Does Size Matter?

All too often we hear the accolades of Six Sigma being utilized in a large (and often publicly traded) companies. In recent years the DMAIC methodology has been spread into smaller healthcare organizations, government, and even some school districts. However it seems there is a vast under-representation of Six Sigma in small companies and private firms, when compared to larger counterparts. When is the last time you heard of a private equity firm or a small business celebrating Six Sigma success?

When you’re a billion dollar company there is almost a sexiness to the sound of telling shareholders how many tens of millions of dollars Six Sigma projects have added to the bottom line. Having formal in house trainers and support in the form of Master Black Belts, statistical software packages, and completely committed Black Belts also doesn’t hurt.

My advice is that a smaller company should not believe a Six Sigma infrastructure is an unattainable goal. Rather, the structure and elements of deployment may need to be altered a bit from traditional big business models.

Examples of alteration can include assigning multiple roles to a position (ex., Quality Manager can be also considered Master Black Belt) and utilizing existing resources, such as the analysis and equation solver tool packs in Microsoft Excel (as opposed to buying additional software). Metrics to measure success can be tailored as well. By measuring Six Sigma value in terms of a percentage of revenue, profitability, new business opportunities, etc. the success will be more understandable and meaningful than just stating how much money was saved.

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So does size matter when it comes to having a successful Six Sigma culture? In my opinion the answer is no; you just have to be a bit more creative.

Comments 3

  1. Say What

    Lean Six Sigma, the not quite so new opiate for the masses? There are many ways to implement the five functions of management – Planning, Organizing, Staffing, Directing, Controlling – into one’s management style, and Lean Six Sigma (LSS) seems content to plagiarize from the best management practices to create a well defined, rigorous process. I see the real question as, “Why would a small firm want to employ a rigorous, multi-phased process that carries with it a lot of overhead (can U say TIMWOOD?) in the form of black and green belts?” Henry Ford did not need black or green belts. He only needed an eye for waste and to answer every question with “why not?” Last week I visited a Toyota manufacturing plant located a short 4-hour drive from Tokyo. They don’t have any green or black belts.

    Any organization can successfully use any rigorous process to identify customers’ desires or to analyze the firm’s processes. A Porter Five Force analysis with a good SWAT analysis accomplishes quite a bit. Management by Objectives works very well. Perhaps we can agree that larger organizations are more difficult to control and to get moving in a unified direction. They need the constant dogma chant offered by the LSS shepherds. I believe another reason LSS is found in larger firms is because their executives like the process-study-free approach green and black belts offer. The executives never really have to learn their processes because someone else is figuring it out for them. This is not to short change Lean Six Sigma. It has taken the best from many management disciplines; however, I submit a small firm can successfully implement all or part of Dr. Deming’s ideas without a black or green belt.

  2. Steven Bonacorsi

    Hi Holly,

    Bravo, your right on. Six Sigma is a customer focused leadership methodology that ensures the products and services we deliver to our customers are defect free. While small businesses will have many of the same types of process concerns as larger businesses, there is much they can leverage as existing best practices.

    While the cost to train a small business team in the skills of a green or black belt can be expensive, leveraging some of that good old common sense as "Say What" lays outs well above is also an option. There are many books and guidelines out there for those interested in gaining a savvy business competitive edge!

    Warm Regards,

    Steven Bonacorsi
    Lean Six Sigma Master Black Belt

  3. Holly Hawkins

    Say What,
    I’d like to respond to a few of your comments…
    “Lean Six Sigma (LSS) seems content to plagiarize from the best management practices to create a well defined, rigorous process”.Most Six Sigma colleagues I know would freely admit the bulk of the content in Lean Six Sigma is not new, however to plagiarize would mean to utilize without acknowledging credit and I don’t really see that happening. Whether your performing Kano analysis (and referencing the Conoco engineer who developed it) or discussing a Pareto Chart (and discussing how it was used by Pareto in the Italian tax collection system) there’s generally credit given to whoever came up with the concept. To address the question, “Why would a small firm want to employ a rigorous, multi-phased process that carries with it a lot of overhead…in the form of black and green belts?”, I would focus on the return on investment. Many smaller companies are not the benchmarks of Planning, Organizing, Staffing, Directing, Controlling, simply because of their lack of existence when compared to corporate giants who have been around for decades (and have gained additional advantages through companies they have merged with and acquired). If you can hire a Six Sigma resource, even in a part time capacity such as a green belt, why wouldn’t you when they could potentially return several times their salary in hard value to the business?I agree that Toyota does not have Black or Green belts, however after touring a Toyota plant in the Pacific Rim, I observed highly robust processes that have taken the last 50 years to evolve to their current state. Most smaller companies I know today don’t have 50 years to get it right- which is where Six Sigma (and even Lean) comes in.Lastly, I’d like to comment on the statement “The executives never really have to learn their processes because someone else is figuring it out for them”. The one thing I can say about smaller companies is it that your competency becomes evident very fast.

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