iSixSigma

Through Change, Tracking Savings Must Stay Constant

There are people who say that Six Sigma is dead – that it has no value in modern business culture. But these people are mistaking growth and evolution for complete departure. It is true that aspects of Six Sigma have adapted to customers’ changing needs over the years, but its role as a problem-solving system that delivers quantifiable business results remains. Six Sigma may be different, but it certainly is not dead.

It is important, however, to monitor the changes that take place in Six Sigma. While most can be considered improvements and are taking it in a positive direction, there are some new trends that stray too far from one of the method’s foundations – tracking financial benefits. For deployments to make an impact, these negative fundamental shifts must be averted.

Positive Change

Some changes in Six Sigma are well documented: It has morphed from a four-step problem-solving model (MAIC) to a five-step method (DMAIC). It has added a component to embrace design, creating Design for Six Sigma. It has incorporated a variety of Lean tools to become Lean Six Sigma. But through all of these changes, the intent of Six Sigma – using a data-driven approach to cut costs – has remained the same.

Positive changes occurred mainly as a result of organizations “pulling” the method to fit their needs. Six Sigma for software, healthcare, services, retail, manufacturing – each of these brandings is a different flavor of the same fruit, cultivated to suit the needs of its users.

If Six Sigma had remained completely consistent with its original incarnation from 20 years ago, it would not have penetrated different business environments as it has today. That it has evolved into something different is proof that it is alive, useful and embraced by organizations around the world. Changes like these keep Six Sigma vibrant and practical, and their catalyst is the same driver that will motivate Six Sigma to manifest itself as something with completely different labels many years from now.

Negative Change

Six Sigma is successful and perpetual in organizations that embrace it as a problem-solving method for delivering quantifiable results through projects. Recently, however, there has been a trend to dilute this project-driven and results-oriented approach by turning Six Sigma into a training exercise where success is gauged by the number of people trained, not impact delivered. This short-term approach contributes to the appearance of Six Sigma dying.

Six Sigma was never intended to be primarily a training or employee-development exercise. Training and development were necessary means to an end – business benefit through project execution. But measuring success by means of financial results as required by a project-driven deployment necessitates a discipline that organizations seem increasingly less willing to embrace.

Prioritizing, reporting and tracking the financial impact of projects are necessary elements of a Six Sigma-deployment management system. Without this type of system, Six Sigma does not become a long-term cultural element of an organization’s business strategy. The results of any deployment, therefore, must be measureable and directly tied to strategic objectives.

What’s Needed: Benefits-Tracking Discipline

Six Sigma requires discipline on many fronts, including knowledge transfer, project execution and benefits tracking. Unfortunately, in an effort to streamline a deployment effort, tracking benefits is one of the first aspects to be abandoned. Scorekeeping may feel like a waste because it does not fix anything directly and because it requires resources from a function – finance – that typically does not drive the Six Sigma deployment. But like any other process, the deployment execution must be measured in order to be managed.

A commitment on the part of the finance department is critical to future Six Sigma deployments. Companies must dedicate resources to track and report the financial impact of process-improvement projects. Six Sigma uses valuable resources, and organizations will eventually want to know what the method has delivered. Without a benefits-tracking discipline, the question will not be answered and deployments will end.

Before organizations undermine the long-term success of Six Sigma by circumventing traditional discipline, it’s important for finance to play a role – and keep deployments on the path to success.

Six Sigma for the Long Term

Where there is work, there is waste – this is the basic philosophy behind Six Sigma. Because eliminating waste requires solving problems, there will always be demand for effective solutions. Consequently, there will always be a need for Six Sigma-like methods that drive business results.

But no matter how Six Sigma changes in content or structure to suit the needs of various users, one fact remains consistent: Its success relies on a disciplined approach to tracking benefits. Any problem-solving method that lacks the ability to quantify, track and report business results will be short-lived.

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