In a well-managed business that has implemented Six Sigma, the organization’s objectives and strategies and continuous improvement are all closely aligned. Organizational objectives enhance the efficacy and importance of Six Sigma initiatives. And Six Sigma specialists can play an integral role in ensuring the execution of strategy.
In many organizations, however, there seems to be great confusion between strategy and objectives. Senior-level strategy meetings, as rare as they are in organizations, are often disrupted by the topic of objectives and, as a result, an understanding of corporate strategy is never realized. The execution of strategy is necessary for an organization to get to the place where it desires to be. Without an understanding of strategy, execution becomes an impossibility.
Strategy Versus Objectives
So what is the difference between strategy and objectives? Objectives are the goals that the organization strives to achieve. They are reflected in performance metrics, strategic plans, mission statements and anyplace where employees need reminding of the importance of their work. The strategy is the action plan that is going to enable the organization to achieve its objectives.
As an example of the relationship between objectives and strategies, here is an objective and its companion strategy:
- Objective: Increase the number of e-newsletter subscribers who sign up online each week by 15 percent.
- Strategy: Make signing up for the e-newsletter online a one-step process, instead of a process that requires a signup step followed a confirmation step later when the e-newsletter arrives. (And the success of the strategy will be measured by comparing the average number of new subscribers each week for the three months before the process change to the number of new subscribers each week for the three months after the change.)
Too often strategies are not executed because they are not understood. According to the Balanced Scorecard Collaborative, an educational, training, research and development firm, nine out of ten companies fail to implement strategies and 85 percent of executive teams spend less than one hour per month discussing strategy. With this lack of regard for strategy, it is no wonder as to why organizations do not achieve their objectives.
But when an organization is able to clearly establish its strategy, the entire process of implementation begins with the communication of strategy through senior leadership. Senior management must communicate the strategy to the organization, justify the strategy and establish buy-in for the strategy. Communication is a process that begins with the top of the organization and goes to the bottom.
However, the actual process of strategy execution begins with the bottom of the organization. Employees within the organizational silos perform the activities that comprise the strategy. It is through the daily activities of employees that an organization can achieve its objectives. So, just as executives play a crucial role in formulating and communicating strategy, employees are essential in executing strategy.
The Strategic Role of Six Sigma
Organizational objectives can enhance the efficacy and importance of Six Sigma initiatives. While strategy is executed to achieve objectives, Six Sigma specialists can play an integral role in ensuring the execution of strategy.
Objectives can give the utmost priority to specific Six Sigma projects. For instance, if an organization wants to improve customer satisfaction by 25 percent, Six Sigma projects related to the voice of the customer can take priority and become an important part of the organizational strategy of achieving the customer-related objective. To become a part of strategy execution in this case, Six Sigma professionals could develop customer surveys, test questionnaires, gather customer data, analyze data and establish focus groups to name a few activities. Also, some old projects can be given new life through corporate objectives. Ideas for projects that have never been supported by a Champion can be reintroduced and possibly gain support through the relevance of new objectives. By letting organizational objectives align with Six Sigma projects, Six Sigma professionals can serve as leaders in showing employees how to execute strategy.
Also, to improve the process of Six Sigma project selection for Champions and Master Black Belts, Six Sigma professionals can align the needs established by organizational objectives with Pareto’s Principle, or the 80-20 rule. Through incorporating factors such as savings, probability of success, cost and time of completion, Six Sigma professionals can find the essential 20 percent of projects that can generate 80 percent of the results that are necessary for achieving objectives. While objectives can guide Six Sigma professionals to the right type of projects, logic-based premises such as Pareto’s Principle can assist in the identification of the specific projects that are necessary for success.
While Six Sigma professionals are traditionally known for demonstrating cost savings, they also should be regarded as those who execute strategy. By building the process of project selection around the most immediate organizational objectives, Six Sigma professionals can enhance the importance of their own work and optimize their contribution to the organization’s success.