The work that we do in this particular part of the Wachovia Corporation is to look across the enterprise at the multiple portfolios that we have in 10 strategic business investment reviews units; each with their own P&L, each with the delivery model for driving success and valuing shareholder return. So a couple of years ago we began to do some comparisons with the amount of money that we were investing in the initiatives; whether they be Lean or Six Sigma, Process Improvement, Project Management, whatever that may be, we looked across multiple initiatives, and when we compared against the industry we found that we were spending up to two-thirds more in initiatives than other major corporations of the same size. The return on investment it was not as optimal as it could be.
So we began down a path to really optimize our capital investment portfolio. This was a bit of a challenge, given that each of the 10 separate strategic business units had their own model for how they wanted to look at the portfolio, the initiatives, the process improvement, the programs, the projects, whatever they may be, and make their own decisions. It was truly a collaborative effort to gain the buy in and the support and begin to look at a process that was governance related, but more of an influence model in how we were going to, as a financial institution, really drive home the need for better investment and the right projects, the right initiatives.
Think about for a moment how many of you have pet projects and things that you would really like to see up and running, you would like to have unlimited resources to get the job done. How many of you have unlimited resources to get the job done? I do not know about you but for us it’s a challenge. We always have more heart and more energy than we have people or time to get the work done.
We really started to look at what would be a value capture. How could we begin to have kind of a pull mentality as opposed to a push strategy.
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]This really falls into four buckets of categories that we want to focus on. One was spend effectiveness. We wanted to reduce our capital commitment substantially while improving return on capital deployed, and we also wanted to better align those investments.
Across these 10 strategic business units there were things that were done that made sense for a particular business unit. Perhaps we could create a forum or a community of practice where there was opportunity to look across the enterprise and ask the question, “Does it make sense for several of these business units to engage with each other and collaborate so that we get more synergy, more effectiveness and more efficiency out of a particular initiative?”
That also meant working with our program offices to look at the portfolios-the portfolios of Six Sigma initiatives, Lean initiatives that were taking place, Project initiatives that were taking place-and begin to balance the execution capacity and really look at the risk management. What we found within many of these initiatives is some of the cost that was not being optimized and we were not managing the risk in the business as well as we could.