Runner-up application for "Excellence in culture creation"- SSOWEEK North America 2012

SHARED SERVICES & OUTSOURCING NETWORK

Shared Services & Outsourcing Excellence Awards 2012

“Excellence In Culture Creation 2012”

RUNNER UP: JCpenney

The winning application for “Excellence In Culture Creation 2012”

http://ssonetwork.com/awards.aspx 1

General Information Your Contact Details

Company Name

jcpenney

Your Name

Natalie C Black

Your Title

Manager

Your Email Address

[email protected]

Telephone Number

801-350-2221

Select the Industry which best describes your business (Please select One)

Fast Moving Consumer Goods

X Retail Food and Beverage Financial Services Public Sector (Government & Non Profit) Pharmaceuticals & Healthcare Manufacturing Technology, Media & Telecommunications Other – Please Specify

Your Shared Services Organization (SSO)

Head Office of SSO – City/Country Plano, Texas USA

Number of Staff (Full Time Equivalents

435

Date Shared Service Operations Started (MM/DD/YY)

1958

Awards Previously Received for Shared Services and related Awards

SSON: Winner Excellence in Culture Creation 2011, Runner Up Excellence in People and Communications 2011

http://bit.ly/xJlHjN


mailto:[email protected]



Shared Service Centers – Geographic Location

This application represents Shared Service Centers (SSC) located in the following geographic area:

Asia/Pacific Europe Latin/South America Middle-East/Africa

X North America/Canada

Specific Country/Countries USA

*** Entries will be accepted for any regional award program on the proviso that either your

SSO and/or majority of recipients of your services are based in that region ***

Customer Information – Scope of SSC / BPO

For all the business units served by the SSC applying for this award:

Number of business units served

Number of Employees

Number of Countries you are Servicing

All: 1108 stores, nationwide supply chain network, home office 154,000

1





What is the strategic growth or transition plan of your SSC for the future? For Example Expansion of services to more locations/introduction of new services/outsourcing existing services etc.

Creating value for the enterprise through standardization, continuous improvement and centralization of multi-functional business services.

What Services do you provide in your SSC today?

1. Centralized

Service Offering 2.

Is this process Outsourced?

3 Fully Automated?

(F) Accounts Payable Y N N Accounts Receivable N N Auditing N N Benefits and Rewards Administration N N Budgeting N N Business Performance Analysis N N Business Performance Reporting N N Call Centers: Employees, Suppliers, Customers Y N N Call Centers: IT Help Desk N N Collections Y N N Cost Accounting N N Credit Y N N Customer Billing N N Employee Data Management N N External Reporting N N Facilities and Real Estate N N Fixed Assets Y N N Forecasting N N General Accounting (G/L, I/Co. Inventory) Y N N Management Reporting N N Payroll Y N N Planning N N Purchase Order Processing N N Staffing Services N N Supplier Management Y N N Tax Services N N Time & Attendance Y N N Travel Expense Y N N Treasury N N Workforce Development N N Other: *Partially

outsourced in IT **Some processes mostly automated

Other: Other:





Affidavit

Do you grant IQPC the right to publish key metrics and promote Winners of Awards?

Yes, we grant IQPC the right to publish key metrics if we become finalists X Yes, should we win, we grant IQPC the right to promote us as award winners

No, we do not grant IQPC permission to publish key metrics

Do you agree to participate in a presentation/discussion outlining your SSO’s achievement should you win?

X Yes, we will participate

No, we will not participate





Excellence In Culture Creation

Strategy

Your Story

Describe the background on why you wanted or needed to make this change or improvement in the culture of your organization or for creating a new culture

• What culture did you start off with? – Please describe what you were trying to change or create – what

was your vision? • What was the business objective and/or the reason for changing or creating a culture? • Were you creating or changing culture in your Shared Services organization or within the wider business

– or both? • Please specifically describe and quantify the benefit that you were trying to achieve through this culture

creation, whether cost savings, efficiency improvement, increase in Customer or Employee satisfaction etc.

(Maximum 400 words)

In 2009 we reorganized our shared services center, something that hadn’t been done in over twenty years. Although a necessary jump start to change, it resulted in a lot of confusion and low morale. We identified major cultural obstacles:

• Not Fully Capitalizing on Talented Hourly Staff • Overworked Managers • Career Path Concerns • Centralized but Non-Standardized Processes • Location/Permanency Concerns • Afterthought in Home Office Planning • Talent gaps • No vision, strategy or direction

In our efforts to become the Top of Mind, First Choice Provider for Value Added Shared Services for jcpenney, we defined our future state:

• Rebranded with new name and logo • Clear Vision, mission, strategy, objectives and long range plan • Create and Capitalize on more analytical positions • Reduce Non-Value Added Activity • Avenues for Career Growth • World Class Standardized Processes • Become the Best • Define our own Future

Our Vision is to be the best Shared Services Center in the world by providing world class customer service, focusing our efforts on world class talent, increasing our associate engagement survey score to 80% by the end of our Long Range Plan, and efficient and effective transaction management, achieving top quartile operationally when benchmarked externally across all measurable categories. Our Long Range Plan consists of 20 initiatives that will help us achieve these goals by year-end 2013.

One of these initiatives is Create Process Improvement Culture and Tools. We knew that to be competitive we needed to develop a culture of continuous improvement based on Lean/Six Sigma principles and provide our Associates with the tools they needed to be successful. Prior to the changes and new culture creation of continuous improvement, when the question as to why something was even done or why something was done the way it was was asked, the infamous reply was most often, “because that’s the way it’s always been done.” We were trying to get away from the order taking processor times and create a culture of complete employee involvement in the creation of ideas. We want to be in business for the long haul and our objectives are:

Associate-generated ideas that are relevant to the business and impactful, with a target of 85% implementation





25 Green Belt certification projects per year with ~$50k in savings per project Two Lean/Six Sigma Fundamentals training courses with 40 Plan-Do-Check-Act (PDCA) projects per year

Creating a process improvement culture and tools is foundational to us being able to carry out and execute on our entire Long Range Plan.





Change Methodology

(Tell us how you created the new culture)

What were the specific steps you took to create or change the culture? How long did it take? – What was the timeframe and the stages Who worked on the culture change? Were consultants or specialists used? Were Customers involved in changing or creating the new culture? What was their role? Did you use your own Branding? What was it’s impact? What other tools did you use? Please provide some examples of what you did to foster and build a sense of culture across your shared

services functions and within the wider business? (Maximum 1000 words)

We utilized embedded Operational Excellence teams (Managers and Coordinators) within each of the four groups within the center – Accounting and Inventory, Accounts Payable, Contact Center and Facilities, and Payroll, Tax and Licensing – to implement this change in our culture. We began efforts in 2009 and made great strides in 2011. We consider this initiative to be in a sustainable state.

Key 2011 Deliverables:

Ongoing utilization of the jcpssc Idea Store, a SharePoint site that captures Associate generated ideas and holds Managers and Associates accountable for implementing those ideas

Coaching responsibilities of certified associates to support future candidates Ongoing Green Belt trainings and certifications Ongoing PDCA trainings and certifications

Roles/Oversight:

Operational Excellence Manager and Coordinators jcpssc Project Manager and Business Support Associates Leadership Team (Center Manager, Directors and HR Sr. Manager)

Metrics:

Idea Store o Suggested o Implemented o Cost/Time Savings

Green Belt/PDCA

o Trained o Certified o Savings

Aging Green Belt/PDCA projects

Process Documentation o Total processes o Live with Documentation Completed o # of Process Maps and SOPs by status o Documentation Utilization & Review Status o Ideas generated o Savings

Metrics reviewed monthly with Director, quarterly with Center Manager Department visual control boards to promote our culture of measuring performance





Complexity of Change (How complex was this culture change to make?)

Was there a resistance to the change? Which area(s) did it come from and how did you overcome it? How wide a change did you have to make? How many employees, business units, countries etc. were

affected? Did you have a change management plan? Did the change prove more complex and difficult than you

had thought? Describe how hard or easy it was to create the new culture – What were the main leadership challenges for you and the team?

(Maximum 400 words)

At first, there was an overall fear of job loss, difficulty in expressing how processes were preformed, and unwillingness to share problems related to processes. Today associates are eager to improve processes, and share improvement opportunities with their peers and management. Realizing that the capacity they’ve created allows them to focus on new, more rewarding work which is transferred in from the Home Office and Stores.

Associates are also incentivized through formal recognition programs that are intended to drive the desired behavior:

Idea Store recognition o Every month Associates who have submitted ideas are randomly drawn to participate in the

jcpssc version of “Let’s Make a Deal,” which is broadcast center wide and gives them the opportunity to share the ideas they’re coming up with

Performance Contribution award o Quarterly, Associates are recognized within their departments for setting and achieving goals that

help the department exceed operational standards or customer service targets Spirit award

o Monthly cash award for demonstrating a winning attitude through things like teamwork, customer service, innovation, etc.

Long Range Plan award o Quarterly award for contribution and impact to Long Range Plan initiatives, including those

considered to be sustainable like the Create Process Improvement Culture and Tools initiative

As we continue to empower our Associate to take ownership over the work they do through sharing their ideas, as well as empower them through providing them with process improvement training and tools, we are finding that those who don’t want to be part of what we’re doing leave on their own and those who do want to be part of this culture are thriving. Overall, they feel like they are in control of their own future.





Benefits Achieved/Hard Improvements

(How successful has the culture creation been?)

What has been the hard improvement vs. the original objective or aim? Please quantify cost reductions,

efficiency improvements etc. with clear metrics. What is your measure of success? What has been the Customer and Employee reaction to the cultural shift? Please demonstrate any

changes in Employee or Customer satisfaction or other measures of feedback including impact of change on the wider organization.

Has the change had unexpected benefits on other areas, employees, processes? What other benefits have arisen due to the new culture?

(Maximum 400 words)

In 2011 we accomplished the following:

Overall continuous improvement efforts for the jcpssc generated an increased efficiency of existing work by 26% on the total FTE efforts (approximately 120 FTEs)

As subsets of the overall improvements, here were some of the direct contributions from specific tools:

Idea Store

o Implemented 1,892 ideas out of 2,320 submitted with 23,261 hours in savings (12.68 FTE) Green Belt

o 36 certifications o $1,311,364 and 34,337 hours in savings (16.51 FTE)

PDCA o 36 PDCA certifications o $104,961 and 5,492 hours in savings (2.64 FTE)

28 Green Belt and 78 PDCA projects in progress

2011 was about creating a cross-functional improvement culture that now helps jcpenney and not just the SSC. Additional benefits:

Associate engagement increased four points in two years Talent in Motion Workshop

o Held first-time 2-day real problem solving workshop which created the opportunity to create a culture of thinking big, diversity in thinking and ideas and taking time out to step back and think of not only improvements in our four walls but also cross-functional improvement. These ideas will be implemented over time, as appropriate

Transitioned into cross-functional improvement projects, allowing us to become a value lever to the business

Business development at senior levels to get the business and culture of the company seeing us as a service provider because of our improvement culture

o Demonstrated the transfer of 42 jobs successfully o Pipeline of jobs grew to over 100 potential additional moves in during 2011





Differentiators

(Why do you consider this culture creation to be Excellent?)

What differentiates your achievement over other organizations?

(Maximum 400 words)

Many organizations believe that their people are their most important asset and encourage them to share ideas and be innovative in their jobs. What we are doing differently is tracking ideas, measuring the results and rewarding people for what they’re contributing. The use of SharePoint, although readily available, isn’t utilized by most organizations to provide visibility to things like ideas and hold people accountable (particularly management) for listening to ideas and implementing them.

In addition, most organizations are not implementing Lean/Six Sigma and certifying their people on the same scale that we are. Over 25% of our Associates are certified in either Green Belt or PDCA since we started.

We also held an innovative workshop on big picture thinking that empowered some of the management in key roles to develop their skills and passion for change.

Through continuous improvement and the culture we’ve created, we continue to create capacity enabling us to absorb new work while still coming down 13% in our expenses since we started (we reinvested in new work without having to add since we have already created a 26% capacity).




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