Teams and training pays for this insurance company

Advertising budgets long have been guided by an old adage: Half of every dollar spent on advertising is effective and half is wasted. The risk in cutting advertising spending is that it often is uncertain which half is which.

Much the same challenge exists in programs to bring quality improvement practices into the workplace. What training is effective and what outcomes are measurable?

More important, in a marketplace that places a premium on efficient use of resources, how does an organization combine training and results in a seamless program? Simply put:

Companies can't afford training that produces results by trial and error. They need to know that all training is producing the intended results.

Ironically, experience doesn't guarantee success in developing and implementing results-focused training. Many companies find that the first investments in training often are the easiest to measure. Gains can be dramatic. But it is the subsequent, more subtle advances that often pay the biggest dividends, providing critical advantages in intensely competitive fields. The training that drives incremental improvements, though, becomes increasingly more difficult to measure.

The lessons learned at one company, Lutheran Brotherhood, are a valuable case history for other companies trying to measure the effectiveness of training and its impact on quality and customer satisfaction.

Training for results -- Lutheran Brotherhood determined that if it was to achieve its goal of becoming a world-class service provider it had to examine the way some of the company's most basic work processes are performed - all with an eye to how these processes deliver services to customers. Providing the training to change the way tasks are performed was relatively simple, measuring the impact of the changes in work processes on customer service and satisfaction was the challenge.

Today, Lutheran Brotherhood is into its fourth year of this company-wide effort Importantly, Lutheran Brotherhood's program to make work processes more efficient demands measurable results, not just activity. The purpose isn't simply to change the way a task is performed, but to improve the outcome of the task in ways that directly and measurably relate to Lutheran Brotherhood's world-class service objective.

Measurement was deemed to be essential... Lutheran Brotherhood has highly sophisticated means to measure the financial products it designs and sells. Evaluations of service to customers, however, often have been elusive.

What the company discovered applies to other organizations: often, the best measurements may be among the simplest. As obvious as the indicators of success sometimes seem after the fact, they often are obscure until the existing work processes are broken down and rebuilt with the customer as the focus.

Customer focused improvement at Lutheran Brotherhood

Go slow to go fast - Lutheran Brotherhood's program started slowly. The first training in early 1992 focused on seven managers, only one of whom actually undertook a project to change work processes. The less-than-overwhelming start, though, was an opportunity to review and revise the effort In fact, the scrutiny given the program during its start-up helped establish its credibility within the organization. The program as it now exists within Lutheran Brotherhood got under way in September, 1992, with the first team members trained and the initial six teams chartered.

The deliberate but steady progress has given the project the opportunity to review difficulties and make changes along the way. Just as importantly, it has given participants the chance to celebrate successes. This methodical approach has resulted in the involvement of about 15 percent of Lutheran Brotherhood employees in training and team participation. The goal of Lutheran Brotherhood never has been to train everyone at the same time, but to provide "just-in-time" training -- training tied to participation in a team.

Process improvement training with a customer focus -- Lutheran Brotherhood found that giving people on the front lines the permission and power to make improvements in the way they do their jobs produces the best results.

Training should give team members the skills to assess how they could better serve their customers and the forum in which to discuss possible improvements with their colleagues and, in some cases, directly with their customers.

Another basis of their approach is that the task at hand shouldn't be defined as cost-cutting, but rather how an organization can better apply its resources to serve the customer.

The improvement tools and approach Team participants begin their journey with a training session in which they are given essential tools, including an understanding of mapping, measuring and improving: 0

Mapping: Identifying the product of the process being examined, how it is produced and the needs, wants and expectations of the process' customers.

Measuring: Determining whether the process consistently produces what is intended.

Improving: Narrowing the gap between what is produced and what the customer needs, wants and expects.

Mapping, measuring and improving have laid the foundation for success at Lutheran Brotherhood... Surveying customers to determine their needs, then focusing the measurements on those needs, often is the overlooked secret ingredient in a recipe for success. Companies many times begin the task of improving work processes believing they already know what the customers want. And just as often they overlook some of the issues that are most important to the customers.

Customer surveys are the tool to ask customers what they need; to listen to their answers; and, to respond appropriately. Surveys also can provide answers when the customers may not know what they want. The surveys aren't simply statistical analyses of customers, but a key step in an integrated process that includes training, follow through and ongoing support.

Getting marketing materials to the customer - One of Lutheran Brotherhood's earliest successes is a case in point about simple but key measures of success. Sales and marketing materials are critical tools for Lutheran Brotherhood's field force of marketing and sales personnel. The company's stockroom processed more than 71,000 orders for the field force in 1993; yet, more than 12,000 requests couldn't be filled immediately because items needed were on back order.

A cross-functional team brought together different stakeholders in the process. The team's emphasis was on fixing the process, not blaming people. The team identified problems in the process (for example, it was discovered that five items represented more than half the backorders) and implemented changes.

The results? The stockroom has decreased backorders by 88 percent and achieved a 67 percent reduction in out-of-stock items. Lutheran Brotherhood's existing and prospective clients (external customers) are better served by having the materials they need to make a timely and well-informed decision. And Lutheran Brotherhood's sales force (internal customers) are now better served by a more efficient system that supports them with material when it is needed.

Letting go is a sometimes tough lesson to learn -- Sometimes, the hardest part of changing the way tasks are performed is finding common ground and sharing information. "The hardest part of the job at first was just getting people together," said Mary Gunsch, the leader of a Lutheran Brotherhood team. "Everyone had to let go of some part of the process."

Gunsch's team evaluated processes which affect the company's real estate holdings and account for much of the $14 billion in assets managed by the firm and its affiliated companies. The task of managing building and tenant improvements falls to the asset managers. It is the job of real estate accounting (another department) to track the dollars and cents.

The customers... Customers for the process of tracking and reporting building improvement costs were in both the accounting and property managers groups:

The accountants needed more accurate information than they were getting...

The property managers wanted information that could help them make better decisions on behalf of Lutheran Brotherhood and their tenants.

Surveying the customers... Customer research, including focus groups and questionnaires, uncovered some surprising attitudes and activities. The basic form used to identify and track costs was useful to people on one side of the process, but inadequate for those on the other side.

Examining and evaluating the processes... While breaking down and examining the entire process, it also was discovered that copies of the sometimes voluminous form were being made at virtually every step in the process - this cost in time and money was enormous.

Evaluating the processes led the real estate job cost team to several recommendations: now, two reports will be combined and a better approval process will be created.

The recommendation that may have the most impact - one which no member of the team could have imagined at the beginning of the process - will eliminate the current paper form and replace it with E-mail. Property managers will be trained in E-mail and given incentives to correctly and completely input the needed information.

The learning for the team and its leader... In the end, Gunsch's team succeeded because those involved joined in identifying the problems and finding the solution. "What started as a we versus them ended up becoming us, said Gunsch." This may not appear revolutionary, but to those who now have a more accurate and timely means of communication, it's one more step toward being able to provide world-class service.

Waiting, waiting for that first check - A team began in Fall 1992, found that 70 percent of the firm's customers waited more than IO days before they received their first income checks from a matured annuity, supplementary contract or single premium immediate annuity.

The income benefits team redesigned the process to reduce cycle time and eliminate several steps in the three product lines. As a result of the team's recommendations, 95 percent of Lutheran Brotherhood's customers now wait less than five days for their first income check.

Avoiding double payments and cutting cycle time - Another team discovered that two methods of premium payments occasionally resulted in policyholders double-paying a premium. Although the errors were rare - about 25 per month -- policyholders were ill-served and Lutheran Brotherhood had extra work to correct the duplicate payments. A survey revealed that part of the problem was caused by sales staff that sometimes set up incorrect payment plans. The team identified ways to better coordinate the process among different departments and recommended improved training for the field representatives. As a result, incidents of duplicate payments have dropped to an average of one per month.

Yet another team cut in half the time needed to make changes in life insurance contracts. Field representatives now have on-line access to check the status of the changes and immediately can identify any errors. Policyholders don't need to make follow-up phone calls to assure that the changes have been made.

Lessons learned

A significant lesson learned from the experience at Lutheran Brotherhood is that success with teams is built on some common elements.

Teams should be allowed to develop distinctive personalities and approaches to their issues.

Every team and each of the successes at Lutheran Brotherhood is different from the others. Success depended on recognizing that those who do the work know best where the problems are. The most successful teams are comprised of the front-line people who are charged with the day-to-day tasks under consideration and supported by mid-level management. Finally, teams need some independence. The organization can't baby-sit the teams.

Senior management must be invested in the process.

Evaluating and changing the ways in which work tasks are performed is a major corporate commitment, one that requires the investment of senior management. Lutheran Brotherhood's executive commitment is a good case study.

The leadership team's improvement effort... Senior executives at Lutheran Brotherhood were so taken with the teams' early successes that they took on their own projectcommunications with the company's board of directors. The leadership team evaluated the process of preparing the issues book that is compiled for each board meeting. In mapping the process, the senior executive team found that information for each book could come from as many as I00 Lutheran Brotherhood employees.

Research among boardmembers found overall satisfaction with the quality of communications between the board and the leadership team. However, boardmembers wanted to streamline the flow of information. In particular, they wanted information to be more succinct with priority issues clearly identified.

Boardmembers also were specific in the type of information that they found most useful. For example, board members asked for more data on emerging issues. And, board members wanted as much of the material in advance of the meetings, even if it meant sacrificing some timeliness.

The leadership team's project is accomplishing its goal of providing more useful information to the board. The project also is delivering on a second goal - giving Lutheran Brotherhood's leadership team direct experience in the linkage of training, improving the way in which things get done and measurable results. In doing so, it is reinforcing the already strong support that existed among senior executives in the program.

Middle management also must be invested in the process.

Earning the support of mid-level managers sometimes can be a challenge. Managers must be willing to give up some control to those on the front lines. In turn, though, the process offers mid-level managers an opportunity to talk to upper management about problems without running the risk of "looking bad" in front of supervisors.

Good results-focused training is essential.

Management support is only part of the equation for success, however. Even the best supported teams will fail if team members aren't well trained. Team members also need appropriate support (for example, ad hoc facilitators to manage problems that can arise) and they must feel empowered to challenge the status quo. Results-focused training should be a tool box; make all the tools available.

Lutheran Brotherhood's trained employees are beginning to recycle -- forming and joining second and third generation teams). Just as importantly, individuals are finding that the tools and skills gained from team participation are applicable to their everyday jobs. Almost to a person, those who have participated in a team say they never would go back to the old way of doing things.

Companies investing in training teams to improve work processes shouldn't be a slave to a single methodology. Create a tool box. Every team is given the same set of tools, but participants have the opportunity to select the ones that work best for them.

An outsider's perspective can be invaluable.

Starting and managing these programs from the inside often is difficult. An outside perspective can bring an objective look to long-entrenched practices. External consultants not only can bring their expertise, they bring their naivete. That is, they can ask "why ?" when insiders defend a process "just because that's the way it's always been done." In the best situations, internal and external managers of a program develop a synergy. The counsel-client relationship works best when both organizations are invested in the program's success. They form a strategic partnership in which each challenges the other.

Throughout the effort and throughout the organization, it is essential to maintain a focus of linking training and results.

Progress toward the goal, and the linkage with training, must be tracked so that employees and management know from day-to-day how they are doing. Measurement must be consistent so improvement in meeting the customers' needs can be charted and the training can be reinforced.

Looking ahead: the next challenge

Keeping training and teams fresh will be the next challenge for Lutheran Brotherhood's program. Its successes have raised expectations among participants and senior management. Those who have seen the results, though, have little doubt that it is here to stay at Lutheran Brotherhood.

"We are moving from a program to part of our culture," says Lutheran Brotherhood's executive vice president and chief financial officer Bruce Nicholson. "It is gaining champions at every level of the company. It has champions because it has succeeded. And when we do enough of this, well enough, it becomes ingrained. It becomes part of our culture. "That's what is happening today at Lutheran Brotherhood," says Nicholson.

About the Lutheran Brotherhood: The Lutheran Brotherhood is a Minneapolis-based fraternal benefit society with more than one million members. A Lutheran Brotherhood corporate goal is to become a world-class provider of financial services. Achieving that objective requires an evolution at Lutheran Brotherhood, not a revolution. The not-for-profit financial services company always has placed a high premium on the relationship with members. Still, the company recognized that it had to do a better job of meeting customer expecttions.

Mary S. Hendrix, FLMI, is manager of process improvement support at Lutheran Brotherhood. Lutheran Brotherhood and its affiliated companies have $14 billion in assets under management. It is a fraternal benefit society owned by its I million members.

Gary A. Foss is president of PRISM, Inc., a national management and organization effectiveness consulting firm. His 25 years of management and organization consulting experience is based within a broad spectrum of industries. Foss has extensive experience in planning and executing the realignment of organizations to fit new strategies and business directions. Foss holds a master's degree in education administration and a post graduate certificate in industrial relations. His BA is in psychology and sociology with a minor in business. He has been a presenter at national conferences on assessment centers, individual development and human resource planning.

Copyright Association for Quality and Participation Oct/Nov 1996
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