-scenes processes to changes in the way bankers greet customers in branch lobbies. Three of the projects focused on fraud.

Bank of America lost $24 million in 2003 from fraudulent transactions using PIN numbers. A Six Sigma team found some of those losses came from customers making invalid claims and developed a way to challenge them. The project is expected to save about $3.5 million a year.

Another booth underscored the use of Six Sigma during the company's integration with FleetBoston Financial Corp. Bank of America announced the acquisition in October 2003 and is completing the last major account conversion in the Northeast later this month.

Shortly after the merger announcement, the company developed a plan for 600 projects needed to merge the two banks, said Brad Dalton, quality and productivity executive for the transition. One of the first steps was to survey thousands of Fleet customers in the Northeast.

One finding was that they wanted longer branch hours, a change that could be made quickly to win over customers, Dalton said. Since 2003, the percentage of customers who have a highly positive view of the acquisition has increased to 44 percent from 15 percent, he said.

Now Bank of America is embarking on a proposed merger with Wilmington, Del.-based credit card giant MBNA, which isn't a Six Sigma user.

"We look forward to taking this to other opportunities," Dalton said.

Six Sigma at BofA

• In 2001, Bank of America Chairman Ken Lewis turned to Six Sigma as a way to promote revenue growth and improve deteriorating customer service scores.

• Six Sigma, pioneered at companies such as General Electric Co. and Motorola Inc., is a regimented process for analyzing problems and fixing them.

• Its disciples start with action plans called "Hoshin" -- Japanese for "compass" -- and implement them step-by-step. Measuring performance is a big part of the process.

• Employees can earn "green belts" and "black belts" for successful projects.