Six Sigma, Total Quality Management (TQM) and its variants are now widespread in American business. Yet many executives raise serious questions about the their value. Fortune magazine, The Wall Street Journal and Business Week have all presented examples of serious failures. Several recognized Six Sigma companies have experienced financial troubles. On a more personal level, almost every senior executive knows a horror story of quality programs that failed. Yet there are also examples of striking success.
What Makes The Difference?
Management commitment is certainly a key success factor. Commitment is time, funding, priorities and interest from the CEO. Six Sigma requires as much from top management as it does from line workers, perhaps even more.
Coaching, encouragement and support from all levels of management is necessary. This is often the most difficult part of Six Sigma. It requires all managers to discover, for themselves, the new paradigm. Some never do. Sometimes a single well-placed and shrewd holdout can destroy a major Six Sigma or TQM effort.
Training is an issue. Training is more than sending a few supervisors off to a 3-day seminar or having the plant’s engineer give a lecture. Only knowledgeable and experienced people can create effective adult training. The classes we took in high school and college are poor models for adult learning in an industrial environment. Training also requires coaching and follow-up. The most difficult and critical step is transferring “book-learning” to the daily job.
Traditional organizations work against TQM programs. Hierarchy and privilege inhibit those who often have critical information. Functional work structures promote managerial tunnel vision. Six Sigma and TQM threaten each individual’s interest in the current power structure. Even those with little power often take comfort from their familiar place.
These are the common reasons for the failure of Six Sigma and TQM. I have seen situations, however, where the above issues were resolved fairly well, yet the results were still poor.
A Great Place To Work
In one such instance, a manufacturer of aircraft engine components attempted a cultural transformation. They hired Human Resource (HR) consultants and increased the influence, and capabilities of the HR department.
Key managers were shipped off to various “charm schools” and behavior modification programs. Everyone attended workshops on teamwork. The HR staff and the HR consultants spent untold hours in coaching and personal team building.
After five years this cultural change effort proved highly effective. Morale was high. Interpersonal and interdepartmental relations throughout the division were cordial and cooperative rather than offensive and confrontational. Turnover and absenteeism were low. The plant had a reputation as the best employer in the area. The firm had first choice for the most desirable people in the labor market.
But, on another level, success was not evident. Scrap and rework levels did not change significantly. The plant could not document even one successful improvement project. Financial improvements were infinitesimal. Sales and marketing realized no competitive advantage from the efforts.
Taylorism at the Worst
Another example is a manufacturer of heavy trucks. This firm had a long, sad and bitter history of employee relations. They openly practiced management through terrorism. Engineers and technical people dominated the culture.
One assembly plant devoted major resources to Statistical Process Control (SPC) and other technical tools. An entire department justified its existence by keeping charts. Another department busied itself with work redesign and assembly line balance. Huge computers compiled data and high-speed printers poured forth stack after stack of green-lined reports.
For this Herculean effort, the company enjoyed only a mediocre reputation for quality. They devoted more factory space to repair operations than they devoted to the original assembly. Meaningful quality metrics were unavailable. The competitive impact of this great technical effort was minimal.
These examples both illustrate an imbalance between the social and technical aspects of an enterprise. Eric Trist was among the first to identify this connection. He called it the Socio-Technical System.
The Socio-Technical System
The social system includes people and their habitual attitudes, values, behavioral styles and relationships. It includes the reward system. It is the formal power structure as depicted on organization charts and the informal power structure deriving from knowledge and personal influence.
The technical system includes machinery, processes, procedures and a physical arrangement. We usually think of a factory in terms of its technical system.
To be effective, the social and technical systems must integrate and assist one another. A manufacturing workcell that requires high teamwork will not produce in an environment of suspicion, individual rewards and command-control. Businesses where people have isolated workstations, large inventory buffers and few sequential processes have difficulty with teamwork.
The engine component manufacturer did good things with the social system. However, the firm neglected the tools, metrics and processes required to improve quality. People wanted to improve, they simply did not know how. Nor could they recognize improvement, since meaningful metrics were not in place.
The truck manufacturer has the opposite imbalance. This firm’s extensive analysis tools and knowledge are widely distributed. But the people lack interpersonal skills, common goals and trust. Nor could they hope to attain these qualities under their particular power structure and reward system.
Below is a summary of the principles of socio-technical system design distilled from the work of Eric Trist and many others.
1.0 Social System
- There is no optimum organization.
- As the environment, culture, people and technology change, so should the organization.
- When selecting people for a workgroup, strive for homogeneity in their backgrounds and work attitudes.
- Reduce wide variations in knowledge levels and variety through cross training.
- Achieve high performance through commitment rather than minimal compliance. Use more carrot than stick.
- Build commitment by involving people in the shaping of their future.
- Provide opportunities to satisfy unfulfilled higher order needs. Use the intrinsic motivators.
- Adult learning occurs primarily through experience. Integrate learning on the job through advisors, facilitators, and guided application.
2.0 Technical System
- Control variances at their source.
- Ensure that the detection of a variance and the source of that variance occur in the same work group.
- Maintain quality by detecting variances in the process rather than in the final product.
- Monitor inputs as carefully as outputs.
- Size work buffers large enough to allow problem solving but small enough to prevent problem avoidance.
- Match technological flexibility with the product mix.
- Match technology scale with production volume of the work groups.
- Design the Socio and Technical systems simultaneously and jointly.
- Give workers larger and more varied tasks and increase cycle time.
- Integrate support functions within work groups to the largest possible extent.
- Optimize the system rather than the system’s components.
- Begin and end a work group’s technical boundary at a discontinuity in the material transformation process.
4.0 Managing The System
- Allow teams to manage the daily work.
- Coach and facilitate rather than supervise. Coaches should manage the team boundaries.
- Upper management should set goals, supply resources and manages the culture.