iSixSigma

Taking the Toolkit Approach: LSS with Balanced Scorecards

In preparation for an award I am accepting for being a pioneer in the CPM (Corporate Performance Management) and BI space for the work done infusing the balanced scorecard (BSC) methodology prior to our deployment of lean six sigma (LSS) , I started thinking about how many blank faces I see when I start talking about the natural overlap between the two methodologies.

There are those who will vehemently argue that there is no overlap, while others see the two schools of thought as having the potential to intersect but not without intervention — Then there are those, myself included, who view LSS and BSC more holistically — After all, aren’t they both methodologies for measuring and improving performance from either the top-down or bottoms-up vantage point? As Praveen Gupta quoted in his book Six Sigma Business Scorecard, without a strong grasp of performance metrics, a company can have no clear, quantitative indication of its quality improvements.” From this standpoint, let’s dive further into where I think Praveen fell short –> Yes, scorecards are a great way to measure project success…But it doesn’t stop there —

Instead, if you look at LSS and BSC more holistically, there emerges this kind of “proverbial toolkit” to be situationally employed to help 1) measure and improve products or processes and quality improvement initiatives…as well as 2) BSC can effectively help a deployment leader with project prioritization and selection – In fact, it is one of the 5 pathways to selecting and stack ranking potential future projects.

Handpicked Content :   Seeing the wood from the trees

The “proverbial toolkit approach” is a way to build a quality empire, one improvement initiative at a time, without tying up corporate resources or dollars – Huh?

Think of it like this: even in a pure DMAIC organization, do all six sigma projects require the rigor that DMAIC or DMADV prescribe? Well, no…Not when you add the “L” (Lean) to “LSS” (Lean Six Sigma). With Lean, comes the concepts of Kaizen & JIT (’Just In Time’), to name a few. So, should any organization who employs LSS start calling themselves a LSS with Kaizen shop? or LSS with a little bit of JIT?

Not in our eyes. Kaizen, JIT, Lean, Six Sigma all represent tools in our tool-belt; Balanced Scorecards are another tool, equal to those aforementioned in our toolkit. When a Green or Black belt is assigned a project, they shouldn’t be forced to ’pick’ a certain methodology; likewise, when a company starts planning a Six Sigma deployment, they should not force themselves to determine a % to allocate to DMAIC projects vs. Lean projects vs. Kaizens. They will end up moving the target so much to meet the needs of the business, (today, we are a 40% / 40% / 20% shop across all three methodologies; tomorrow, the business shifts slightly, and we are a 50% / 30% / 20%, etc), that they will seem like they are unsure of their program and what they are trying to accomplish . Sounds like a lot of rework to me, and if anybody should know better than to cause a lot of rework in a given process, it is the prescribers themselves, i.e. the deployment leader, MBB &/or GB / BB.

Handpicked Content :   How to Approach Improve

Instead, try looking at as a Toolkit Approach” with guidelines that mirror business rules, such that they have criteria around them defining which path would most likely yield the biggest bang for the buck without causing work to be scrapped or reworked — The following are example business rules that one can build around their process.

“If project type A is XXXX, then employ DMAIC with a black belt driving, where XXXX =

  • big and hairy
  • tried by others but without success
  • high DPMO, large gaps between VOC and VOP caused by process variability and/or defects
  • top down support and exposure
  • 4-6 month expected project duration
  • minimum hard dollar savings of $250K
  • is a red key performance indicator as measured on the executive scorecard; if it isn’t measured in the same place as the CEO or president measures their success, one should ask why they are taking it on as a black belt project; we manage what we measure, and more importantly, we measure what we manage (aka care about, to be frank)”
Handpicked Content :   Variation and special cause: Discovering the facts

If you hear someone say “we need to stop the bleeding” or “quick wins”, than you should move onto the next example since both are synonymous with the shorter, “get in, get out” projects ; Thus…

“If project B is YYYY, then employ Lean Principles with a Green or Black Belt driving, where YYYY =

  • 1 -4 month project duration
  • Process is filled with waste (think 8 wastes)
  • Cycle time deficiencies
  • Gap between VOP and VOC caused by delivery (time) delays rather than quality (though the latter may be a driver, it isn’t the focus of Lean)
  • Something than might be bottoms-up or top-down
  • Something than can be driven by a green or black belt”

“If project C is ZZZZ, then employ Kaizen, where ZZZZ =

  • 1 week project duration
  • New or improved standards can be developed and implemented during the Kaizen event window (or at a minimum, submitted for approval)
  • Can be used to supplement both DMAIC and Lean projects at two different phases of the project lifecycle:
      1. First, it can be used to help kick off a larger project from a discovery POV
      2. During the Improve phase, Kaizen events are extremely helpful when there are multiple work streams and processes that need to be improved (though each one should have their own Kaizen event dedicated to improving that individual process – If lumped together, you will be less effective at driving the improvements, as you wont have one process to walk, but many.
Handpicked Content :   To Transform, or Not to Transform – That is The Question

Lastly, no matter what type of tool you utilize based on the given criteria, you should leverage the concept of BSC and strategy maps (more to come on the latter point in a separate post). Not only can it help you select your project, but it can also be used to measure and track you GB/BB project status and performance as they move through the project lifecycle. In addition, if you are the GB/BB, as you get into the Control phase or to the point of implementing Visual Controls, SPC/SPM charts, how best to do that than by building a project related dashboard/scorecard that rolls up your outputs into the strategic goals that you are working towards improving, which if done correctly, should have come to the business unit as they cascaded down from the top line senior leadership performance indicators which should only be referencing those metrics that will shape how successful the company was at meeting their annual strategic goals & objectives.

Handpicked Content :   Goal, Metric, and Operational Definition

Stay tuned for part 2: What is a Strategy Map in terms of Balanced Scorecards, and how can they help me elevate my Six Sigma deployment to gain true visibility at the executive level in my organization…

 

You Might Also Like

Comments 5

  1. Gary

    Pioneer? I hardly think so. People were doing what you are referring to 20 years ago.

    I don’t think this diminishes your work if you did something good, but you are not on a cuting edge.

    0
  2. KEL

    Personally, I enjoyed the article. I don’t think that her intent was to claim that she is a pioneer in using this approach or that this approach is pioneering but to simply state the benefits of integrating the two from her POV.

    0
  3. Mike

    very nice. A specific hierarchy of tools is a very useful approach. It sounds like Juran’s "one project at a time" philosophy and it has the ring of something that could work well in a pragmatic way. Artificial boundaries between methodologies don’t help anyone accomplish anything.

    0
  4. PSI

    Interesting article. We can get lot of information from this article about the Balanced Scorecard and LSS(Lean Six Sigma). Very nicely explained about these two with examples. I liked this article.

    0
  5. Live Scorecard

    Aside from using the BSC, I think a live scorecard is one of the best tools that can used to effectively monitor actual performance. This type of scorecard is great because real time performance is monitored, just like a basketball game’s box score.
    We actually apply this sometimes whenever we want to focus on improving a specific department’s performance. Since it is live, you get data immediately, and you can assess it and draft methods for the employee to be more productive, making the entire companies performance better.

    0

Leave a Reply