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Lack of Six Sigma Strategy?

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  • #33460

    SSS
    Member

    Do you know how many companies have failed deploying Six Sigma due to the lack of strategy?  And, do you know the financial impact of doing so? I’m wondering if anyone has done a study on this topic.
    Definition of lack of strategy:
    1) Train Black Belts before Champions.
    2) Train Black Belts without projects.
    3) Do not select/train Process Owners, Data Owners, Subject Matter Experts, Green/Yellow Belts, Financial Rep.
    4) Launch Six Sigma without a pipeline of well-defined projects.
    5) Launch Six Sigma without valid data & measurement systems.
    6) Launch Six Sigma without: performance management process, career path, leadership development, compensation strategy for Black Belts, communications & change management strategies.
    7) Launch Six Sigma wihtout a robust “Financial” management and reporting system for Six Sigma.
    8) Follow the 1% rule because everyone does it.

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    #90502

    Mikel
    Member

    You forgot #9 – confuse doing Six Sigma with having a strategy

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    #90508

    Anna O’Connell
    Participant

    Dear SSS –
    Or as they used to say where I worked before – “Failure to plan is planning to fail.” I hate it when people do that. 
    While it did get better over the almost 3 years I was there, Ford started their 6 Sigma program by making almost every mistake on your list, plus a few unique to their (dis)organization structure.  The one that had the most negative impact on me and my projects was encouraging turf and “credit” battles between the folks doing “lean/Ford Production System” and 6 Sigma projects, up through the plant manager/ops manager level. 
    And their project selection process was pretty awful for the first year, got better, then, because of turf battles over who “owned” the BB’s time and headcount, went to even worse.  Huge amounts of time and talent were wasted on local (sub)optimization and political infighting. 
    You have the outline here for a book on  “How Not to Implement 6 Sigma Effectively”.  Are any acquisitions editors reading this list?  Do you want a co-author?  
     Anna O’C

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    #90524

    SSS
    Member

    Anna,
    You added “political fights” to the list of “lack of strategy” definition. Thank you.
    I posted this question to get some statistics on the number of companies that have failed and the financial impact (including the opportunity cost of doing it right the first time) associated with the lack of strategy.  If there is no valid data on this topic, then I would definitely support your recommendation to write a book or at least conduct a comprehensive research study.
    The question for the Six Sigma community remains: How many companies have failed deploying Six Sigma due to the lack of strategy and what was the financial impact associated with it?
    Many thanks,

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    #90536

    Raja Setlur
    Participant

    Anna,
    You are at the head of a long, long queue!
     

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    #90542

    Dr Abhijit Purohit
    Participant

    As I have understood, some strattegy is required to make people thinking and working in this direction. Six Sigma should not be a goal, it is a journey towards excellency and continual improvement.
    Abhijit Purohit

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    #90549

    Ron
    Member

    You forgot bought the cheapest six sigma package from the cheapest consultant. That usually scores real high on the I failed category.  Fisrt Data Corp is a good example of a good start but a poor follow through do to lack of an established infrastructure and poor candidate selection.

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    #90560

    CSSBB
    Participant

    SSS- You are not going to get a number. What you are going to get are anecdotal stories about peoples’ experiences at the companies for which they work (or worked). No one has the answer to the question you are asking. Also, from an analytical standpoint, you are lumping multiple variables together and implying that any one of them associated with ‘failure’ is cause and effect and that all the other variables are cause and effect.  Also, how are you defining ‘failure’ ? It will be interpreted differently by everyone reading this.
    This might be a good survey opportunity if we can get some definitions .

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    #90571

    Billa
    Participant

    What happened at First Data Corp?

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    #90578

    SSS
    Member

    CSSBB,
    Great point… failure is a function of these variables listed and more variables that have not yet been listed.  Great point CSSBB. Sadly you confirmed my assumption that there is no research behind this topic. Unfortunately, the lack of research (valid data) could have a downstream impact on companies that have not yet deployed Six Sigma and are looking to minimize the risk of doing so. Also, the Six Sigma community suffers, as more and more corporations blame Six Sigma rather than Management or strategy.
    One more question for ya: If there is no valid data (# of companies and financial impact), then how can WE (The Six Sigma Community) help new companies deploying Six Sigma minimize the failure rate?

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    #90579

    AJ
    Participant

    Your definitions of failure are interesting if nothing else.
    Launch Six Sigma without a pipeline of well-defined projects.
    Launch Six Sigma without valid data & measurement systems.
    Launch Six Sigma wihtout a robust “Financial” management and reporting system for Six Sigma.
    We consider the time that training began as the time that we “launched” Six Sigma. It would have been difficult to develop a pipeline of well-defined projects without knowing what constitutes such a thing.
    Similarly, from this training we learned to conduct a Measurement System Analysis (MSA) for EVERY project, and also learned how to discover and fix the “holes” in our Financial management and reporting strategies.
    So it would appear from your definition that we have failed in our deployment (despite savings of several million dollars annually form projects over the past 2 years).
    As I said…interesting.

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    #90580

    SSS
    Member

    BINGO!  Ron, thank you.. I cannot believe I forgot about vendor selection as one of the key drivers. In terms of vendor selection I think the prices are pretty much the same for “common” drivers such as Black Belt training, Champ training, Executive training. However, the real difference between “price” and “cost” comes to play when you deal with the “key” drivers of a successful Six Sigma deployment. Key drivers to me are: 1) time to learn about our companies & culture; 2) flexibility to use our companies’ examples and data during training; 3) personalized service… etc.  I have had one good and one bad experience.   Thanks Ron, great addition to our list.

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    #90583

    SSS
    Member

    Dr. Purohit,
    Thank you for your contribution. I understand your philosophical point of view and agree completely with it. However, strategy is direction. And direction is required in order to create a successful and less painful Six Sigma journey. Think of you as Arquitect of your own new house. Wouldn’t you work on every single detail before you move into your new house? People who have deployed Six Sigma and felt the pain & paid the price of “not thinking” ahead are now working on making sure future Six Sigma deployments are successful. 
    What I’m getting from this very interesting discussion forum  is that there is no research behind the failure. Now, what are WE (Six Sigma community) going to do about it? Do we care?

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    #90585

    NKKhoo
    Participant

    “You forgot bought the cheapest six sigma package from the cheapest consultant. That usually scores real high on the I failed category.”
    Are you telling me that expensive consultants will make Six Sigma a guaranteed success? This is one of the blind spot in any project! Competent consultant or leader is a keyword you have overlooked.
    Do you believe 4-week black belt program can produce a true leader? 
    How many CEOs in listed companies can see 3 or 5 years improvement program get through before they get axed for the short-term quarterly financial results?
     

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    #90586

    SSS
    Member

    aj,
    This is very helpful. Thank You. It’s so nice to know that there are successful companies out there that have managed the lack of few X’s and remained successful. Like someone said.. It’s not one, but the combination of all these variables that contributes to the success/failure of Six Sigma. When I was a Black Belt, I went to training without a project… but managed to find one and complete it successfully.
    In terms of the lack of a pipeline of projects before the trainins starts, I think that it depends on your project selection strategy and deployment model. Since project selection/scope is an on-going/never ending process, companies can start the process at anytime. However, I still believe the earlier the better.
    In terms of data or lack of, I think that no data no Six Sigma. Because the lack of data has a direct impact on cycle time of projects, if a company did not have valid data to begin with, then its Black Belts would have to spend time validating the data or building measurement systems or both as part of their Black Belt project. If so, then longer cycle times of project could be expected, affeting negatively the initial financial forecast.
    There are many “interesting” ways to define failure.. Cycle time of projects could be one of them.

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    #90603

    DebraM
    Participant

    I did a study on failure to reach positive return on investment for process improvements and introduction of new technologies including six sigma projects – much of it published in  “Metrics for Successful Transitions” by Debra Mallette and Warren Brown – presented at the SEI SEPG in 1999. Many of the metrics were Six Sigma demonstrations. I found that our experience as an organization was identical to Everett Rogers findings in “Diffusion of Innovations” for technology adoption by a population.  Geoffrey Moore also refers to this work in “Crossing the Chasm” and “Inside the Tornado”. Using Moore’s terms,   more than 80% of our improvements fell into “the chasm” at effective use or adoption by <20% of the targets. 
    We also found that our experience for investment in deployment and institutionalization was accurately described by Peter Keen in “The Process Edge”: the design of the improvement represented  20% or less of the resources necessary to achieve institutionalization and most of the improvements were risk mitigation efforts not addressing processes critical to our identity – in effect insurance policies rather than substantive changes effecting our competitiveness. 
    What’s more, fixed costs start with deployment and the returns from controlling the variability appear to hit break-even at effective use by around 40% of the target population.  There are more fixed costs necessary to assure use by the late majority and economies of scale effects should add to the boost the returns. 
    We found that we failed to make this investment and showed a plateau at 60% target user effective use for half of the improvements that we got over the chasm. 
    Over a period of 4 years, we invested 3% of our resources in designing and deploying “improvements” that added to our fixed cost basis and failed to return enough benefits to break-even. We had an enormous amount of unproductive WIP clogging our pipeline. 
    More to your question, we found that lack of strategy was not a primary risk factor – again similar to Rogers’ observations.  Instead, the primary risks, accounting for more than 80% of the failures were: (1) a change in the sponsorship chain before institutionalization is achieved. When the primary sponsor was promoted (fired, left the company,…) and replaced, we learned we no longer had a change program – we had an idea looking for a sponsor, (2) declaration of success with roll-out – rather than declaration of success with effective use by more than 40% of the target population.  The late majority simply out-waited the improvement momentum (3) failure to address organizational change risk factors including target resistance, culture resistance and resistance due to history.  (Although a it could be argued that a clear strategy is essential to address target resistance) (Reference “Changing the Way We Change” by Jeanenne LaMarsh). and (4) failure to design the change to the organization – not just the changes to the process and tools, also the changes to roles/responsibilities and reward/reinforcement mechanisms. 
     

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    #90612

    Ron
    Member

    All Six Sigma training is not equal. Like most industries their are people involved that don’t really understand the principles of what is required to have a successful six sigma implementation.
    After choosing the wrong consultants they then lack proper infrastructure to ensure success.
    Currently Microsoft is in this situation. A lower level manager is attempting to start six sigma at microsoft without proper infrastructure of knowledge of what is required.
    Failure is looming large in this particular application.
    It is best to look at companies where it has succeeded and emulate their approach.

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    #90613

    AJ
    Participant

    I agree entirely that no data=no Six Sigma, and also that project length is impacted by (amongst other things) time taken to validate the measurement system.
    That being said, I would rather take time within the Measure phase to make certain that the MSA indicated the data to be sufficient to support the project, than to discover at the end that conclusions were based on unreliable data.
    Clearly, the cycle time of my projects might (will?) suffer, but by allowing for the activity within the project charter, it is not an unexpected event for either the Champions or process owners.
    As noted, combination of several factors within your list would clearly jeopardize success, however some appear to be much higher as “Red X’s” than others.

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    #90615

    redraider
    Participant

    This is a very interesting thread.  What you have described is the reason any quality initiative fails – not just Six Sigma.  Unless there is adequate infrastructure in place to support the initiative, you might as well pack up and go home – it ain’t gonna work.
     
    Number one cause of failure for any quality system – easy answer – lack of education about what quality is, how long does it take, what can you expect to see along the road, etc.
    I have found that if it doesn’t show results in six months or less, then management gets bored and tells you to move on.  What is needed is good understanding on the part of the leaders – realize it takes time and effort , and be willing to stay the course.
    My two cents worth RR

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    #90620

    NKKhoo
    Participant

    Motorola’s formula in the old days before Christopher Galvin took over CEO: train, retrain and retrain all employees with strong commitment from the top management. They have an unwritten policy of no retrechment in the old good days.

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    #90622

    am
    Participant

    Another aspect of Six-Sigma that concerns me is the excess importance given to it. Any improvements which are not molded through a Six-Sigma project is not as much appreciated by top managements. This promotes managers to wrap up small improvement projects as green belt projects and spend more time and resources to make the project successful the Six-Sigma way. Such small and wrongly selected projects take away the edge created by good successful Six-Sigms projects. I think a company which fails to identify the fine line between a improvement project and Six-Sigma project will loose the financial gains in the long run.

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    #90625

    AJ
    Participant

    am,
    I agree whole heartedly. In fact, if I were to identify any evidence of failure within our organization, it would exactly be dilution of the power of the Six Sigma process by erroneous inclusion of what are simply continuous improvement projects under the blanket Six Sigma umbrella.
    We have several of the “if you know what the root cause is just go fix it” type projects that have been included as evidence that our Six Sigma process is working. While I think the process IS working for us by and large, your caution regarding the long term effects is well taken.

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    #90626

    Trev
    Member

    It’s a doubled edged sword.
    “If you know the root cause, go fix it.” How many times have you known someone to go and fix it, only to find out that they didn’t know the true root cause, didn’t apply the best fix, or didn’t fix everything needed? The application of a rigorous problem solving methodology, while seeminly more labor intensive than “go fix it,” will end up saving your company time and money in most of the cases.

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    #90627

    am
    Participant

    Yes its important to identify the true root cause of the problem before improvements, but we have simpler tools like 7 step problem solving methods. I think a Six Sigma project would simply add cost in solving such problems.

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    #90629

    NKKhoo
    Participant

    Six Sigma sudden “resurgent” in recent year is really caught me in surprise. I had worked together with Motorola’s guys since earlier 90s and I had never felt using Six Sigma methodolgy was something so great. Everybody is expected to follow DMAIC kinda way in everything we did and it’s a part of the company’s culture.
    I had ran a numerous imprvement projects without using any Six Sigma jargons or terms like black belt or whatsoever fancy terms. Our top management (all are ex-Motorola’s managers) were very supportive in providing good training and retraining courses. It was company’s policy for all engineers and managers being trained and passed SPC and DOE, a pre-requisite for annual performance review.

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    #90632

    NKKhoo
    Participant

    Agree, people need to strive the balance. You do not always need to have DMAIC to solve a problem. If you can fix it, then just fix it on the spot. Many problems can be solved without going through Six Sigma methodology or DOE. 
    I did remember I drill a group of engineers for a 2-year chronic “wire broken” quality issue. This <1%  wire broken problem was one major quality issue to end customer. The previous QA manager was axed by the customer!
    When I was engaged by that company to untangle the issue, the first thing I did is asking the engineer to demostrate their process in step by step to me. As I expected, those engineers could not demostrate their process and blatantly blamed the operators as the “root cause”.
    I gave them another a half day to “re-learn” their process from first line operators and wanted them to demostrate to me again. During the demostration, I threw many tought questions to them by asking 5 WHYs. I told them the root cause definitely was not operator related after getting some clues from this Q and A session though I had never seen their process on the production floor.
    The engineers then went back to the line and study the process in details. In the follwing day, they came to see me and suspected a sharp edge on the fixture is a probable cause. I asked them to grind off the sharp edge to confirm the hypothesis.  Believe it or not, a chronic quality problem was solved within one or two days of investigation.
    The morality is if you can fix it, then just fix it provided you must tackle the root cause(s).
     

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    #90634

    kw
    Participant

    NKKhoo,
    Right on the money!!! That’s why we will never use SS again!
                                   KW
    REMEMBER….QUALITY IS EVERYTHING

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    #90638

    NKKhoo
    Participant

    I still believe that Six Sigma systematic approach is useful for companies. Sometimes “just fix it” method cannot solve a complex problem such as process optimization for plasma etching process. I have seen engineers from a fortune 500 company did a factor at a time experiment on this kind of complex process.

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    #90643

    KHALIL MIRKHANI
    Participant

    Dear friends
    based on discussions above It seems that companies should have at least 2-3 month/ one year training priod befor setting the six sigma strategy.but we need to recognize that may be six sigma is not a strategy and it is almost a nesicity. so I’d rather then ask witch strategies may support six sigma implementation in one company?
    I suppose the most supportive strategies are:
    1-cost reduction
    2-people empowerment
    and 3-TQM.
     

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    #90646

    DaveG
    Participant

    Your story reminds me of my job as a Supplier Development Engineer in an Automotive plant where a single nut was chronically cross-threaded, regularly slowing down a high-volume cell.  The problem existed for months before I went to work there, and the supplier, a distributor, had done nothing but make excuses for the poor quality.  I arranged a trip to the nut manufacturer.  Within 1 hour of my arrival, the manufacturer told me the design was prone to failure, I found out the distributor’s purchase orders to them referenced a drawing which was not my employer’s, and the root cause of the failure was the mis-installation of a specific piece of tooling – which none of the manufacturer’s representatives I initially met with were aware of;  it only came up when I walked the floor and showed the defective part to the setup man!  They delivered nothing but perfect parts for the next 6 months (I don’t know what happened next, since I was laid off).

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    #90710

    SSS
    Member

    I’d like to thank all of you for your contribution to this
    discussion topic. I will try to summarize your opinions and
    contributions.Thank You
    SSS

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