The Leadership Files: Steven Degnan-Schmidt, Director and Practice Leader for Management Consulting Services at Allstate Insurance

Six Sigma & Process Excellence IQ brings you the top Process Improvement executives to watch out for in 2011. In this Q&A, we profile Steven Degnan-Schmidt, director and practice leader for Management Consulting Services at Allstate Insurance Company.

Interview by Helen Winsor

Please provide a brief background of your Process Improvement program.

Allstate embarked on its Six Sigma journey in 2001 within a single business unit. Based on early successes, we grew our organizational adoption to include all enterprise functions by 2006. Our structure was based on centralized ownership of training and coaching with decentralized Six Sigma resources owned by the business partners. By 2008 we had more than 350 Black Belts (30 percent holding internal and/or external certification), had completed more than 450 projects and delivered in excess of $200m in benefits.

In 2009 we performed an organizational assessment of our services and delivery to ensure the model continued to meet the long-term needs of the company. From this work, we identifed complimentary frameworks (i.e., Business Process Management, Organizational Design, Business Transformation) being deployed separately that would better serve the company in an integrated delivery framework. This integration is currently under way.

What are the top three components to your overall business strategy in 2011?

1. To navigate quickly through the organization providing an enterprise view of process from the customers’ perspective
2. To deliver high-quality work
3. To deliver significant cost savings while developing knowledge capital

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Why is the Process Improvement program an important focus for your business and what role does it play in the business strategy?

Our program is an enabler to the local and enterprise business strategies. Our methodologies help business partners frame roadmaps for success. When roadmaps are in place, we help assess and evaluate organizational frameworks and roles from the perspective of people, process and technology. After change is implemented, we help to build the measurement systems and control analytics.

What is your stance on the different Process Improvement approaches and what approach do you favor?

Process Improvement approaches or frameworks should not be the driver of how an organization works toward process optimization, flawless execution or expense savings. The problem being solved should drive which set or combination of tools brings the best result in meeting the customer or business partner’s needs. All too often, practitioners chase one set of tools over the other as if the tools were an answer in and of themselves. Like a carpenter, we should bring a full box of tools and leverage the right one for the right task.

What has your organization done to adapt and evolve the Process Improvement program in line with the current economic and business climate?

Our program was completely reinvented in 2009 and has continued to evolve into 2010. We existed for eight years as a centralized Six Sigma training and coaching organization driving a 25x1 benefit return with 75 new Black Belts trained each year. However, as the economy forced staffing reductions, training needs and time availability started to diminish. This forced us to rebuild our program into one that both trained and led work. From there, we began to incorporate other consulting organizations into a single entity to provide a cost-effective alternative to external consulting firms costing four and five times the hourly rate.

If you had to start your program back again from scratch, what would you do differently?

We should have made our organizational change sooner than 2009. Business needs for our services were starting to change as early as 2007 and we failed to leverage effective Voice of the Customer techniques in order to respond in a timely manner. Other than that, I’d make no other changes.

How did you develop into this role and what steps did you take to get there?

My work background was operations, marketing and sales, before joining the Six Sigma practice. Becoming a Black Belt was not the goal of my assignment — they leveraged my skills in sales and marketing to help grow the deployment of the methodology in the enterprise. As I participated in Black Belt training and did my project work on the road to certification, my knowledge of how Six Sigma can empower a leader to achieve better results, make better decisions and sustain change grew. The ability to articulate the value of process optimization in clear business terms was my means of success.

What challenges did you have to face as a change leader and how did you overcome them?

The biggest challenge we faced was leaders already thought they had all the answers. As such, gaining their alignment to try a new, fact-based approach was frequently met with resistance. The best method for overcoming these objectives was primarily persistence.