Six Sigma

Photo/Michael Sears

Shahbaz Shahbazi and Sheila Shaffie are applying Six Sigma techniques learned at General Electric Co. to help small and midsize financial services firms operate more efficiently. They launched their consulting firm, ProcessArc, in March 2004.

ProcessArc’s Process

Here’s an example of how ProcessArc says it applied Six Sigma’s five steps to help a financial company achieve its revenue goal by streamlining certain transactions to improve customer service levels:

  1. Define- Decided to focus on high-volume transactions to reduce cycle time, operating cost and risk
  2. Measure – Collected operational data and customer feedback to figure out where to focus re-engineering
  3. Analyze- Mapped the entire transaction and found it involved 250 steps rather than the 10 to 12 management assumed
  4. Improve- Using the expertise of those doing the job, figured out how to re-engineer it. Reduced process to 100 steps from 250 steps, reduced process time by 40% and lowered operational costs by 20%
  5. Control- Implemented a management matrix for monitoring the transaction process to ensure improvements would be sustained

Husband-wife team finding a niche in financial services

Sheila Shaffie and Shahbaz Shahbazi could have started their consulting firm anywhere.

After all, the former General Electric Co. executives are both experts in Six Sigma, a strategy to increase efficiency and quality by streamlining processes that is sweeping across America’s financial services companies.

“There’s a look of a Six Sigma résumé that has a glow about it,” said Jay Sugar, owner of Lean Sigma Corps Recruiters in Chicago. “When I see one like that, I know if there’s a company that has a full-time position, their résumés are going to be a slam dunk.”

Shaffie and Shahbazi’s résumés have that glow, according to Sugar, who has tried to recruit them for jobs at client companies.

Shaffie, 30, and Shahbazi, 38, decided to strike out on their own and in March 2004 founded ProcessArc.

Even though some of the firm’s first clients were on the East Coast, the couple kept their headquarters in Milwaukee.

Shaffie is originally from Toronto and has an MBA from the University of Chicago. Shahbazi is a New York-bred manager who redesigned GE’s sales processes from its European headquarters in Paris and has an MBA from Rensselaer Polytechnic Institute.

They got married in February 2004 and were already in Milwaukee because of their jobs with GE Capital and GE Healthcare Technologies. The couple decided to stay because their business could benefit from the relatively high density of financial companies in the city and because Milwaukee seemed like an easier place than many bigger cities to start a business.

“We could never do this in New York,” Shahbazi said. “People have shown us such camaraderie and niceness here – and we don’t have the name Giuliani on our Rolodex.”

ProcessArc has four clients right now, and the firm can manage four to six at a time, Shahbazi said. The company has an office downtown and no outside funding, he said.

Big financial firms such as Bank of America, Countrywide Financial, the Vanguard Group and Wachovia have been using Six Sigma techniques for some time, Sugar said. But now he sees smaller financial companies starting to get interested.

Those small and midsize firms are exactly the customers ProcessArc is targeting.

“We knew that small to midsize institutions would need help – that they didn’t have the horsepower to go recruit three people at $200,000 to $250,000 a year,” Shaffie said.

She and Shahbazi say they want to keep their firm small – the only help they have now comes from three part-time associates, all former GE employees. They are trying to make contacts with private equity firms to get client leads, she said.

“This is classic America going on – where you have enterprising young people who are highly educated with a skill set endeavoring to take it into the small-cap world,” said Steve Kent, managing director of the Chicago-based investment banking practice for Keefe, Bruyette & Woods and one of the financiers the couple has met with for leads.

“I think their chances of succeeding in the financial services area are excellent,” he said.

The name Six Sigma literally refers to the goal of reducing defects or errors to 3.4 per million. It was started at Motorola in the mid-1980s, but GE very quickly adopted it and over time became the best place to get an education in the methodology.

“GE alums are the Harvard MBAs of the Six Sigma world,” said Andrew Nunemaker, chief executive officer for EMSystem LLC in West Allis and a former GE executive.

Shaffie and Shahbazi’s GE credentials and Six Sigma expertise have helped them land clients who say they have benefited.

Shaffie “picked up what we did very quickly, had a lot of knowledge of the financial services industry and was able to apply it to what we do,” said Lou Hafkin, controller for Business Loan Express LLC in New York.

ProcessArc worked with Business Loan Express and its parent company, Allied Capital, a private equity firm.

“They came in with fresh eyes, and they looked at how we do our business with no emotion and no personal ties to it, and that was a great benefit,” said Barbara Coutley, senior vice president/secretary at Wauwatosa Savings Bank.

A year after it started, ProcessArc is generating revenue and making a profit, Shaffie said. She declined to discuss specific numbers but said she and her husband expect their company to continue to benefit from their ability to re-engineer financial companies’ processes.

“It all comes down to having competitive fees and excellent service – and that all comes down to using Six Sigma to get there,” Shaffie said.

From the June 10, 2005, edition of the Milwaukee Journal Sentinel