Breakthrough Management Group International (BMGI) introduces €120 million new cost savings through performance excellence to Philips Sales & Marketing

21 April 2009 – Amsterdam – Selling and marketing consumer lifestyle products in the midst of a global recession is not easy – and to ensure its team was fully equipped for the challenge ahead, the Philips Consumer Lifestyle division partnered with Breakthrough Management Group International (BMGI) to develop a tailored Lean Six Sigma development programme for its high potential employees.  An internationally recognised leader in performance-improvement systems, BMGI worked with Phillips to implement bespoke DMAIC programme, which resulted in over €120 million of identified potential cost savings in the first year alone.  Specifically designed to highlight how process improvement and innovation could help Philips’ Consumer Lifestyle division realise its aggressive strategic objectives, the programme has delivered cost-savings and efficiency improvements across the organisation.   

Having previously relied on in-house resources for Lean Six Sigma, Philips’ Consumer Lifestyle needed to revisit its DMAIC curriculum in order to ensure its high potential marketing staff was engaging with the course content, and given the skills necessary to run data-driven marketing initiatives. Philips approached BMGI to develop and advance an integrated Lean Six Sigma approach that could be applied across business units and serve as the company’s global standard for performance excellence.  The move came at a critical time, as Philips wanted to upgrade its programme by integrating Lean, Six Sigma and Change Management principles to  provide practical, data driven solutions for the creative, ideas-based world of consumer marketing. 

To deliver on this challenge, BMGI worked with Phillips’ internal guidelines to develop an intensive Lean Six Sigma Blackbelt programme for the company’s high-potential sales and marketing staff.  In addition to the traditional classroom curriculum focusing on the DMAIC method, BMGI introduced a detailed, marketing-specific case study and series of real world challenges that have been incorporated into each of the sessions. 

Sanchay Roy, Head of Business Improvement inside the Philips Consumer Lifestyle division, comments:

“Looking ahead, we knew efficiency, continuous improvement, and customer-focus would be critical factors to continue growing the Consumer Lifestyle business in a downturn.   BMGI’s unique approach to consulting and problem solving has helped us to re-engage our high potential global sales and marketing staff with the principles of performance excellence. 

Within a marketing environment, Lean Six Sigma principles focus on the strategic use of data to eliminate waste and variation while delivering customer-centric solutions.  Thus both the case study and real-world challenges were built around students’ ability to analyse customer insight data at each stage of the marketing process, from idea-generation through to campaign launch and analysis.  Developed using a genuine Phillips’ product and real-time customer insight data, the case study demonstrated to students how the principles of Lean Six Sigma can increase the effectiveness and profitability of a new product launch through optimised packaging.

The bespoke packaging case study challenges students to implement the appropriate DMAIC principles at each stage of the new packaging development process, demonstrating that implementing Lean Six Sigma principles in a marketing context will sharpen decision-making, increase ROI, and keep staff customer-focused in the creative marketing process. 

Sanchay Roy, continues:

“Marketers aren’t taught to know a P value from a Z score, but by working with BMGI’s consultants, our high potential staff is now using data more strategically across the marketing department globally, resulting in increased efficiency and dramatic cost-savings.”

“BMGI’s commitment to partnering with us to develop company-specific case studies and experiential learning techniques has been particularly effective, and has given our sales and marketing team the new skills they needed to ensure they get the most out of customer data.”

Results

Since the first group of high-potential employees completed BMGI’s programme in March 2008, the organisation has identified over €120 million  in potential cost savings, generated from operationalising Lean Six Sigma principles into Philips’ marketing teams.  In addition, the new curriculum has been well-received by staff, who had previously expressed reservations that the Lean Six Sigma methodology was too manufacturing-focused, and not relevant to the creative decision-making culture prevalent amongst marketers. 

Greg Kinsey, European MD of BMGI, comments:

“The key to delivering breakthrough results together with our clients is to provide them with tailored solutions that address their specific challenges.  For Philips, this meant showing them that data needn’t be boring, but rather a tool for making better decisions and delivering winning marketing solutions in an increasingly competitive market.  Developing a progressive case study and a series of examples to demonstrate how the Lean Six Sigma methodology can save money and improve efficiency in a sales and marketing context was key to this programme’s success.”

Looking forward

Since developing and running Philips’ bespoke Lean Six Sigma curriculum, BMGI has taught five waves of students as Black Belts that have already delivered more than € 10 million in realised benefits.  Building on the   initial success, BMGI has expanded the scope of the engagement to address sales force effectiveness in emerging markets as well as advanced market intelligence. 

To meet the growing interest in DMAIC for marketers, Philips and BMGI have introduced “Smartistics,” a grassroots-level one-day course that delivers basic data analysis skills to the whole of Philips sales and marketing staff worldwide.  While not as in-depth as the Lean Six Sigma Blackbelt programme, Smartistics raises employees’ awareness of using data to make better informed marketing decisions, and using that data more strategically.

Internal communications highlighted the business impact of BMGI’s Blackbelt programme through the company intranet and various employee newsletters.  Philips continues to leverage BMGI technology solutions to support change agent development, project tracking and programme management.  The result has been an increased interest in the Lean Six Sigma development across Philips’ entire consumer lifestyle team, and a desire to take this even further.

Working with BMGI
As Philips’ success demonstrates, focused business improvement initiatives implemented using bespoke, experiential learning solutions are proven to reduce waste and variation while improving the bottom line.  That is why BMGI is laying down a €250,000 challenge to European businesses facing falling customer demand and declining credit availability.  The company is guaranteeing that it will identify €250,000 or more of business savings for companies with annual turnover of at least €500 million – and that BMGI will identify those savings through a no-fee, two-day business evaluation.  To learn more about this offer, please visit:  http://www.bmgi.eu/email/challenge/011b/