Assignemnt: Integrating Six Sigma with Strategic Planning at Cigna
Please respond to the following discussion topic. Your initial post should be a minimum of 150 words in length. Then, make at least two thoughtful responses to your fellow students' posts.
Please read the case study on page 585.
What are the benefits to using Six Sigma? How imperative was this to Cigna?
QUALITY in PRACTICE: Integrating Six Sigma with Strategic Planning at Cigna19
At Cigna Corp., a 28,000-employee provider of employee health care and related insurance benefits, the vice president of Six Sigma business excellence is just two levels below the CEO on the organizational chart. The woman who holds this title, reports directly to a member of the corporation's management team. This simple fact helps to explain the rapid growth, holistic use, and impressive results of Six Sigma at Cigna.
Cigna has five strategic imperatives:
1. Establish a meaningful cost advantage relative to the competition.
2. Help improve the health and well-being of members and the people Cigna insures.
3. Bring innovative products and services to market.
4. Become the partner of choice to its customers.
5. Create a winning environment in the organization.
Strategic planning is an absolute necessity in a company like Cigna that competes in a tough, volatile marketplace. Six Sigma is viewed as a means to execute the strategic plan effectively and to do so in a way that enhances quality, reduces costs and makes the company a stronger competitor. Executives and managers learn the basics of Six Sigma, lean tools, continuous improvement and the basics of design for Six Sigma (which we learned about in in chapters 7 and 9.). Managers also learn what behaviors are required to ensure the following:
• There is continuous improvement.
• The right projects are selected with the right people to lead them.
• There is ongoing assessment of projects.
• People have time to serve on projects.
• Managers ask the right questions during each phase of a project.
FIGURE 11.13 Cigna's Holistic Six Sigma Model
Strategic planning has become increasingly important as Six Sigma has matured at Cigna. When Six Sigma was launched at Cigna, leadership made it clear the approach would be holistic and would not just focus on productivity improvement, but would require behavioral changes and a focus on customers. Figure 11.13 shows the conceptualization of how Six Sigma supports a strategic focus at Cigna. One project involved one of Cigna's largest clients, which was dissatisfied with errors and how long it was taking to pay claims accurately. This customer got its own Six Sigma professionals to work with Cigna. The Six Sigma project exceeded the customers' expectations from both timeliness and quality standpoints. In fact, the customer was so satisfied, it gave Cigna additional business.
Cigna looks at the cost of doing nothing differently, figures how much improvement it can make, and then comes up with a dollar differential. A 0.1 percent improvement can save millions. While initial concentration was on efforts that would bring quick and significant results, Six Sigma at Cigna has matured, and it has increasingly focused on impacting goals of the most strategic importance to the organization. The challenges of the huge cost of care and quality of care facing the U.S. health care industry have led Cigna managers to wonder whether they could extend its improvement methodology to the industry as a whole to address some of the key challenges in the U.S. health care marketplace, including:
• A shift away from cost based models of health care toward a value based system
• Medical care cost inflation
• Demographic changes that necessitate the need for more care availability
• Inconsistent quality of care
• The growing number of Americans who use emergency rooms for primary care because they lack health insurance
• Rising consumer expectations fueled by greater transparency of quality
As one of them noted, "Six Sigma is about quality, continuous improvement, and sustained excellence-all of which should be basic to the mission of every organization that's in the business of providing access to health care."