Driving Advertiser Satisfaction and Revenue Growth: A GE/NBC Universal Process Improvement Case Stud

This interview was first run on Six Sigma IQ on 12/17/08. In an age where DVRs reign supreme, it is no surprise that the advertising community has had to contend with an ever-changing television viewing landscape. With the recognition of expanding viewer segments, advertisers are looking to media companies to bring these targeted audiences to their brands. Tiran Dagan, Director/Engagement Leader of GE NBC Universal Strategic Initiatives & Analysis, speaks with the Six Sigma IQ on how NBC/Universal addressed the needs of its advertisers by streamlining its ad sales process using a variety of process improvement methodologies. You are part of the Strategic Initiatives & Analysis (SIA) group and GE/NBC Universal. What does your group do? SIA is the internal consulting arm of GE’s NBC Universal. SIA is a next generation quality deployment organization, a spin-off of sorts of GE’s traditional Six Sigma program. We have the mandate to support senior leadership in long-term vision strategy, as well as to help business units operationalize the goals and objectives set forth by that strategy. Though we have our roots in quality and process improvement, Lean and Six Sigma are tools at our disposal in a wide variety of projects, some of which we classify as "strategy" or "consulting" and which are far removed from operations and require abstract thinking and strategic research and analysis. Our bicoastal team of full-time employees is divided between Universal City in Los Angeles and 30 Rockefeller Plaza in New York. At times we are asked to support broad-based initiatives that are so large in scope that they are broken into a series of smaller initiatives that can vary from strategic to tactical projects. An example of this was the Ad Sales Evolution. How did NBC Universal’s SIA group identify the need to run this process improvement project? The media industry is facing mounting pressure from its advertisers to deliver targeted audiences for their brand messages due to significant changes to audience viewing patterns resulting from technology advances such as DVR and user-generated content. Senior leadership at NBCU believed that a more efficient ad sales process would improve advertiser satisfaction and drive revenue. As a result, SIA was tasked with streamlining the process of planning, pricing and delivering ad inventory across all of NBCU’s TV network, cable and Internet properties. Did you face any challenges with the implementation of this process improvement initiative? In scope for Phase I of the process improvement initiative were multiple TV and cable properties. The first significant challenge we faced was to capture the current state and devise a future state. Because of the grand scale of this process improvement effort there were increased odds for failure. Each property had its own ad sales process that it believed to be "unique." However, at a high level, their pricing strategies for the up-front market[1], their mid-year sales processes and their management of existing contracts (i.e. advertising "deals") were actually quite similar. Our challenge was to convey this message to each property. With over 150 stakeholders involved and the monumental task of tackling the end-to-end value chain (sales, operations and fulfillment), we realized we would need to modify our traditional approach to project execution. We scheduled five current state mapping events, a "share the current state" event and a final "future state design" event. Set forth below is a high-level timeline of the first phase of the initiative: What steps did your team take to ensure that everyone was onboard with the process improvement project? How were responsibilities delegated within the organization? Change management played an important role in this process improvement initiative. Luckily we were able to leverage GE’s well-structured approach to change management as formulated in the GE CAP methodology[2]. In order to maximize our role as facilitators at each of the events, our team developed a detailed communication and project governance plan to ensure that we had a shared vision, we were able to mobilize commitment and make the proposed changes last. In addition, we created a newsletter, a project Web portal and periodic e-mails to leadership of the affected organizations to keep all parties informed of our progress. These initiatives required additional collaboration between our team, the ad sales commercial excellence team and senior leadership from the ad sales organization. What process improvement tools and methods were used to drive this change? How did they get to the root of the problem of the former ad sales process? This project required a concerted effort of cross-functional skills and tools. We utilized GE CAP, Lean action workouts and value stream mapping. We meticulously planned each of our nine events, scripting every moment of each day and developed visio templates for rapid capture and annotation of value stream maps. There were two SIA facilitators and one SIA team member capturing the current state process in an Excel spreadsheet (from the post-its on the wall) at each event. At the same time, other SIA team members were meeting and interviewing participants for the ensuing Lean action workouts. As a result of our pre-event preparation, there was a degree of confidence and familiarity that helped us as facilitators.

Figure 1: Implementation Roadmap

We held a three day event in which we selected a group of cross-functional participants from each of the properties to meet and discuss each of their ad sales processes. Our digitized process maps and our ability to "chunk" the complex process into standard process units helped these participants realize that, despite slight variations, each of their processes were pretty much the same. This was one of our greatest accomplishments as it was the key to this project's success. Following each event, action plans (for short term, long term and IT fixes) were assigned and owned by individuals from the business or IT. We made sure to limit our role to monitoring the progress of these action plans to ensure that the businesses drive and live with the consequence of their decisions–a critical component in creating lasting change. What were the realized benefits from the process improvement project? On a macro level we now have the ability to sell ad inventory across all of our properties. We were able to connect a disjointed set of processes in order to increase visibility across ad inventory and increase planning flexibility–both of which are key to the success of NBCU in the future. The ad sales teams for each of the properties have come up with creative ways to help manage complex deals and to address very basic operational challenges and reduce defects generated in the planning process thus increasing yield and throughput as well as customer satisfaction. We now have better insight into our ad inventory and are able to share information across properties to gain better insight into our customer needs. Our sales force has been equipped with sophisticated CRM tools and streamlined operations business processes that should increase revenue and customer satisfaction. A detailed list of requirements was also developed to help guide the design for a new inventory and advertising fulfillment (known in industry jargon as "traffic") systems to support all of the NBCU Ad Sales Enterprise. NBCU follows its parent company, GE's, lead, and employs a "Lean First" approach: Don’t try to make a process automatic before you Lean it out of its wastes to reduce cycle time; and focus on your customer’s needs or else you might end up with a highly automated–but broken–process. How does SIA continue to shape and encourage process improvement within NBC Universal? Are there any major initiatives on the horizon? SIA team members usually stay on our team for 24 months before they transition into the business side of operations. We are increasingly looked at as the breeding ground for future leadership at NBCU. As a result, our services are in high demand, and we often must turn down request for projects that we can not fit in our pipeline. We are currently supporting new digital technology initiatives, the development of corporate metrics (Balanced Scorecard) and centralized corporate purchasing optimization. In today’s challenging economic environment, it is even more important that companies re-evaluate how they do business. What advice do you have for businesses that are seeking to streamline their processes amidst heavy cost cutting? How can they ensure that their relationship with their clients will not be detrimentally affected by this need to cut costs? In challenging economic environments, companies often turn to layoffs as a cost cutting measure. While these measures may offer short-term solutions, it is vitally important not to lose sight of the bigger picture. A company’s greatest asset is its knowledge capital. Companies need to take a well-rounded and holistic approach to managing their business units. A company’s investment in its employees is what enables its process growth, which in turn allows it to increase the value it delivers to its customers, thus resulting in better financial results, which are ultimately measured by revenue, profitability. Make sure you are monitoring each of these aspects as you calculate your next steps because it is difficult to improve a process if you to not have the knowledge capital to continuously develop new products that will interest your customers. Innovation and creativity need a helping hand in a declining economy (and workforce) so invest in training and look into systemic innovation techniques (TRIZ, ASIT, etc) in addition to your quality and process improvement efforts.

In May of each year U.S. broadcasters announce their programming schedules for the new broadcast year (which begins in September). Shortly after that, the sale of inventory (advertising slots) begins. Broadcast networks sell about 60 to 80 percent of their air-time inventory during a brief period lasting about two to three weeks starting in late May. This sales period is known as the up-front market.
Change Acceleration Process (CAP): a set of principles designed to increase the success and accelerate the implementation of organizational change efforts. It addresses how to create a shared need for the change, understand and deal with resistance from key stakeholders and build an effective influence strategy and communication plan for the change

Interview by Genna Weiss