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Implementation of six sigma: Some points to consider

Being in a risk industry i am habituated to see things from business risk perspective and to act to keep the risk low in business. My curiosity in lean and Six Sigma and my being fortunate to be in the company with some decision makers help me realize that the risk of running Six Sigma can be a major operational risk if it is not a well thought out plan.

There are cases and growing concerns about Six Sigma failures. There are examples of successful Six Sigma like General electric, Motorola, allied signal/ Honeywell, and also cases like 3M, and Hope Depot who abandoned Six Sigma.

I had discussions with some leaders who think that Six Sigma inhibits innovation, whereas some decision makers have different point of view that it actually facilitates innovation.

I am highlighting some claimed key benefits of Six Sigma and I will discuss each point objectively focusing on how to make it more adaptable and effective:

Cost savings: Industry experts link benefit of cost saving to Six Sigma. It has been observed that various organizations like General Electric, Toshiba, Allied Signal are able to realize the financial savings. However, I feel an organization should be very cautious when listening to the hefty claims by Six Sigma consultants about huge savings. A reality check should be done before embracing Six Sigma. A careful analysis of strength and weakness of Six Sigma and the analysis of organization’s resources can help to achieve maximum benefit from Six Sigma. I believe the organization must possess the required resources and competency to be successful in Six Sigma. A company can be successful in Six Sigma if it already has some quality improvement program in past. If you haven’t implemented any quality improvement program, I suggest starting from there.

Employee morale: Training and certification of Six Sigma raises employee morale as it recognizes the competency of employee.  I don’t see direct relation between employee morale through training and organization benefit. Most of the Six Sigma consultants assure certification at the end of the program. My experience says that employee sees training only as a mean to get certificates so that they can improve their resume. Customer benefit and organizational benefits seems to have taken the back seat.

Measurable in financial terms: Another benefit of Six Sigma is that it is measurable in financial terms therefore result can be measured as either success or failure. Six sigma promotes statistical thinking and method as the base of Six Sigma. I think being too data centric in approach might lead an organization in wrong direction. For example, data of spurious quality, or data resulting from poor survey might give wrong analysis.

I suggest the idea of critical thinking in business process improvement. Critical Thinking could guard the judgment from biases, bad data, wrong interpretation, and fallacies in reasoning”. Incorporating critical thinking in Six Sigma process can save organization from going in wrong direction. It can also give better understanding of why Six Sigma failed in some organization.

Structured approach:  Structured approach in organization by using DMAIC (design, measure, analyze, improve, and control) is another benefit of Six Sigma. Motorola Six Sigma methodology actually has three more phases- Recognize, Sustain and Institutionalize, which are rarely used currently. Recognizing the right project is the first phase of Six Sigma. DMAIC has got lot of attention in Six Sigma, due to its structured approach. But structured process might stifle the innovation and entrepreneurial spirit of an organization. Measurable and structured approach might not be good for an organization involved in research and development. I feel “right- brain” thinking is not used much in Six Sigma, and its usage can make Six Sigma more effective.

Customer satisfaction: Six Sigma has a customer focused approach which might result in higher market share for the organization. According to Welch, formerly CEO of General Electric, Six Sigma enabled General Electric to fulfill and surpass customer expectation. Six Sigma deals with basic CTQ (critical to quality) and miss out the factor that might delight customer, as described in Kano model.

So, my point is that simply jumping on to the bandwagon of Six Sigma without giving any consideration to the downside might not be very effective in right decision making as it will have higher degree of risk attached to it. Understanding your organization’s requirement and a critical analysis of Six Sigma from that perspective will result in a right strategy.

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