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Six Sigma Is a Means to an End − Sustainable Results
B Six Sigma is a means to an end, rather than an end in itself. It should be applied to high leverage projects that lie on a company's business strategy path. To identify those high leverage improvement areas, business leaders should engage in a dialogue about high priority business outcomes and process drivers. Those involved must understand the capabilities that can be achieved with Six Sigma. This increases the probability of leaders "staying the course" to completion and ultimately the conversion of new found capabilities into sustainable business results – the end any company should have in mind. The ApproachThe following approach can be used to establish areas for improvement. It can also establish a framework for a dashboard of leading process performance indicators as well as a framework for process management. It is used best with a leadership team in a business unit that:
The approach follows three phases – causal mapping, identifying hot spots and wiring up the dashboard. Causal MappingThe first step in the process is a discussion with the business leader about the business outcomes that are most important to him/her during the next 18 to 24 months. They are typically at a profit-and-loss level, such as reducing the per-ton cost of goods sold by 20 percent or increasing sales by 20 percent. It is important to fix the overarching business outcome before convening the leadership team. Normally, that meeting flows from prior strategy planning exercises. With an overarching business outcome in mind, the leadership team learns about the causal nature of those outcomes. Any outcome (Y) is a function of many processes and inputs (x's). For example, the on-time departure of an aircraft is an outcome that depends on myriad supporting processes, from aircraft maintenance to baggage handling to security screening and even connecting flight arrivals. These supporting processes and inputs affect – to varying degrees – the on-time departure of an aircraft. Knowing the frequency and degree of impact of these factors, the airline would have insights into on-time departure performance, and could both predict and improve performance. That is the thinking behind causal mapping. The technique of causal mapping is simple. It is identical to a work breakdown structure or a CTQ tree turned upright. Start at the top, with the overarching business outcome (the big Y). Then identify the processes that currently have the biggest impact on the company's ability to reach that goal. Limit the number of processes to 7 or fewer (little Ys). Please note that the goal is not to model all aspects of the business, rather it is to identify those processes that could give the greatest leverage in the next 18 to 24 months.
Keep a running list of "strategic assumptions" such as divestitures or acquisitions. While there is uncertainty in any planning exercise such as this one, the "stakes in the ground" should be made explicit so everyone is working within the same context. Having established the first-level process drivers, drill down into one to identify the next level input and process variables that will influence that process's performance. The following is an example.
In brainstorming process variables, start with a verb. This helps avoid falling into the trap of listing functions. The drilling down has gone deep enough when it has identified a process with measurable outcomes and inputs. It is okay to have inputs, not just processes, at this level of analysis, e.g., accuracy of basic planning data. With one example completed as a group, pairs of participants from the leadership team should drill down into each of the remaining big Ys. There will be some overlap in processes and inputs identified. Not to worry. This is one indication of the importance of that element. The team should not be forced into only one (Y) category. It is more important to have a complete picture of the hierarchy of processes and inputs that have the biggest impact on achieving the strategic outcome. Identifying Hot SpotsThe hierarchy of processes maps out the causal relationships between day-to-day working processes and the company's success in achieving a measurable strategic outcome. Stepping back, the question is "which processes could have the biggest impact on reaching our objective?" Think of the causal map as a wired circuit board with a light at the top. If the circuit is closed at the lowest level, via what path would the impact be the biggest, i.e., the brightest response? A worthwhile exercise is for each participant to distribute 100 points at the sub-process (x's) level. The instructions: "Vote for the process where the connection to the goal is strongest and most in need of improvement." In other words, an essential process that is highly unreliable would get the most votes. While a participant could assign all his/her points to one process (there is no upper limit), the minimum number of points one can attribute is 10. By summing up the votes cast, a pattern of the highest leverage processes emerges. The reality test is: "If we could significantly improve these four or five processes, would we have a much greater chance of reaching our stated goal?" It is important to revisit and add to the "assumptions list" as necessary. The hot spots are those highest priority areas in need of improvement, outlined in red in the example below.
A common issue faced by companies embarking on Six Sigma or other improvement initiatives is project overload. A useful supplemental exercise is taking inventory of all current projects and seeing how closely they map onto the hot spots. Typically, 30 percent of ongoing projects can be combined, stopped or postponed because they do not relate to the company's areas in greatest need of improvement. Wiring the DashboardA process dashboard is one of the most important tools linking Six Sigma to the way work gets done, not just the way projects get done. A process dashboard is a set of leading indicators displayed as time-series data, and used for operations review and management.
A dashboard serves as:
Well-scoped DMAIC projects should help "wire" the process dashboard since the last step of their assignment is to put in place control measures and reviews. There is the danger that dashboards create more reporting bureaucracy. Rather than imposing dashboard measures on the business, key stakeholders should be involved in the exercises described above. They will easily identify information, just like projects, that should be eliminated and combined before adding additional reporting requirements. Once that is done, the selection criteria for process-related measures are:
The value of the dashboard is in its usefulness to process operators and leadership teams in managing the business. Start with one or two dashboard measures owned by a member of the leadership team. Begin using the information before attempting to complete the entire dashboard. Remember, the usefulness of the dashboard is a function of how fresh the data is, how automated the data feeds are, and the ease with which it can be interpreted. Typically, the following actions are required to further develop the dashboard:
Developing a fully operational dashboard may take six to nine months. ConclusionWhether on the operations or commercial side of a business, defining the causal relationships between desired outcomes and high leverage processes is an important step in strategy deployment. The causal map makes visible the connection between day-to-day activities and important business outcomes. It provides a framework for assessing the importance of ongoing projects, of which there are always too many. The leadership team votes together on the most important process-related areas to improve, the hot spots. Wiring up a dashboard of leading process performance indicators can be done over time, aided by DMAIC projects. It should be the centerpiece that balances the mix of improvement, design and process management activities.
Changing the nature of management reviews is more important than having a complete dashboard. The ultimate test of a dashboard's usefulness is in the extent to which it brings insights into how to better manage business performance. About the AuthorsEdoardo Monopoli is a founding partner of Valeocon Management Consulting. Since 1996, he has been helping business leaders deploy Six Sigma for maximum business results by aligning projects with high leverage processes. He has worked with General Electric, Johnson & Johnson and Pfizer. Mr. Monopoli leads Valeocon's People Potential Competence Center, which offers services such "positive deviance," an innovative approach to managing change. He can be reached at Edoardo.Monopoli@valeocon.com. Chris Funnell is director of process excellence for Johnson & Johnson Consumer Europe. He is a leading practitioner in applying the tools of Six Sigma, Lean and dashboards to help businesses improve their competitiveness. During the last two years, he has concentrated on improving processes related to demand generation in more than 20 J&J companies throughout Europe, the Middle East and Africa.He can be reached at Cfunnel1@cscgb.jnj.com. Reproduction Without Permission Is Strictly Prohibited – Copyright Requests Publish an Article: Do you have a Six Sigma tip, learning or case study? Share it with the largest community of Six Sigma professionals, and be recognized by your peers. It's a great way to promote your expertise and/or build your resume. Read more about submitting an article. "The Bottom Line" Links
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