Failed Six Sigma efforts usually lack management commitment and attention to the investments needed to reach new levels of performance. But practical steps can be taken to maintain the focus and drive needed to reap the benefits of Six Sigma.
Some well-known companies have been “doing Six Sigma” for years. They keep conducting improvement projects in all kinds of business and support processes. They have rolled it out in sales and research and development. They are extending the application of Six Sigma to the entire value chain – suppliers and customers – in their drive for sustained performance improvement. They are successful in building the Six Sigma principles into their daily business life and using this powerful approach as a vehicle to drive cultural change.
Other companies pilot improvement initiatives like Six Sigma by running a couple of improvement projects, then recognize that the journey toward improved business results will be long and difficult. Six Sigma requires a turnaround in the mindset of managers. A post mortem analysis of a failed Six Sigma effort usually points to the lack of management commitment and lack of attention to the business and cultural investment needed to reach and sustain new levels of performance. What practical steps can be taken to maintain the focus and drive needed to reap the full benefits that Six Sigma offers?
Implementing Six Sigma Is a Project Itself
Handle the implementation of Six Sigma as a project. Balance the “soft” (cultural) and “hard” (business investments and benefits) of deployment. On the cultural side:
- Check the readiness of your organization for a complex process-excellence approach such as Six Sigma. Successful companies like General Electric and Johnson & Johnson prepared the field before they started with their Six Sigma journey. They did (and still do) competitive assessments that quantify where improvements are needed most as well as management’s resolve to lead an integrated change effort.
- To get buy-in, business leaders have to sell. If the organization has experienced a string of initiatives that were started in the past but are still open, unsolved and unsuccessful, then business leaders will have to work extra hard to win credibility for Six Sigma.
- Create and communicate a shared need in order to make sure everybody understands why Six Sigma is necessary and why it is needed now. Make sure everyone in the organization is able to find a personal benefit in the company’s undertaking. Communication is the key.
On the business investment and benefits side:
- Define mid-term and long-term goals in terms of results such as tangible and intangible deliverables and quick wins, but also in terms of investments in training, coaching and resources dedicated to Six Sigma.
- Define milestones to identify the steps for accomplishing the stated goals.
- Implement a tollgate review system to check the progress frequently. At the beginning it is necessary to measure the investments, i.e., the number of leaders, Belts and staff trained and informed, the number of projects started and the progress of each project. After a couple of months the focus needs to move from tollgate reviews toward results.
Managing Six Sigma as an investment project with expected business and cultural outcomes forces the discipline of putting “blocking stones” behind the progress that is made, i.e., institutionalizing reviews and changes in operating procedures needed to sustain the benefits that have been made.
Assessing the Six Sigma Implementation
Assessing the status quo at different stages is a key success factor in implementing a Six Sigma system. Successful Six Sigma companies have a variety of ways to conduct this assessment. One company uses its own corporate audit staff and its own criteria to audit the Six Sigma implementation. Another one has an assessment system similar to the framework used by the Malcolm Baldrige Quality Awards. Other companies link the Six Sigma assessment with their ISO 9000 audit system.
A power generation company based in Germany built its own assessment system called the “Six Sigma Meter.” The assessment was developed one and a half years along in the company’s Six Sigma journey. The deployment leader wanted to know what to do to maintain the momentum after a successful launch. He wanted to get a reading on the gaps between the “as-is” and the “should-be” status of the company’s Six Sigma deployment.
The assessment categories in the Six Sigma Meter are:
- Project Effectiveness and Efficiency
- Communication and Implementation in Everyday Activities
- Customer Impact
- Organizational Transformation
The “should-be” situation is described in detail for each of the above categories.
The category Leadership looks like this:
- Envisioned results are championed and role model for behaviors is provided.
- Priority projects are scoped.
- Leadership orientation workshops have been actively attended.
- Champions are in place.
- Process drivers and deployment minimums are defined.
- Business-level indicators are defined.
- Strategic business opportunities are identified.
The category Project Effectiveness and Efficiency checks whether projects demonstrate sustainable results in improving and/or designing new processes and products:
- High impact projects are selected.
- Projects are broken down in different categories such as Green Belt/Black Belt, Lean/DMAIC/DFSS.
- Master Black Belt development program is in place and Green Belt/Black Belt training is conducted internally.
- Black Belts have sufficient resources to complete projects on time.
- Team leaders and team members are nominated for project work.
- Results and approach are validated and publicized.
- Town hall meetings are conducted to review and showcase projects.
The category Communication consists of the following items:
- Managers are promoted based on their leadership and process competencies.
- Ongoing communication of project and rollout status is in place.
- Employee awareness created.
- Communication plan created and enrollment throughout the organization has started.
The category Customer Impact assesses the following items:
- Customers are involved in joint Six Sigma improvement efforts.
- Drivers of customer (dis)loyalty are identified.
- Systematic ways to capture the voice of the customer are created.
- Customers are invited to present their perspective.
- Customers are segmented by expected value to the company.
And the category Organizational Transformation looks like this:
- Dashboards are used in business planning and performance reviews.
- Customer and supplier dashboards are developed.
- Dashboards are used for project prioritization and selection.
- Expected process management competencies are clarified.
- Managers are trained to use dashboards as proactive tool.
- Black Belts are selected based on their performance (career path).
- Employee and climate surveys are conducted.
- Dashboards of key process measures are created and owners assigned.
- Critical processes and enablers are defined.
- Desired outcomes are selected by strategic business unit.
These top-level requirements are supported by a list of well-defined and carefully customized topics needed to achieve the overall objectives.
The method for the assessment consists of interviews with senior management, Champions, Black Belts, Master Black Belts, sponsors, shop floor employees. It includes attending team meetings and coaching sessions. Additionally, all performance indicators (the dashboard system) as well as the project database are reviewed.
The results are shown overall and per core business process. The assessments of leadership that show where improvements are needed are especially helpful. Identifying those weaknesses are the first step toward fine-tuning the implementation of changes.
The power generation company conducts this assessment once a year and has a reward and recognition event at the same time to celebrate successes.
Conclusion: A Way to Anchor Changes
The need for applying a Six Sigma assessment depends on the stage of deployment in which an organization finds itself. Experience shows that a major weakness in the process of changing an organization is that of sustaining the gains. Short-term successes are more or less easy to achieve and nice to show, but changing a culture means being able to maintain focus and drive for three to five years. A Six Sigma assessment is a way to anchor changes in the organization as well as keep the list of improvement priorities on the soft and hard side of deployment in balance. Taking a disciplined approach to the investment in an integrated improvement system that Six Sigma represents, helps ensure the 10 times payback successful companies have learned to expect.
About the Author: Uwe H. Kaufmann is a regional director of Valeocon Management Consulting. He has more than 15 years of experience in implementing process and organization improvements for various industries, predominately within the financial and service sectors. He specializes in Six Sigma and quality improvements. He received his Six Sigma Master Black Belt qualification with GE Capital and the American Society of Quality. Dr. Kaufmann is a German national with extensive international experience. He lives in Singapore and can be reached at [email protected].