The idea of a not-for-profit organization is eloquently simple – it does not operate for a profit. Some people falsely believe that the very nature of such organizations necessarily implies some type of complexity that prohibits or otherwise precludes its involvement in the world of Six Sigma. When it comes to implementing improvements in not-for-profit institutions, the management often allows organizational stereotypes to derail their thinking, clog their judgment, and jade their vision. Just because an organization is not driven by profits does not mean it is not “cost motivated.”
Granted, in many ways not-for-profit organizations appear to be different from commercial and industrial enterprises. However, all organizations have core processes, regardless of their work orientations. In fact, virtually all processes have an associated operational cost. Not too often does one hear the words: “We don’t care about the operational costs of our core processes.” If the federal government didn’t care about the cost of operation, then why do budgets exist?
True, the federal budget may be more fiction than fact, but nonetheless, it does represent an attempt to forecast and control costs. So why is there an approval process? Of course they care – everyone cares about operational costs. Everyone seeks to minimize his or her cost-per-transaction. After several years of working in the defense industry, I can unequivocally say that the DOD cares about its cost structure – sometimes to a fault, other times to excess, like many commercial and industrial organizations.
In support of this reasoning, we must remember that “a process is a process” – it has inputs and outputs. In fact, all processes have inputs and outputs, bar none. It is also true that any type of variable can be measured – regardless of whether it is an input, process, or output variable. Sometimes, the cost to acquire such measurements can be prohibitive; however, this is the exception, not the rule. Statistics are designed to “crunch” variable measurements and then report on the variable’s behavior (in the form of tables, charts, graphs, and diagrams). By learning the behaviors of a process, one can begin to exert decisive control over its many variables. Naturally, as this occurs, costs go down. As costs go down, stakeholders are progressively pleased. The aforementioned system can be applied to virtually anything – manufacturing, service, finance, education, and even the federal government.
As a final point, consider the phrase “reduce cost.” In this context, we intuitively understand that the term “reduce” is a verb and the word “cost” is a noun. We take improvement action on the common verbs of an organization, not the nouns. For example, consider the verbs “improve, reduce, make, communicate, move, transfer, record, and document,” just to mention a few. Does the federal government employ any of these verbs? Who doesn’t?
For even more insight, see “Feds May Unleash Six Sigma on Terrorism” by Del Jones, USA Today, October 31, 2002.
Science is the best way to satisfy your own curiosity for the governmental
— Soviet physicist Lev Artsimovich (1909-1973)