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 Lean Six Sigma in the
Financial Services Industry:
Germany
Professor Dr. Jürgen Moormann
Frankfurt School of Finance & Management (Germany)

Professor Dr. Jiju Antony

Heriot-Watt University (United Kingdom)

Professor Dr. Ayon Chakraborty

IIM Tiruchirappalli (India)

Dr. Yevgen Bogodistov

Frankfurt School of Finance & Management (Germany)

Professor Dr. Ronald J.M.M. Does,

University of Amsterdam (Netherlands)
 Table of contents

1. Introduction
2. Sample and method
3. Lean Six Sigma: Implementation and Dissemination
4. Lean Six Sigma Performance
5. Why Is It Problematic to Implement Lean Six Sigma?
6. Lean Six Sigma Success Factors
7. Goal Achievement
8. What Can/Should/Must You Do?

2
 Introduction
Dear friends and colleagues!
We are glad to present the first results of our
survey on Lean Six Sigma. We collected (actually
we are still collecting data from some countries,
so feel free to participate) data from many
countries, but this particular research report is
about financial service providers from Germany.
The reason is simple: at the moment Germany is
very good represented in our sample and, in the
financial services sector, Germany is one of the
leading countries to implement LSS. The results,
thus, might be of high value for practitioners all
over the world.
In this research report, we present some
interesting descriptive statistics as well as
introduce some of our research hypotheses. We
present data in a easy-to-read way and we try to
inspire you in the further cooperation with our
research team.
Why Lean Six Sigma?
Improving the quality of products and services in
order to attain customer loyalty, whilst at the
same time retaining control of costs is high on
the agenda of the firms’ executives. Conducting
initiatives to improve business processes,
therefore, is a major success factor for firms to
achieve or maintain their competitive advantage.
To do so, a number of concepts have been
introduced over the last decades ranging from
evolutionary approaches (e.g., Total Quality
Management, Kaizen, Theory of Constraints, Six
Sigma, Lean Thinking) to rather radical
approaches such as Business Process
Reengineering and Business. This (incomplete)
list of methods and tools shows, on the one
hand, the necessity to improve organizational
processes and routines. On the other hand, one
can see that there is still no best methodology
and some of them are still being improved, since
all of them carry certain insufficiencies.
One of such approaches is the Lean Six Sigma
(LSS) methodology – a combination of Lean
Management and the Six Sigma concept. It has
become one of the globally most popular
approaches to increase efficiency of business
processes and organizational routines and to
reduce costs.
The financial services industry has adopted LSS
too. For instance, this industry is receptive for
OPEX initiatives. The pressure on the cost side is
high because of the long-lasting zero interest
policy of the ECB. Consequently, it becomes
extremely challenging to generate income – at
least in Europe. The processing of huge numbers
of transactions per day represent a perfect
application field for LSS. In addition, financial
services represent a major part of the economy
worldwide. The sector thus serves as a
transmission belt for other sectors. For these
reasons we chose this industry to look into.
Independent from industry, size, or location,
continuous improvement of the quality of
business processes in firms is a sine qua non.
Emerging new technologies and regulations, fast
changing customer requirements, and emerging
supplier networks are just a few examples why
companies have to dynamically adapt their
processes and even business models. The growth
of importance of operational excellence
programs by top management reflects the need
to cope with competitive circumstances. By this
degree of demand, Lean Six Sigma became
popular for both practitioners and academics.
This report shows some new insights on Lean Six
Sigma in the financial services sector. We hope,
you will appreciate this brief report, and we are
always open to your critique and ideas!
Sincerely,
Your researchers’ team
3
 Sample and Method
In order to test the LSS capability in the free text field, e.g. project manager, process
financial services sector, we started collecting manager, team manager etc.
data in Germany. We clearly outlined that we n/a
look exclusively for experts who apply or have
applied LSS in their organizations – thus having Gender Female
a certificate was not sufficient. We excluded distribution Male
professional consultants from participation in
the survey, since we wanted to survey real
business effects of Lean Six Sigma in the
financial sphere.
The final sample contained exactly 200 C-Level 10
questionnaires, which remained after all Senior Manager 49
withdrawals and data deleted through our
team due to a number of missing values. Middle Manager 30
Following groups appeared in our sample: 83 Employee 98
participants working in the banking sphere, 72
Other 13
in the insurance business, and 49 indicated
“other”. The latter participants mentioned as
their background for example, “payment We also asked about the level of LSS education:
provider”, “corporate payment”, “crediting 16 participants were Master Black Belts, 52
services” etc. None from the “other” group Black Belts, 98 Green Belts, 6 Yellow Belts, and
indicated a non-financial enterprise. 25 selected the “other” category (e.g., “in
certification process”, “Executive Green Belt”,
Banking 83 “Only theory part of…”). Our participants
obtained roles of LSS Project Champions (13
Insurance 72 participants), LSS Deployment Champions (9
Other 49
participants), LSS Program Coordinators (23
participants), LSS Project Leaders (98
A number of 12 participants were from small participants), LSS Project Members (31
financial service providers (less than 250 participants), and 8 participants selected
employees), 17 were from firms between more “other”.
than 250 up to 500 employees, 55 were from Master Black Belt 16
firms with more than 500 up to 2,000
employees, 22 from firms with more than 2,000 Black Belt 52
up to 10,000 employees, and 94 from firms with Green Belt 98
more than 10,000 employees.
Yellow Belt 6
<250 12
Other 25
250 – 500 17
5,001 – 2,000 55 We think that our sample is very interesting and
2,000 – 10,000 22 powerful due to all roles covered and a high
number of participants with a high degree of
>10,000 94
organizational responsibility (high number of
121 participants were male, 73 were female, 6 participants in managerial positions). To the
did not indicate their gender; the mean age was best of our knowledge, this is the largest data
42 years (SD = 8.8); 10 were C-level managers, base which has been collected for academic
49 senior managers, 30 indicated that they are reasons in the field of LSS in financial services
associate or middle managers, 98 obtained no up to now.
managerial positions. The rest selected the
“other” option and added their position as a
4
 Lean Six Sigma: Implementation and Dissemination
LSS stems from production industry. The Did you know that? The level of LSS
financial services industry relies on different implementation has statistically significant
processes and works rather with services than impact on:
with concrete goods. Nevertheless, banks, • Internal customers‘ satisfaction*
insurance companies, and other financial • Delivering value to your internal customers+
services organizations (such as asset
management companies, leasing companies, • Delivering what your internal customers
credit cards organizations, and so forth) are want*
also under heavy competitive pressure. • Willingness to cooperate in further LSS
Fintechs, insurtechs, regtechs and other projects*
companies of new types are entering the • Growth of the number of LSS projects*
market and “cherrypicking” the most valuable • Growth of scope of the LSS initiative*
parts of the incumbent’s value chain. The • Acquiring/training new LSS experts n.s.
financial crisis in 2007-2009 caused higher
expectations from regulators which, in many • Penetration of LSS knowledge into other
cases, forces companies from the financial organizational units**
sphere to rethink their entire business model. • Cost-benefit ratio of LSS initiative***
To cope with these challenges, it is of utmost • Reaching financial projects goals***
importance to permanently improve the • Full-time equivalent (FTE) needed for the
company’s business processes in terms of improved processes**
efficiency and effectiveness. For this reason • Cycle time of the improved processes*
almost all banks, insurers, and other financial
institutions run a range of initiatives to achieve Note: *** - p < .001, ** - p < .005, * - p < .05, + - p < .1,
operational excellence (these programs are n.s. – not significant
often called OPEX programs). Adopting the
path of firms from other sectors, companies in Trends of LSS dissemination in financial services
the financial services field foremost stick fully companies:
to the LSS methodology or at least a variety of 5-point Likert-scale:
instruments from the LSS toolbox. 1 – strongly decreasing Average
3 – constant
The following figure shows in how much LSS is your firm
5 – strongly increasing
implemented and how deep it disseminated in
financial service companies. Management
attention for
LSS
Level of LSS implementation 5
LSS traction
your firm, % 37 due to 4
N of projects
process
innovation 3
Average, % 45
2

0% 50% 100% 1
LSS usage N of newly
due to trained belts
Implemented digitalization p.a.

Not yet
Note: The difference is
statistically significant at
LSS
p < .05 level! N of business importance
units using for our
LSS company's
success

5
 Lean Six Sigma Performance
Having people with LSS certificates might not
be sufficient for a firm to achieve sustainable
results. Nevertheless, our research in progress
shows that a routinization of LSS activities, i.e.
regular application of LSS tools until an
automatism is achieved, has a significant
impact on the achievement of organizational
goals.
Routinization is a key for the development of a
capability. Put differently, “knowing what to do
with a resource” (capability) is of more
importance than simply possessing a resource
(e.g., number of LSS trained experts).
A capability is a high-level organizational
routine or collection of routines which are
repetitive patterns of interdependent actions,
where multiple actors are involved.
Cycle time of the improved processes+
Full-time equivalent (FTE) needed for the
improved processes
Reaching financial projects goals**
Important is also the view on routines as
responses to environmental stimuli. An
environmental change can cause an unlimited
number of reactions of a firm. If a firm develops
certain routines, however, the routines are
activated and executed – thus simplifying a
firm’s decision making. Indeed, simply having a
number of employees with LSS certificates
does not mean that an environmental change
will activate those people. In contrast, a trained
team, regularly applying the LSS methodology
would be the first group to be addressed by a
firm’s management. Therefore, a LSS capability
would save time and simplify the managerial
choice.
5-point Likert-scale
now as compared to
1 Year ago:
1 – much worse
3 – the same
5 – much better

Cost-benefit ratio of LSS initiative

Penetration of LSS knowledge into other

organizational units+

Acquiring/training new LSS experts

your firm
Growth of scope of the LSS initiative Average

Growth of the number of LSS projects

Willingness to cooperate in further LSS

projects+
Delivering what your internal customers
want*
Delivering value to your internal
customers*

Internal customers‘ satisfaction***

1 2 3 4 5

Note: The difference is statistically significant at * - p < .05, + - p < .1 level

6
 Why Is It Problematic to Implement Lean Six Sigma?
As we all know, there might be several reasons 1. Many project which run simultaneously and
for not implementing the LSS methodology. We cause ongoing changes.
proposed to our participants a set of reasons 2. A missing strategic meaning: LSS is used as
and asked to rate them. We also asked to one of many options.
propose other reasons which were not 3. A strong link to statistics makes LSS out-of-
mentioned in the list. First, we received 5 new favor.
propositions. Although they are not
overlapping and have only one vote, we would 4. The management seeks productivity and
like to list them here. Maybe it is something you new customers, but forgets about the
did not think of but makes your company less quality. We have many products, but
successful? nobody wants to buy them.
Added obstacles on the way of Lean Six Sigma 5. Keeping IT from choosing analytics
implementation: software.
Apart from the mentioned hindrances, we list a
table with a rank of most popular obstacles for
LSS implementation below.
5-point Likert-scale:
Dealing with people instead of machines in 1 – very weak
manufacturing companies
3 – partly
Company culture is not ready to change 5 – very strong

Other concepts are being applied in process

improvement

Our lack of resources for applying this methodology

Our lack of customer-oriented thinking

Methodology is “new wine in old bottles”

Methodology is only applicable in production

settings
your firm
Difficulty in collecting data***
Average
Too complex to learn and train

Too complex to use+

Insufficient support from top management

High cost of training

Very time-consuming

Unknown to us

1 2 3 4 5
Note: The difference is statistically significant at * - p < .05 level

7
 Lean Six Sigma Success Factors
In our study, we asked the participants to
indicate success factors for high LSS
performance. We proposed a list of items and
the participants had to rate them on their
importance. We also asked to provide factors
which were not in the list but were important
for their companies. Interestingly, there were
many options added and we list some of them:
1. Proactive, convincing, and empathetic LSS
specialists
2. Speed of implementation and prioritization
of LSS tasks
3. Quality of HR resources, esp. of project
leaders
4. Binding character of LSS projects
5. Sufficiency of IT capacities
6. Stakeholder engagement
7. Motivation and commitment at all levels
8. Acceptance of the project leader position
as a career path
9. Focus on outputs at each phase of a LSS
project
10. Routinization of the application of the LSS
methodology
5-point Likert-scale:
1 – least important
3 – average
5 – most important
As one can see, the list of success factors is far
from being complete. For instance, our list of 18
success factors was also developed by scholars
in cooperation with practitioners, but more
necessary items were indicated during the data
collection phase. It brings us to the conclusion
of a multidimensionality of LSS.
In our research, we therefore proposed the
notion of a LSS capability – a multilevel concept
which sheds light on why some Lean Six Sigma
initiatives become successful, whereas the
others don’t.
You can find below the most important five
success factors as indicated by our participants.
The full items list may appear in our subsequent
academic publications. Moreover, we plan the
analysis of the success factors: which factors
are more important by which conditions? Which
factors provide a greater impact on LSS project
outcomes? Which environmental triggers make
certain factors leading to success? These and
other questions are being answered in our
study in progress. So, keep following our
research!
Average your firm
Sufficient employee
capacity for project
work**
5

Clear awareness of 3 Top management

the need for end-to- initiation and
end process 2 support of Lean Six
thinking** Sigma projects***
1

Note: The difference is Existing company

statistically significant at Necessity for
culture for
process thinking at
*** - p < .001 , ** - p < continuous
management level
.005,level improvement**

8
 Goal Achievement
Finally, we present some information on goal
achievement. It is all about the economic result,
isn’t it? So we asked our participants to
estimate, in how much Lean Six Sigma projects
were successful. We proposed a scale where 0
mentioned “no success at all”, 100% mentioned
“achieved as planned” and 200% mentioned
“twice as was initially expected or more”. The
participants used a slider, i.e. they could be
pretty precise in their estimation. You can find
below the preliminary results.
Please note that these results are only the first
descriptive part of our findings. After the study
is finished, we expect to find more interesting
insights, such as the predictors for goal
achievement, moderators in this relationship,
and other interesting results. Keep tracking our
research and contact us for further details!

5-point Likert-scale:
Change of business culture 0% – no achievement
100% – as planned
Developing customer-focused end-to-end 200% – twice as planned +
processes

Creating new, innovative processes

Digitalizing our processes

Fact-based process organisation

Improvement in product development

time
your firm
Improvement in cycle times* Average

Increase in productivity+

Increase in quality*

Increase in revenue/yield

Improvement of process costs*

Increase in customer satisfaction*

0 50 100

Note: The difference is statistically significant at * - p < .05, + - p < .1 level

9
 What Can/Should/Must You Do?
At the end of this report, we would like to
stress two notions. First, we recommend you to
pay attention to the graphs above, especially to
those, which show statistically significant
differences. These data show that you are
indeed better (or worse) than the average in
the financial services sphere. If you are better,
try to strengthen your capability. If you are
better than the others, statistically significantly
better, then maybe we have found first facets
of your core competence leading to a
competitive advantage. If you manage to
develop a capability, your advantage might
become sustained. We recommend you to read
our upcoming academic paper on LSS
capability.
If you are below than the average, we strongly
recommend to analyze why. Is it a reason or a
consequence? Can you make it better? How can
you do it? You need deeper understanding of
impacted processes and routines, but also of
processes and routines anteceding the
impacted ones. We recommend you to use
information from this report and our academic
works to develop a plan of action. Our
experience shows that those, who fight, win.
Those, who ignore, lose. We would appreciate
if you would allow us to academically assist you
View publication stats
in this process.
We thank you for taking time and participating
in our study! We very much appreciate your
help. Moreover, your participation contributed
to academic research and, thus, made our
business world a little bit better. Hopefully.
As a research team, we keep working on the
data analysis. We hope to provide more insights
about the state of the art of Lean Six Sigma. We
also keep collecting data for a cross-cultural
study and ask you to invite more participants.
As you have seen, we not only collect data, but
also propose a research report: with a short
overview of most important data for single
participants or with a particular information for
those, who organized a representative sub-
sample from one company.
We also would like to announce our new
studies on process innovation, psychological
factors influencing organizational capabilities,
and new aspects of managerial decision
making. If you like science, if you liked this
report, feel free to contact us! We can always
find an interesting topic for a conversation!
We wish you all the best!
10