Replicating what works in ServiceMaster

Imagine trying to standardize business operations for an organization that services six million homes every day. This was the challenge for ServiceMaster, which provides homeowners with numerous services including lawn care, plumbing, heating and air conditioning, pest control, disaster reporting and warranty services. ServiceMaster's popular brands include TruGreen, Terminix, Merry Maids, American Residential Services (ARS) and American Home Shield, to name a few.

With more than 700 company-owned branches and several thousand franchise locations across the United States, ServiceMaster faced the large task of creating and implementing a strategy to replicate internal best practices. As noted by John Biedry, senior vice president of continuous improvement and Six Sigma, "We really had to roll up our sleeves and get in the trenches. Implementing change and transferring best practices involves more than sending out an e-mail; it is actually more like hand-to-hand combat."

Drawing from APQC's 2004 benchmarking report The Facilitated Transfer of Best Practices and insight from ServiceMaster, this article details the key features that enable the company to replicate what works: Six Sigma integration, resource commitment, a change management and communication strategy and robust measurement.

A Need to Standardize and Improve Operations

In early 2000, there was limited standardization among ServiceMaster locations and branches. Manuals, processes, procedures and day-to-day practices varied greatly across the United States. Often, said Biedry, practices were passed down as folklore, and the phrase "if you've seen one branch, you've seen one branch" summarized the differences. Because many of ServiceMaster's locations often operated as small businesses led by highly empowered branch managers, a lack of continuity was not surprising. The differences among business units continued to be fueled by an entrepreneurial spirit, a number of acquisitions in the 1990s and rapid corporate growth.

When Jonathan Ward became CEO in 2001, the company was ready for change. On the economic front, earnings had flattened out and growth had slowed. There was a general sentiment, said Biedry, that the strong spirit of local innovation and ownership that contributed to growth in years past needed to be re-evaluated. Accordingly, Ward challenged the organization to improve quality throughout.

In response, the organization implemented the measurement-focused Six Sigma approach to improve quality and standardize operations throughout the entire organization. The ServiceMaster Six Sigma approach uses the traditional DMAIC (define, measure, analyze, improve and control) process, but follows the final step with an "R" for best practices replication. Within this added step, ServiceMaster details how to deliver and document a best practice with clearly defined activities.

To ensure best practices from Six Sigma efforts are replicated, ServiceMaster provides resources and dedicated personnel for replication, promotes powerful change management and communication strategies and measures progress from replicating those best practices. These efforts, detailed below, have helped make ServiceMaster's Six Sigma initiative a success. "We are now completing our third year of implementing Six Sigma, and it is implemented throughout the entire organization," said Biedry. "There are not a lot of corporations that deploy Six Sigma properly and then stick with it for over three years."

Resources and Roles at ServiceMaster

Dedicated, full time personnel support the replication process at the corporate and business unit levels. Each business unit, for example, has a self-sustaining Six Sigma team that consists of a full-time deployment champion and a Master Black Belt. A deployment champion is an experienced employee that has been in the business for several years, has an established network of contacts, and plays a key role in preparing the organization for the introduction of best practices by the company's Six Sigma team. A Master Black Belt takes an active role in projects by using Six Sigma tools to uncover best practices, coach the project team and assist with implementation. With respect to best practices replication, a Master Black Belt serves as a process gatekeeper and ensures uniformity and delivery. Currently, ServiceMaster has 10 Master Black Belts.

Approximately 40 full-time Black Belts act as project leaders and have a number of responsibilities, including leading best practices creation and replication efforts, monitoring compliance and measuring results. Clearly, a key to success is having a full-time Black Belt involved in best practices replication. Biedry said, "Using Black Belts to go back to a site and help them stay on course is critical to best practices transfer."

A number of Green Belts and Yellow Belts also support the best practices replication. Yellow Belts are traditionally regional and branch leaders, that will "make or break" the success of the project, said Biedry. These representatives are also critical because they teach best practices within their operating divisions. Green Belts are local experts that receive substantially more training than Yellow Belts and participate in at least one Six Sigma project, from start-up to conclusion.

According to Biedry, providing full-time resources has been one of the keys to successful best practices replication at ServiceMaster. "You can't underestimate the importance of full-time resources to drive the effort. You need to work directly with folks at all levels of the business to get this done. This is how the business stays focused and implements real change."

In the near future, ServiceMaster plans to devote even more resources to the effort. When asked what is on the horizon, Biedry mentioned there is an effort underway to train additional Green Belts that will enable people to work on issues that are important to the branch and region. Some regions, for example, have specific issues that are affected by varying climates, markets, or resources. The addition of Green Belt resources to address these issues will promote process improvements at every level. "There is a treasure chest of great ideas that are sitting out there, and giving regions and branches a process to address local issues will be an enormous tool," said Biedry.

Communication and Change Management

Culturally, ServiceMaster faced a number of barriers as it rolled out Six Sigma. In the beginning, Six Sigma was treated as "the flavor of the month" initiative. "Most people thought if they waited it out long enough, [the initiative] would go away," said Biedry. "Our biggest challenge was to communicate that not only was Six Sigma here to stay, but also it was going to be driven into the DNA of our culture."

But because ServiceMaster is a diverse company in terms of its services, developing a global communication strategy required some innovative thinking. "We were aware that business unit leaders communicate to the field differently—some prefer e-mail, others prefer newsletters or meetings," said Bridget Glavaz, ServiceMaster's vice president of corporate communications. "This was an opportunity as well as a challenge. Our approach focuses on providing tools and strategies that enable business unit leaders to share information in a way that works for them." In order to replicate Six Sigma best practices, ServiceMaster developed a comprehensive communication strategy geared toward education and deployment of the effort. The goal was to "create a cost-effective communication structure that provided tools and strategies to help others learn about and deploy Six Sigma across the enterprise," said Glavaz. Replication toolkits and success stories were deployed through business units' Web sites and through standardized communication methods across the organization. The toolkit, sent to 250 executives, provided educational tools on Six Sigma and the corporate initiative. Specifically, the toolkit contained: general knowledge on Six Sigma, FAQs, a glossary of terms, a guidebook, a summary of roles and responsibilities, samples, a video and a ready-made "Six Sigma 101" presentation. A communications resource was responsible for calling each recipient to make sure the toolkit was received, answer questions and gather feedback on its overall usefulness.

"Feedback indicated that the ‘101' presentation was easy to use and provided a high-level overview that could easily be shared at across business units," said Glavaz. Overall, she said, the toolkit helped create an awareness of the effort throughout the enterprise.

Awareness of the initiative also increased by sharing success stories. In 2003 the corporate communication function initiated a coordinated effort to disseminate success stories to all business units. "Six Sigma success stories" provide a snapshot of a Six Sigma project, the problem addressed, data analyzed, the implemented solution, and the bottom line savings to the organization. Each month, a success story from a different business unit, such as Terminix or Merry Maids, is shared via business unit intranet sites and corporate e-mail. "In addition to creating an awareness on what is happening in Six Sigma, using real examples helps form those ‘ah ha' moments for individuals in different business units," said Glavaz. "They provide a common thread for sharing information and people actually look forward to them."

ServiceMaster also has regular meetings to discuss best practices. For example, each week the senior vice president of continuous improvement and Six Sigma hosts a conference call with Master Black Belts, Black Belts and deployment champions. This enables key Six Sigma resources to share at a high level what is happening in each business unit. In turn, the meeting enables executives to tap into what is happening across the enterprise. As a direct result of these calls, said Glavaz, "we realized people actually wanted more information on what was happening with Six Sigma. That is how success stories came to life.'

Within each business unit, a Six Sigma team reviews monthly status reports that detail a variety of aspects related to each project's status. For instance, the Six Sigma team will review the number of locations slated for replication, locations replicated, year-to-date savings, core metric baselines, etc. Each business unit uses the same monthly status report template. In addition, business unit teams hold regular conference calls to review project reports and discuss what is working well and identify opportunities for improvements. Standardized and consistent communication has helped the organization stay on track and identify additional opportunities, said Glavaz.

In 2004 ServiceMaster held its first Six Sigma conference. More than 70 employees attended, including all of ServiceMaster's deployment champions, Master Black Belts and Black Belts and other Six Sigma team members who have played key roles in completing assignments and projects. The conference also involved awards for most innovative project, most customer focused projects, etc. "Getting everyone under one roof to share lessons learned, challenges, [and] success stories and network was a strong experience," said Glavaz. "Not only is it a good knowledge-sharing forum, but it sends a powerful message across the enterprise regarding our commitment."

Workshops are also used as catalyst to replicate best practices at local levels. Workshops are generally one-day sessions that are led by Black Belts at company sites. ServiceMaster's American Residential Services, for instance, used workshops to help drive down price discounting by standardizing its approach. Using data customized for each location, the Six Sigma team spent considerable time demonstrating the potential savings for each branch. Because each branch had its own specific cultural issues, 20 percent of the solution remained flexible to enable customization on things that were important to individual branches. This flexible approach to best practices replication helped foster positive cultural change while reducing price discounting by 70 percent in the first year of implementation.

Measures

Measures at corporate and business unit levels are the final yet critical element to ServiceMaster's best practices replication efforts.

How successful has ServiceMaster been since implementing the Six Sigma approach to replicate best practices? As of July 2004, the organization estimates its realized more than $50 million in savings. Considering the initial investment of $12 million in each of the first two years of the Six Sigma effort, the effort has more than paid for itself. Moreover, in the first year, there were approximately 3,500 replications, and as of December 2003, there have been approximately 11,000.

Being able to measure the number of replications and savings as a result of the effort is crucial to continued success and funding. Because of Six Sigma's success in streamlining processes and financial accomplishments, the organization is now able to focus more aggressively on projects that have a long-term payback.

Measuring results at the project and business unit level is equally important. Biedry said, "We are like most companies: what gets measured gets managed."

Each business unit is required to report on the status of key projects and implementation. In addition, additional metrics such as cost savings are tracked over time and rolled up to each business. This enables the corporation to keep track of progress over time.

Summary

Through its Six Sigma efforts, ServiceMaster has successfully replicated best practices. For instance, TruGeen, ServiceMaster's residential and commercial landscaping and lawn care services provider, used the replication step to reduce the amount of time specialists spent in branches. This translated into a reduction in labor expenses and increased time with customers. And by adopting a company-wide approach, ServiceMaster continues to yield financial benefits and quality improvements that Biedry predicts will lead to the realization of its overall objectives. What does the future hold for ServiceMaster? Moving forward, Glavaz said ServiceMaster plans to be the leader that sets the standard in delivering to the customer. "We are on the right track," said Biedry. "In the future, I see a continued focus on the critical aspects of our business, more resources and continuing to engage more people in the organization."