Efficiency Improvement:

Kaizen

Kaizen Best Practices:  Fidelity Investment

Practicing Kaizen at Fidelity Investments

Adapted from Gemba Kaizen: A Commonsense, Low-cost Approach to Management, Masaaki Imai

"We are the market leader because of this long-standing and comprehensive diligence."

Edward C. Johnson III, Chairman and CEO of Fidelity Investments

Kaizen Mindset

Continuous Improvement Firm (CIF): Kaizen, Lean Manufacturing, Suggestion Systems, TQM

 

At Fidelity Investments, Kaizen Involves

Yin-Yang of Customer Value Creation

 

STRIDES

A Problem-Solving Model

S Situation: "Where are we now?"... More

 

Fidelity's Process Redesign Model...

Process Measurement and Improvement (PMI)...

Key Elements of PMI...

Key Techniques of PMI...

Fidelity's Value Network...

Example of a Lean Value Chain

Employee Motivation...

Benchmarking...

4 Levels of Problem Solving...

Five-Why Method...

Continuous Improvement Culture...

About Fidelity Investments

Fidelity Investments is the largest and best-known mutual fund manager in the United States. Fidelity is also the leading provider of retirement plan services to corporations and the nation’s second-largest discount brokerage firm.

From Small Improvements To Great Results

 

A corporation's annual report contains the following message from the Chairman.

Kaizen "advocates gradualism. Revolutionary breakthroughs are rare. but everyone can make minor improvements in their work. If the effort to make these small improvements is sustained over time, great progress will result... Kaizen also suggests that every aspect of a business needs to be improved. No area is unessential. Each can be a competitive strength – or a competitive liability."

Top Management Commitment

Fidelity’s practice of Kaizen began with the company’s Chairman and CEO, Edward C. Johnson III. A long-time student of eastern philosophy and religion, Johnson became interested in Japanese management practices and discovered Kaizen.

Implementing Kaizen: 7 Conditions

“Kaizen means,” he said,“ that if you sweep the building you always want to try to do a better job – and in a shorter time.” Johnson applied the philosophy to his company as a basic way of doing business. He took every opportunity to communicate his belief in Kaizen to Fidelity employees to make it a corporate religion and create an environment of continuous improvement.

"Kaizen is a practical way for us to achieve our corporate goal," says Johnson. "The ideas is sometimes described as "making small, incremental improvements in all areas of the company over an extended period of time." That's part of it, but there's a good deal more.

Corporate Commitment

Fidelity's commitment to Kaizen is reflected in its performance management and compensation systems. Each fall, Fidelity companies establish business goals for the coming business year. These goals are tiered through the company's various divisions down to the individual manager level. Many of these goals are focused on improvements in existing products or processes. Progress towards goals is evaluated and adjusted on a monthly and quarterly basis.

Employee Ownership

Fidelity fundamentally believes that employees practice Kaizen most enthusiastically when they feel a deep sense of ownership in the work.

Fidelity fosters this feeling of ownership by dividing power in the company among small divisions (each called a company or a business unit) with aggressive entrepreneurial leadership.

Entrepreneurial Leader: 4 Attributes

Each of these Fidelity companies is responsible for its own management systems, its own strategies and activities – and its own results.

Results-based Leadership

Corporate Quality – a Kaizen Promotion Team

Fidelity defines quality as "How we organize, operate, evaluate, and continually improve all aspects of our business to maximize customer satisfaction and profitability over the long term."

8 Rules for Quality Management

Areas Targeted by TQM in Japan

Corporate management promotes Kaizen by a small staff of people who work full time to assure that employees hear the continuous improvement message on a regular basis. This department, which is called Corporate Quality, supports Fidelity's commitment to organizational learning.

The sharing of best practices happens in a number of ways. An informal network of Kaizen teachers from Fidelity's various business units – and collectively called the Quality Support Council – meets monthly to share information and experience with one another. This group has been responsible on an informal basis, for guiding many of the cross-corporate improvements at Fidelity, including the development of a problem-solving model called STRIDES. This model provides employees in every part of the corporation with a common language and process for implementing Kaizen. As stated in Fidelity's Models for Quality Improvement, STRIDES is the approach to use "where the problem is more complex."... More