DMAIC and Y=f(x) Helped Honeywell Show Savings of $600 million in 1999, Alone
Honeywell Thought It Had Taken Six Sigma As Far as It Could
Honeywell had had great successes using Six Sigma across many platforms, but they had started to slip over a few financial quarters. Due to this, they were looking at a merger with GE. GE had already implemented its own successful Six Sigma program using Honeywell as one of its models, so when they looked at the inner workings of Honeywell, they were surprised at what they found.
While Honeywell had many highly-trained Six Sigma Masters, hundreds of Black Belts, and thousands of Green Belts, it became clear that the culture at Honeywell lacked the Six Sigma model driving leadership in a way where the behaviors and discipline of the tool could fully thrive in the organization.
Honeywell had a business environment where leadership supported the people under them to utilize Six Sigma methodology, but what was really needed in order to push Honeywell to the next level was for leadership to make the organization itself Six Sigma-centric.
For Honeywell to reach their goals, it would need to have Six Sigma woven into the fabric of its existence and not be an afterthought.
Deciding To Fully Embrace Six Sigma to Its Full Potential
Prior to revitalizing its utilization of Six Sigma methodology, Honeywell had attempted a mix of two continuous improvement methods in its initial merger with Allied Signal. These two continuous improvement methods were the Malcolm Baldridge model as well as Six Sigma. This occurred because both companies prior to the merger had their own preferred continuous improvement methods, so it seemed like a natural effort to attempt to merge the two methodologies. The idea was that the Baldridge model would assess where the business could improve, while Six Sigma would be implemented to then determine the solutions. There wound up being a tug-of-war between those that were loyal to the Baldridge model and those that were sure of Six Sigma, with Six Sigma ultimately winning out.
Even though Six Sigma won out as the preferred improvement methodology utilized at Honeywell, it was not taken as far as it could be. The method was more of a wrench for fixing problems instead of serving as part of the machine itself.
Having the organization already well-familiar with Six Sigma methodology upon the proposal of the revitalization effort presented a unique set of challenges to overcome.
Reintroducing Six Sigma Had Its Challenges
One challenge that leadership faced when reintroducing Six Sigma was the feeling that there wasn’t anything new under the sun with this approach. It could even be argued that a culture had been allowed to permeate to the point where the utilization of Six Sigma was sometimes seen as a nuisance. For example, someone would work hard to get certified as a Six Sigma Black Belt and sent to see where money could be saved in the organization. This Black Belt might then go into a manufacturing plant, note excessive inventory, and then meet with the manufacturing manager about how to rectify the problems. It is easy to imagine how this type of scenario could create a culture where a Six Sigma assessor would be seen much like a health inspector visiting a restaurant. It is looked at by the restaurant staff as a stressor and that the two teams have different goals.
When Jeff Osborne was tasked with the revitalization of Six Sigma at Honeywell, he walked into a situation where Six Sigma had done a lot of amazing things for the organization, but the attitude was that the organization had done all that it could do with the methodology. Those with Six Sigma training were seen as process consultants by leadership, and many that took the training saw the certification as merely a checkmark. The change from Six Sigma serving as a tool to fix an issue to become the bedrock of the organization’s structure was going to be a major undertaking.
The Revitalization Strategy
D (Define): They had many discussions with leaders and employees to clearly define where they were headed in order to best serve their customers.M (Measure): The organization set clear objectives and goals so that they could adequately measure how the new processes would be performing.
A (Analyze): In looking at previous Six Sigma efforts, they successfully analyzed the causes of their problems and the ways things could improve.
I (Improve): By making sure of every part of the organization’s involvement, the company set about making widespread improvements.
C (Control): In making sure that, this time, Six Sigma was an all-encompassing top-down approach and that leadership was buying in completely, Honeywell was able to make sure that the process was controlled.
In order to make sure that all of the leadership was on board, Osborne introduced three perceptions that he wanted to make sure that they had. First, leadership needed to consider Six Sigma as the main strategy for generating and sustaining productivity in the business. Secondly, Six Sigma had to be seen as an accelerator for moving things forward instead of something that slowed down operations. Lastly, the commitment to Six Sigma had to be steadfast, as the company’s successes would likely not be able to be seen right away and there could be a temptation to put the Six Sigma methodology aside for short-term solutions that could wind up derailing the long-term goals. The commitment to the program would need to be longstanding.
Also integral to this top-down reintegration process was to have the executive leaders agree upon the top improvement areas to address. This utilized an equation that is foundational for Six Sigma and implementing DMAIC: Y=f(x). By understanding the inputs (x) and how they function to affect the output (y), you are able to hone in on the most critical inputs that drive improvement. A half dozen Business Ys were to be the primary focus of Honeywell’s improvement. These Business Ys were agreed upon based on their ability to naturally align.
Other criteria necessary for each Y to make the cut included:
• Will customers clearly see the benefits of the project?
• How does the project fit within the initiatives of the organization?
• If the project is not done, are there consequences?
• Is it the right time for the project?All of this effort would be for naught unless Honeywell had the right people involved. In order to make sure that they had the right team for this revitalization effort, Honeywell changed the make-up of the credentials of their personnel at all levels. Upper management, middle management, and regular employees all underwent rigorous long-term training programs with the goal of making sure that all aspects of the organization’s culture became well-versed in the methodology behind Six Sigma in order to achieve maximum business results.
A Favorable Outcome for Honeywell
3 Best Practices When Implementing a Similar Six Sigma Strategy Using DMAIC and Y=F(x) Where Six Sigma Has Been Used Prior
1. Understand the positives and negatives of what has come before
2. Strong and dedicated leadership
Honeywell realized that for its Six Sigma improvement efforts to fully blossom, there was a need for strong leadership that embraced the changes, fully believed in the process, and saw Six Sigma not merely as a way to fix issues that came up, but as a foundational part of the structure of the organization.
If you want to see the full potential of what Six Sigma can do for your organization, be sure to have strong and dedicated leadership that approaches the methodology in a similar manner.
For a real push towards long-term continuous improvement, make sure that Six Sigma methodology is ingrained into your company’s culture. Honeywell makes no illusions about how integral Six Sigma is to the way they do business and their dedication to continuous improvement. It is rather inspiring that a company that has now been doing so well for so many years can still look to how they can continue making things better for their customers.
It is also important to make sure that it is understood that real change does not happen overnight. It could take several years to see the full potential of what Six Sigma can do to improve an organization. It takes steadfast dedication to the use of the methodology to see how far it can take a business in its efforts toward improvements. Wavering for short-term gain can have an adverse effect on what Six Sigma can do for an organization over the long term.
Six Sigma and the Future of Honeywell
Revitalizing its approach to Six Sigma was a massive win for Honeywell, but it did not lead the organization to rest on its success. The company continues to embrace Six Sigma and its use as a foundational part of its organization in its continued efforts to exceed the expectations of its customers. The company sees it as its fundamental strategy to continually improve the measurement of quality as well as its productivity and growth. Six Sigma applies to every function of the organization, from the executive level all the way down. The results speak for themselves and help to solidify Honeywell’s leadership role in the industry as well as its value in the eyes of customers.
The lesson of Honeywell and how it has made Six Sigma the bedrock of its organization could serve other companies very well in how they approach their efforts to improve.