Book Focus: Career – Business Strategy – IT, Leadership, Production & Logistics
• Use a Six Sigma quality-control program to help employees embrace more efficient processes.
• Begin Six Sigma by defining your objectives. Then look at the processes that support those goals.
• When choosing your first Six Sigma projects, look for the ones that are doable and will have the biggest impact.
• The five stages of Six Sigma are “Define, Measure, Analyze, Improve and Control” (DMAIC).
• One of the biggest mistakes people make is skipping steps in the DMAIC formula.
• To navigate to better performance, build a suite of metrics, called a “measurement dashboard.”
• Employees at every level need training in Six Sigma.
• Management must anticipate resistance to change and then respond.
• Select the “best and the brightest” to serve on your project team.
Six Sigma has been fully inculcated into your culture when it becomes part of everyday life in your organization.
What You Will Learn
You will learn:
1) How to get Six Sigma projects off the ground;
2) How to put Six Sigma to work throughout your organization; and
3) What pitfalls can derail a Six Sigma initiative.
The Origins of Six Sigma
One of the classic errors CEOs make when introducing a program such as Six Sigma is to place too great an emphasis on consensus building. Instead, push forward along the path you know is right. When you reach your destination, everyone will agree that it was the right way to go. Six Sigma began as a straightforward efficiency program in the mid-1980s at Motorola, which was struggling with inefficient manufacturing processes and high rejection rates. Not surprisingly, the first Six Sigma initiative focused primarily on making manufacturing more efficient. It did not address waste in other areas of Motorola’s business. Many years passed before other businesses came to view Six Sigma as a strategic tool. Jack Welch, CEO of GE, had great confidence in Six Sigma’s ability to improve quality and efficiency. When he decided to implement it, he not only announced it internally to throw his authority behind the project, he also announced it to Wall Street analysts who followed his company’s performance. One challenge with any Six Sigma program is that employees cling to inefficient processes, rather than embracing new ones. This is called Six Sigma resistance. By widely announcing his intentions to move forward with Six Sigma, Welch put everyone on notice that it would be a mandatory aspect of life at GE. Later, as the company’s performance began to improve under the Six Sigma regimen, the market rewarded Welch with increased valuations for GE’s stock.
To develop a Six Sigma strategy for your organization, follow eight essential steps:
1) “Creation and agreement of strategic business objectives” – Gather all of your company’s top leaders. Begin with a two-day Six Sigma working session and prepare for it. First, agree on the company’s strategic business objectives.
2) “Creation of core and key subprocesses” – Process identification can be painful for managers who are accustomed to hierarchical command and control because it forces them to think outside their comfort zones. Yet identifying the processes that are at the core of your objectives is critical.
3) “Identification of process owners” – To improve the company’s processes and achieve its strategic objectives, executives must know who is responsible for what. Effective process owners are experts about their particular areas of responsibility, and will gain or lose based on how well their processes meet company objectives.
4) “Creation and validation of measurement dashboards” – Determine what
measurements or metrics the company will use to verify whether a process is being improved. Use a focus group or survey to test the validity and effectiveness of your dashboard.
5) “Data collection on agreed dashboards” – Managers must determine how to gather the data and develop reports to fulfill the dashboard measurements.
6) “Creation of project selection criteria” – For the first wave of Six Sigma projects, select seven to 10 subprocesses for improvement. Which projects you choose depends on what criteria your company’s leaders use to reduce perhaps 50 subprocesses down to less than a dozen.
7) “Choosing first projects” – If you create a chart listing all your potential Six Sigma projects on the vertical axis, with column headers for each project criteria on the horizontal axis, you’ll have a powerful tool for determining which projects to attack first.
8) “Maintaining and managing the business process management system” – As you adjust the way you manage activities, continue “to link…key processes” with your strategic business goals.
Training Your Champions
Every change initiative requires a champion. Six Sigma champions at each supervision level face many responsibilities. Champions must articulate their teams’ objectives, and help remove the obstacles to reaching those goals. All of this involves training. At each stage of Six Sigma, champions pose a series of questions to their teams. These questions are known as “DMAIC,” which stands for “Define, Measure, Analyze, Improve and Control.” Any Six Sigma process moves through these five stages but in-depth training is essential. Champions must learn how to manage team members who:
• Grow impatient and skip steps – Some members want to experiment with suggestions for improvement before the problem has been properly defined, measured and analyzed. The champion must be prepared to get these members back on track.
• Need the direction of a facilitator – Having a third party step in encourages equal participation and discourages “maladaptive behavior.”
• Ignore vital data – In many ways, Six Sigma focuses on numbers. If people choose to ignore the data, either you’re using the wrong metrics or your staff isn’t following proper Six Sigma procedures.
• Don’t follow optimum procedures – Some team members may resist using “pilot” solutions, but trying out new systems prior to full implementation enables you to tweak them before introducing them to the end users.
For every Six Sigma project, the champion must address 10 tasks:
1) “Selecting the team.”
2) “Choosing a team leader.”
3) “Creating a business case.”
4) “Creating the preliminary problem statement.”
5) “Defining the scope of the project.”
6) “Identifying the team’s goals and objectives.”
7) “Allocating resources.”
8) “Setting the project time line.”
9) “Communicating the business case to the team.”
10) “Agreeing on decisions that the team can make alone and those that should involve the champion.”
The most important task is the first one: Selecting the “best and the brightest” to work on the process that needs improving is crucial. Adult learning theory offers one of the best ways to pass along the knowledge required to make Six Sigma work. In adult learning, knowledge must have a real-world application that results in immediately relevant experience.
A Closer Look at DMAIC
Each phase of DMAIC has substages called tollgates. For instance, to assess a process in the “Measure” phase, you need to formulate a data-collection plan, considering what information is available, and how will you gather and present it. Then you must execute the data-collection plan. Each stage matters and each stage has tollgates you must pass through. Analysis is the most important element in the measurement stage. Having all the data in the world won’t do you much good unless you can analyze it properly to understand what it’s telling you. You might use three types of analysis:
1) “Data analysis” – This tells you what the numbers indicate. This analysis rests on the understanding that “variation is the enemy in any process.”
2) “Process analysis” – Data reflects the actual processes being performed. Use process analyses, including “work flow analysis” and “process mapping,” to obtain a clear picture of your processes.
3) “Root-cause analysis” – Study the fundamental inputs that affect your results.
Shaping Your Corporate Culture
Never overlook Six Sigma’s cultural component. Every step of Six Sigma influences corporate culture, from creating and managing process dashboards, to selecting the second wave of Six Sigma projects and instituting training for programs at each level of authority. In every area, management must commit to countering resistance. Your main goal is to make Six Sigma concepts and continual improvement into ordinary components of your employees’ everyday work life. Ultimately, you hope this methodical approach to problem solving will spread within your organization as you adopt third-wave and fourth-wave projects. Finally, the day will come when Six Sigma is so ingrained that you can detach yourself from your consultant. Then DMAIC training and project supervision can be an internal affair.
To implement a Six Sigma initiative successfully, avoid 10 common pitfalls:
1) “Learned helplessness” – If your teams and executives feel there is no point trying, every initiative is doomed. Six Sigma works only if people have the courage to act.
2) “Making cost reduction your primary Six Sigma goal” – If operational efficiencies are your only concern, Six Sigma won’t solve your problems. Six Sigma drives organizations to give more value to their customers, so using it as a cost-cutting system is a sure way to fail.
3) “Trying to be a popular Quality Leader” – Quality Leaders have to make tough decisions. You have to ask frequently about progress and obstacles, and make sure that everyone understands that you’re serious about implementation. This requires a high level of respect and credibility, but not necessarily close friendships.
4) “Consensus management” – British Prime Minister Margaret Thatcher once said, “Consensus is the negation of leadership.” Organizational transformation, including Six Sigma, requires strong leaders.
5) “Waiting until the last minute” – Procrastination is a universal tendency. A Six Sigma consultant will help you guard against unnecessary delays.
6) “Neglecting common sense” – Don’t complicate your task. Simplify wherever possible. “Six Sigma is a way to tap into technical expertise and knowledge, not a way to replace it.”
7) “Stretching your Six Sigma infrastructure after Wave 1” – Select fewer projects for the second wave of your initiative. Don’t become overambitious once you’ve accomplished the first wave. Don’t underestimate the amount of time that success requires.
8) “Keeping the Six Sigma group in the quality department” – Restricting Six Sigma participation to your firm’s quality department impedes its introduction to the overall organization. Executives order the Six Sigma team to report to the vice president of quality, and then they wonder why the rest of the organization isn’t adopting its initiatives.
9) “Forgetting that Six Sigma is a management philosophy” – What makes Six Sigma different from other change and quality initiatives is its strategic strengths as a management philosophy that can improve every aspect of your organization. Too many leaders want a quick fix instead of a comprehensive transformation.
10) “Whining” – Employees who complain that nothing will ever change at their organizations are part of a self-fulfilling prophecy.