iSixSigma

The Financial Return of Individual Six Sigma Projects, as Told by Jack Welch

Last week I attended the IQPC Lean Six Sigma Summit West in Las Vegas, Nevada (USA), as did fellow bloggers Michael Marx and Dian Schaffhauser. As with the last conference Jack Welch spoke at, he was an enjoyable and inspirational speaker with hard-hitting, results-focused advice.

This blog entry will highlight some of Jack Welch’s comments from Wednesday, October 26, 2005 on the topic of financial savings through Six Sigma. Below are Jack Welch’s exact comments from the question and answer session.

What is noteworthy about the following quotes is that they clearly display the value of individual Six Sigma projects as a deployment and leadership team matures. In the beginning of a deployment, individual projects are of paramount importance to showing early success andmotivating employees –converting as many “nay-sayers” to support Six Sigma as possible. But as the deployment matures, business leaders must find ways to use Six Sigma that go beyond individual projects.

I leave you with words of wisdom from one of America’s greatest CEOs, Jack Welch:

Without the early project by project results, you wouldn’t make the sale.

Initially…the projects counted a lot. However, if I added up all the financial savings of the projects atGE it would have added up to the gross national product of the USA. …Is our share improving. If so, I wouldn’t have cared how the individual projects were going.

Over time as our cash flows and margins improved, that’s what we looked at. Savings were coming in different forms. We just believed that in doing [Six Sigma] we were going to get better, not by adding up all those projects.

We gained 4.5 points in operating margin…but I’d never try to add it up one by one [project by project]. You can go nuts doing that.

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