Business leaders who are considering implementing a Lean Six Sigma program need answers to a wide variety of questions. Here are the answers to the questions that business leaders most frequently ask about European Lean Six Sigma deployments.
How can I be sure that Lean Six Sigma won’t be perceived as “yet another program”?
People are skeptical about any new improvement program for good reasons. In the typical large company, they have seen initiatives come and go but not materially improve their day-to-day working lives. Those in smaller organizations wonder whether yet another staff function will be built up to support deployment, which adds to overhead costs. Europeans, especially those who work for American multinationals, will wonder, “What’s new about Lean Six Sigma, and how do we build upon our heritage of quality rather than throw everything away and start from scratch?” These are legitimate concerns that a well-conceived European Lean Six Sigma deployment can take into account and successfully address.
To help overcome the skeptics, use rapid improvement events, such as Kaizen on the shop floor or Work-Out for the office environment early in the deployment. The objective of these three- or four-day events is to identify – with the help of those who work in a specific process or area – improvement ideas that can be quickly implemented. For example, arranging work spaces to follow the work flow, or the arrangement of tools for easy access during equipment changeovers. People will then see that Lean Six Sigma helps make their day-to-day working lives easier.
To counteract the “yet another program” syndrome, make explicit the connection between past quality and improvement initiatives and Lean Six Sigma. Like all disciplines, quality practices evolve. Rather than replacing what has come before, Lean Six Sigma should build upon it.
What is the best way to communicate about the program? Should we call the program Lean Six Sigma, or position it differently?
If an organization wants people to buy into Lean Six Sigma, it has to market the idea. It must develop a communication package that everyone in senior management can use to explain how Lean Six Sigma supports the company’s business strategy. Then it must put together a communication plan that addresses the main concerns of key constituencies, includes the message the program intends to communicate and outlines how best to get the message across. Awareness sessions, cascaded down in the organization, should be used as opportunities to both educate and have a dialogue about the whys, hows and whos associated with the program. Involving professional communicators in planning a calendar of events, newsletters and website broadcasts to keep people informed is a good idea. But be careful not to oversell. Concentrate on achieving measurable results with the first projects and events; then, use those results as examples of the benefits of Lean Six Sigma.
Associating the name of the program too closely with the tools means some people will interpret the program as for manufacturing or for statisticians only. Give the program a name with which as many interested parties as possible can identify. Some examples are “Process Excellence” (Johnson & Johnson); “Business Excellence” (Siemens); “Innovation, Quality & Productivity” (Novartis); or “Right First Time” (Pfizer). Position the program as releasing more of the creative and productive potential of the organization through state-of-the-art approaches and tools for process improvement and design. Pick a name that positions the program to support growth and innovation as well as productivity enhancement.
What deployment options should I consider? Should we pilot first or go for a “big band” rollout across the whole company?
Since Lean Six Sigma is a combination of rapid improvement events – Lean activities and Six Sigma projects – any function or site can benefit. If there are structural issues, major new technology introductions or other organizational changes that are drawing the majority of the leader’s and the organization’s time and attention, then wait. Lean Six Sigma can only be successful if the function/site leader has the capacity to make it one of their top three priorities.
Before launching Lean Six Sigma companywide, an organization should have established baselines for key performance indicators (KPIs) and challenged each function and site to set ambitious improvement targets. Identify those that Lean Six Sigma can help achieve and staff them adequately. The organization must have in place a process for managing the portfolio of projects currently under way. Otherwise, Lean Six Sigma will suffer from the bottleneck of too many projects and too few resources for effective execution. For significant projects, the organization should devote and train full-time Black Belt resources. Use the positions as talent development opportunities. These individuals should be members of the local organization they are supporting, but have a dual reporting relationship to a Lean Six Sigma program office. A new Black Belt can handle one training project at a time; with experience, up to three projects can be handled simultaneously; and eventually a veteran Black Belt can handle as many as five to seven at a time.
It is normally better to begin with a pilot approach, starting where there is strong sponsorship and a receptive culture for change. This approach is preferable because most companies have to work simultaneously on KPIs, targets and a process for managing their overall portfolio of projects.
What level of training should senior executives and others have?
Sponsoring executives of Lean Six Sigma should do their own Executive Green Belt training with projects. It gives them a good level of awareness about what Lean Six Sigma is, what it requires and where it is best applied. They then can make more informed decisions about whether and how to deploy more fully. Having done their own projects, they learn the language, tools and concepts that make them better sponsors.
The next level in the organization should participate in a two-day awareness session that could include a Lean Six Sigma simulation that introduces them to the concepts, language and selected tools. During this session, KPIs can be introduced, improvement areas and candidate projects identified. Four-hour awareness sessions can then be conducted for broader audiences that want to learn more. One approach (DMAIC) should incorporate all the Lean and Six Sigma tools into one roadmap. Training materials should be standardized. Green Belt level training should be conducted in the local language. Quick reference guides can be developed for the various players involved – Sponsors, project leaders and team members. An online (e-learning) course for everyone to learn the fundamentals can be introduced when the demand is apparent.
Different Lean Six Sigma courses can be designed to fit the needs of the different audiences involved – two-day training for Sponsors, one-half- to one-day awareness sessions for all associates, two- to four-week sessions for project leaders (Green or Black Belts). A Lean Six Sigma program can collaborate with in-house training functions so it is an in-house, company-wide program.
How important is it to have key performance indicators, a dashboard of key performance measures and benchmark data?
As an organization embarks on Lean Six Sigma, the senior executive team should define a balanced set of outcome measures that reflect performance and the organizational health of the business. Baseline measures should be established and improvement targets set. Value streams maps should be created for each of the plants and core processes defined for central operations functions. Matching these maps with performance indicators and targets will point to the high priority areas of improvement against which Lean Six Sigma projects can be deployed.
The most relevant benchmarks at this stage are the current starting points and ambitions of the leaders/managers involved. Then, inter-plant benchmarking can be useful. External benchmarking is useful at a later stage when people are not defensive about performance; otherwise, too much time is spent arguing about why the benchmarks are not relevant or are inaccurate points of comparison, e.g., product mix, volume, technology, etc. Finance can be the keepers of a dashboard of outcome and predictive measures that is built up over time, typically three years. This positions them more in an improvement advisor role rather than scorekeeper only. Look for a portfolio of projects, some of which address cost and others that address the customer and employee KPIs.
How should we track the costs and benefits of Lean Six Sigma, and what kind of return should we expect?
Experience shows that a Lean Six Sigma program should cover its costs in the first year. In year two, the benefits should be twice the cost. In year three, four times the cost. This reflects an increasing return on the investment made in training. Most companies establish internal accounting guidelines and policies for tracking true costs (internal time as well as travel, consulting and training costs). Likewise, a policy should be established on what gets counted as a financial benefit – cost avoidance, expense reduction, revenue enhancement, etc.
Typically these benefits are credited to the program for one year following the closure of a Lean Six Sigma project. Green Belt projects usually yield a net benefit of €75,000 to €150,000 and twice that for Black Belt projects. The benefits also vary depending on the industry. The trend is to cluster projects around a core process to get bigger financial benefits from an optimized overall process, in which case the benefits are often in the millions.
Should Lean Six Sigma resources be centralized or embedded in the business units? Should we recruit from the outside for the program?
A small program office usually develops common training materials, coordinates training events, manages the pipeline of projects, coordinates use of outside training resources, certifies candidates (with consultants), manages communications relative to the program and advises the leadership team on the evolving deployment strategy.
The program leader and full-time project leader positions (Black Belts) can be used as development opportunities for internal talent. The organization should select people who are high potential managers already in the company. It sends a signal of the importance of the program. They have the internal networks to help get things done in the organization. They can learn the technical tools of Lean Six Sigma. It also is good to select some Black Belts who have the temperament to provide training in the future. Such in-house training reduces the dependence on outside consultants and strengthens the message that it is an internally driven program.
While coordinated through a small central program office, the Black Belts should reside and report to the site or function manager to ensure alignment with business priorities. After two to three years, rotate Black Belts and the program leaders into higher-level managerial roles with line responsibility.
How do I ensure that the benefits are sustained and lead to a fundamental change in our culture?
Leadership – steady, constant and persistent – is the most important predictor of sustained success with Lean Six Sigma. At the program and project level, provide the Black Belts with the soft skills they need to manage the people-related aspects of the projects and people surrounding the projects. These are the things that either torpedo a project or can lead to its sustained success. Be sure that measurement and reward systems are re-aligned to the behaviors needed to sustain success, including the behaviors that demonstrate the values of the company.
As Black Belts rotate into line management positions, the organization’s day-to-day business culture will become more fact-based, customer-oriented, innovative and empowering for those closest to root cause issues and creative solutions.