As Regional Director of LEAN for the three Caesar casinos in Tunica, Hirsch realized that he needed to create a culture of continuous improvement. In 2009 Hirsch implemented Kaizen workshops which led...

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As Regional Director of LEAN for the three Caesar casinos in Tunica, Hirsch realized that he needed to create a culture of continuous improvement. In 2009 Hirsch implemented Kaizen workshops which led to an increase in customer service and $3 million saved. The hands-on events which included all employees, provided the necessary tools and insight for the casino staff and management to see and eliminate waste. Lean methods were taught over the course of 63 events; Hirsch was able to transform the culture of the casino by creating an environment that encouraged innovation that focused on waste elimination.
Every event concluded with a new efficient means to tackle a routine activity. New processes were documented using easy to follow steps. KPI Boards that displayed individuals responsibility as well as standard operating procedures were introduced and updated on a daily base. Teams would focus on the boards and discuss next steps, countermeasures, and improvement ideas.
Within my own professional career, I can't say that I've organized a documented wide scale attempt to change the culture within my organization. I've encouraged my employees to be transparent and share recommendations but nothing on the level of what Hirsch accomplished with the Casinos. In the past, I worked at a company that used KPIs to measure monthly departmental goals, holding different employees accountable for their role within a project. It wasn't until I read this case study that I realized similarities within the culture at Saint Gobain and Caesars. Management encouraged us to work together and document new processes to increase value within the accounting department.

TB0389
Copyright © 2014 Thunde
ird School of Global Management. All rights reserved. This case was prepared by Professor Nancy
Lea Hyer (Vande
ilt), Brad Hirsch, and Professor Karen A. Brown (Thunde
ird) for the purpose of classroom discussion only,
and not to indicate either effective or ineffective management.
Nancy Lea Hye
Brad Hirsch
Karen A. Brown
Implementing LEAN Operations
at Caesars Casinos
In December 2014, Brad Hirsch stood on the gaming floor of the Ha
ah’s Metropolis Casino and Hotel in
Metropolis, Illinois. Hirsch had assumed the position of Senior Vice President and General Manager at this
Caesars Entertainment property in mid-2014. Caesars’ culture was strongly oriented toward optimizing the
customer experience. This history, coupled with increased competitive pressures and new corporate financial
goals for 2015, had created the motivation to intensify improvement efforts at the Metropolis facility. Hirsch
had successfully led employee-centered initiatives to apply LEAN1 operating principles in three of the company’s
casinos in Tunica, Mississippi. He believed that what he learned from those experiences would be applicable at
the Metropolis location, but wondered if he should consider a modified approach that could potentially produce
esults more quickly with the help of a team of internal experts.
In 2014, Caesars Entertainment, based in Las Vegas, Nevada, was the world’s most geographically diversi-
fied provider of casino entertainment. With 68,000 employees worldwide, it operated 50 casinos in the U.S.,
Egypt, England, South Africa, and Canada, under the names Ha
ah’s, Caesars, Rio, Flamingo, Paris, Bally’s,
Horseshoe, and London Clubs International. Its largest concentration of properties was in Las Vegas, where nine
of its casinos occupied 1.25 miles on or near Las Vegas Boulevard, commonly known as The Strip. In 2013, the
company had net revenue of $8.6 billion U.S.
Caesars had developed an industry-leading loyalty-card program, introduced sophisticated customer-service
measurement systems, and had been the first to apply LEAN process-improvement concepts to casino opera-
tions. (For more on LEAN principles, see Appendix A.) As Hirsch thought about the challenges that lay ahead
for LEAN implementation aimed at customer-service enhancement and operational effectiveness at the new
Ha
ah’s Metropolis Casino and Hotel, he reflected on his previous experience in Tunica.
LEAN Implementation at Caesars in Tunica, Mississippi
At the end of 2008, Tunica, Mississippi, located about a 45-minute drive south of Memphis, Tennessee, was
the fourth-largest gaming market in the world with more than $1 billion in annual revenue. Three of Tunica’s
nine casinos were owned by Caesars. These three generated $545 million in revenue and accounted for 50% of
the Tunica market. Over 4,000 employees worked across the three Caesars properties, delivering hospitality and
entertainment services to 8,000,000 guests annually.
In late 2008, the economic environment for the Caesars Tunica casinos was a serious concern. First, the
U.S. macroeconomic collapse of the Great Recession had led to reduced customer spending on entertainment.
As a consequence, casinos in the region experienced declines in revenue, and competition for market share
was intense. Beyond the impetus for improvement inspired by macroeconomic challenges, all Caesars-owned
properties em
aced customer service as an essential element of the corporate operating strategy, and strove to
continuously increase customer satisfaction as gauged by rating scores. Every week, Caesars surveyed a random
sample of recent customers for each property. Survey respondents assigned scores of A, B, C, D, or F for various
dimensions of their Caesars experience (staff helpfulness, staff friendliness, speed of service, and other metrics).
Data showed that moving a customer from a B to an A score resulted in up to a 12% increase in customer
1 Caesars Entertainment capitalized the word “LEAN” to emphasize its role as a systematic program and distance it from
any connotations associated with a more na
ow view that might suggest downsizing.
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XXXXXXXXXXfor additional copies.
2 TB0389
spending. On a quarterly basis, weekly service-score data were averaged and used as a factor in determining staff
onuses. The higher the percentage shift of B scores to A scores, when compared to the same quarter the prior
year, the higher the bonus for team members. At the end of 2008, the Caesars Tunica leadership team sought to
deliver more conversions from B to A scores, both to increase customer loyalty in a hypercompetitive landscape,
and to maximize team-member bonuses and enhance employee satisfaction.
Members of the Tunica executive team recognized that to reverse the declines in revenue and challenges
to profitability, and improve service scores and market share, would require engaging the entire organization.
However, one challenge was the absence of a consistent and systematic problem-solving approach through all
layers of the 24-hour, 7-day a week business. As one associate observed, “If your supervisor is passionate about
casino cleanliness, casino cleanliness becomes your top priority. But your next supervisor, or the supervisor of
the next shift, might focus on a completely different aspect of the customer experience.” Hirsch recognized that
LEAN, with its easy-to-understand tools and concepts, could create a consistent and focused approach to process
improvement for all layers of the business.
Kaizen Events as the Organizing Framework for Implementing LEAN at Caesars Tunica,
Mississippi, Casinos
In December 2008, Hirsch was appointed Regional Director of LEAN for the three Caesars casinos in Tunica.
He and the executive team saw the urgency for change, and knew they had to make the right improvements and
sustain them. Hirsch created a Regional LEAN Team by recruiting two experienced, high-potential leaders from
the casino operations in Tunica, each with a passion for process improvement. The team agreed to orchestrate the
LEAN rollout around a series of kaizen events. These were intensive five-day workshops involving employees from
multiple functions and levels working together to identify and improve target processes.2 For example, an early
kaizen event focused on improving hotel operations—from check-in to check-out. The kaizen team included a
department manager, bellhop, housekeeper, front desk clerk, supervisor, information-technology associate, and
a gaming-floor employee. The department manager’s participation ensured that she understood the work under-
taken during the kaizen week and would be prepared to lead the follow-up activities that grew out of the event.
An initial challenge was that, to some casino employees, the word lean implied cutting jobs. To address
this challenge, members of the executive team consistently communicated that the goals of eliminating waste
via LEAN efforts were to improve the customer experience, increase process effectiveness, teach problem-solving
tools, and improve employees’ work environments—not to cut personnel. Sharing this message was important,
ut Hirsch and his team knew they simply had to start conducting kaizen events so individuals would SEE that
jobs were not being eliminated. As Hirsch explained, “We thought our behavior would speak louder than our
words, and it did.”
The five-day kaizen workshops—each of which followed a similar structure (see below)—yielded immediate,
tangible improvements and laid the foundation for post-event efforts to establish a LEAN culture throughout
the organization. During calendar year 2009, Hirsch and his team staged 63 five-day kaizen events. These events
esulted in improved customer-service scores and $3 million in documented savings. Each five-day workshop in-
cluded a set of activities intended to build knowledge, engage participants, solve problems, and develop solutions.
• Kaizen Day 1
Every kaizen event began with education about LEAN concepts. A major component of this education was
teaching employees to recognize waste (or, in Japanese, muda). Hirsch and his team used a memorable acro-
nym for teaching waste recognition that seemed to resonate through the entire organizational hierarchy—
DOWNTIME (defects, overproduction, waiting, not engaging people, transportation, inventory, motion,
and extra processing). At each kaizen event, the facilitator explained DOWNTIME using examples from the
casino environment.
2 C. Marchwinski and J. Shook (Editors), Lean Lexicon: A Glossary for Lean Thinkers, Fourth Edition (Cam
idge: The Lean
Enterprise Institute, Inc., 2008, p. 41.)
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XXXXXXXXXXfor additional copies.
TB0389 3
– Defects: Defects are mistakes that result in items being scrapped or reworked. Delivering a drink to
a customer with ice when the customer has requested no ice is a defect. Checking a guest into a hotel
oom with the inco
ect bed type (i.e., two queen-size beds instead of a king-size bed) is a defect. In both
situations, wasteful rework is required and the customer is left with a poor impression.
– Overproduction: This is production in excess of what the customer requires. Customers in one restaurant
were sometimes served water with three
Answered Same DayApr 17, 2022

Solution

Parul answered on Apr 17 2022
8 Votes
Reply to Peer's Post
Indeed, I agree with you, that Caesar Casinos need to create a culture of consistent improvement. I strongly believe that if any organization wants to survive the test of time and thrive in future then it is imperative to constantly evolve with environment as well as challenge existing processes and procedures with the better one. Majority of people working in the business environment have witnessed that any success is never about one-moon wonder instead it is more about replicating the success. There are group of actions, behavior as well as processes that are required to be evolved primarily since market advancing with time. As it was evident from the case, customers of Caesar Casinos are constantly evolving and have many options to select from hence the casino needs to differentiate their services and products. I found your post extremely interesting and intriguing...
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