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The Six Sigma Revolution

How General Electric and Others Turned Process Into Profi ts

by George Eckes

274 pages

• Inspection is an inherently ineffi cient technique for attaining high quality.

• Many consultants have made Six Sigma appear more diffi cult than it really is.

• To work, Six Sigma must have the complete support of management.

• Change management is essential to the successful introduction of Six Sigma.

• Avoid the tendency to jump to a solution as soon as you have identifi ed a problem.

First, conduct a root cause analysis.

• Decide how you will observe and measure the increased effi ciency of the process

under review.

• Once you know the essential measurements, assemble your “dashboard of data”

— the statistics you need to watch.

• Either a lack of statistics, or a fi xation on them, can doom a Six Sigma initiative.

• Before you change a process, identify the customer benefi t.

• Creating “black belts” is a good idea, but management should not put the entire

responsibility for Six Sigma on their shoulders.

8 9 7 8

Leadership & Mgt.

Strategy

Sales & Marketing

Corporate Finance

Human Resources

Technology & Production

Small Business

Economics & Politics

Industries & Regions

Career Development

Personal Finance

Concepts & Trends

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Relevance

What You Will Learn

In this Abstract, you will learn: 1) How to launch a Six Sigma quality control process;

2) What measurements and information you need; 3) How to focus improvements on

business objectives and customer needs; and 4) How to troubleshoot common problems.

Recommendation

George Eckes’ experience in quality control includes an instance where he had the

temerity, just out of college, to ask W. Edwards Deming, then an octogenarian, to

elaborate on his views about quality. “Those are the most stupid questions I have ever

heard! Go read some of my books,” the cantankerous quality czar responded. No one

reading this volume can doubt that Eckes has done his homework ever since. His blend

of experience, theoretical expertise and common sense make this a very effective Six

Sigma manual, although it is a little light on case studies. One of the book’s most valuable

elements is Eckes’ keen analysis of the pitfalls that can fl ush all your best Six Sigma

intentions down the tubes, even as a row of consultants tell you it is a panacea for all your

woes. getAbstract.com recommends this book to anyone who is about to call a consultant

and venture into the Rasputin world of Six Sigma.

Abstract

In the Beginning…

Building a better mousetrap would be simple, except for the fact that your competitors

are all trying to do the same thing. You need to bring the mousetrap in on time and under

budget, and simultaneously you have to keep your current mousetrap-selling business

running well and earning profi ts. If you seek a competitive advantage in the real world

marketplace, you must constantly improve product and service quality.

Historically, U.S. companies have relied upon inspections for quality control.

Unfortunately, this is a highly ineffi cient method, which is only competitive if your

competitors use it too. Improving quality became a frenetic effort in U.S. management

circles in the 1980s. Anything that might work was worth a try as U.S. industry

endeavored to remain internationally competitive. The results: many quality approaches

work to some degree, and the most effective methods are based on concrete measurements

of success or failure.

For the Six Sigma quality improvement process to work — and it has been made

to appear much more complex than it is — management must back the initiative

wholeheartedly. The secret to doing so is “Business Process Management,” which

becomes the vehicle by which management at all levels undertakes and sustains active

involvement. Key elements include:

• Establishment of strategic objectives for the business.

• Determination of core processes and sub-processes that enable the achievement of

the strategic objectives.

• Identifi cation of the key players in those processes, that is, the process owners.

• Determination of the key measures for gauging process effectiveness and effi ciency.

• Collection of data.

“What makes Six

Sigma different, in

part, is its focus on

the involvement of

management at all

levels of an organi-

zation.”

“While many ap-

proaches to im-

provement can

work, fact-based,

data-driven im-

provement is best.”

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• Establishment and use of criteria for which projects to select.

• Ongoing management of the essential processes focused on strategic objectives.

The second necessary component of the Six Sigma system involves “Process Improvement

Methodology.” This covers both process improvement and the wholesale creation of new

processes. One solid approach, popularized by General Electric (GE) and several other

organizations, is called DMAIC. The acronym stands for:

• Defi ne — Determine what customers need from a given process, and map the pro-

cess so improvement can begin.

• Measure — Defi ne ways to gauge how effi cient a process is.

• Analyze — Identify the process’ shortcomings; ask how to alleviate them.

• Improve — Create and implement a solution.

• Control — Once you have a better mousetrap, keeping the process operating consistently

so that quality doesn’t drift. Gather and analyze data to verify proper performance.

Each of these facets of Six Sigma implies, or introduces, the notion of change. Without

change, process improvement cannot occur, and without process improvement, there can

be no Six Sigma. Thus, the concept of managing change is critical to any Six Sigma

discussion. The normal human response to change is resistance. Be prepared to work

through it. Too many change initiatives fail due to an improper, imbalanced application of

resources. Generally, too many resources are committed to the technical aspects of change,

while too few are committed to ensuring that people accept the change initiative itself.

Any quality initiative needs management’s active support to survive. And, managers

will only support a quality initiative that is a vehicle for achieving business objectives,

so introduce Six Sigma with that focus. The idea is to make a process work better, in

whatever way or by whatever measure management may employ. Quality improvements

should enhance your organization’s effi ciency. What does being effi cient mean? How do

you defi ne effectiveness? Base your answers on your customers. The goal is to meet or

exceed customer needs.

Taking Your Company’s Pulse

Each process must measure its own effectiveness. If no measurement can tell you

accurately how well a given process is working, you can’t know if it’s working

properly. Once you know what measures you need to track, and how to gather the

data, begin creating your own “dashboard of data.” This dashboard is analogous to the

instrumentation readout on the dashboard of your car, a convenient place to take a quick

glance and see how the vehicle is operating. Is the car going too fast? Is the engine

temperature normal? How much gas is left? How many RPMs are you generating? Such

an approach assures that managers always have the data they need to understand how

effi ciently the organization is operating.

Companies tend to make two classic mistakes when assembling their dashboards. One

is collecting the wrong data. The second is collecting too much data. Data overload can

be just as debilitating as gathering the wrong information. Imagine a data dashboard a

mile long. All you want to know is how fast you’re going, yet you must take your eyes

off the road and pore over that dashboard for hours, looking for the right gauge — not a

very safe way to drive! The best approach is to measure only those factors which really

matter to your customers.

To be meaningful, effi ciency must lead, directly or indirectly, to greater customer

satisfaction. Unless a process brings about a desirable result from the customer’s point

“Failure to manage

change in the Six

Sigma organi-

zation will result

in substandard

results, if any.”

“The emphasis on

being customer

focused must

extend to the inter-

nal customer.”

“Many Six Sigma

consultants are

statisticians. To

hear them in a

seminar is to

believe better

quality is the re-

sult of more com-

plex statistics.”

“It’s like creating

a Rasputin in your

organization, think-

ing that greater

profi tability comes

from turning your

business over to

consultants who

know something

you don’t.”

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of view, your organization risks becoming extremely effi cient at generating a product

or service that, unfortunately, is met with little or no marketplace demand. Customer

relevance is critical, so companies of every ilk embark on extensive continuous efforts to

fi nd out exactly what their customers desire. Knowing what your customers want is the fi rst

step in designing a process that helps your organization meet clients’ needs effi ciently.

Old hands at Six Sigma will tell you that much of its success depends on which dragons

you choose to slay. In other words, out of the myriad of potential improvement projects,

how do you know which issues to tackle fi rst? The answer is simple: fi rst undertake

those initiatives which promise to have the biggest impact on the organization’s ability

to accomplish its business objectives. This is particularly crucial at the beginning, to

demonstrate Six Sigma’s impact.

With its emphasis on measurement and data, you could say that Six Sigma uses the scientifi c

method to achieve quality improvement. However, measuring customer satisfaction is only

one aspect of successful Six Sigma. The other aspect is cultural. You must inculcate your

corporate culture with commitment to the never-ending pursuit of perfection.

Start-Up

You can’t pass go without management support. Given that, keep these elements in mind

as you start your initiative:

• Select project team members based on their ability to improve the process under

review. Project teams usually last for about six months.

• Don’t initially jump to a discussion of solutions. The team should fi rst create a spe-

cifi c, measurable problem statement that describes the project’s desired impact.

• Management must provide guidance on the project’s boundaries, the “project scope.”

• Focus on the process under review; identify its internal or external customers. Create

a map of how the process currently operates before you try to change it.

These steps are particularly valuable within a customer-focused company. Such companies:

• Think about and talk about their customers frequently.

• Continually assess their customers’ perceptions.

• Resolve issues in a way that will benefi t their customers.

• Make sincere amends to customers who have service issues.

• Make any changes necessary to maintain service levels.

If you’re going to change a process, your customers must be willing to pay for that

change. Indirectly, customers pay for each step in a given process. To make sure you

are really fi xing the problem from the customers’ point of view, conduct “root cause

analysis.” Rather than addressing an issue on the surface, drill down to the root cause.

If you own a coffee shop and your staff is overwhelmed by testy customers during the

morning rush, maybe you need a separate team just to fetch donuts while other staffers

serve people and work the register. But, more staff may not solve the problem. Maybe

what really irks customers is the crazy traffi c pattern in your parking lot, so they are

already aggravated when they walk in the door. The most pivotal step in analyzing a

problem is verifying the root cause.

Another often-overlooked step is consolidating the gains you make. Make sure your

solutions stick. One key is proper documentation that explains the improved process

“Both at the stra-

tegic and project

level, Six Sigma

works because of

its rigor and disci-

pline.”

“Effectiveness is

meeting and ex-

ceeding the needs

and requirements

of the customer.”

“Effi ciency is the

time, cost or value

of the activities

that lead to cus-

tomer satisfaction.”

“Each process

must measure its

effectiveness and

effi ciency.”

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in specifi c detail, so that even employees without formal training can implement it

and maintain the improvements. Emphasize consistent performance throughout. After

you’ve done all that hard work to reform a process, make sure that you preserve and

institutionalize your gains.

Troubleshooting

Six Sigma initiatives can run into trouble several ways. Beware of these potential pitfalls:

• Getting hooked on numbers — Management can become more fascinated with sta-

tistical measures than with the actual process. Management must realize that better

quality does not come about through the use of more sophisticated statistics.

• Focusing only on cost — Don’t use Six Sigma exclusively to attain cost reduction. Cost

is just one factor in the equation, although it is clearly important. Avoid diseconomies;

don’t be so focused on cost that you overlook opportunities to add customer value.

• Ignoring the culture of change — Six Sigma’s cultural element is crucial. Your

employees must be convinced that they are, individually, in the change business.

People who believe that process improvement is not their job create problems.

• Ducking root cause analysis — Six Sigma also can fail if teams take a sloppy

approach to root cause analysis. The natural tendency is to jump from identifying a

problem to fi nding a solution, without fi rst addressing the root cause. You may solve

a symptom, but you’re leaving the disease unchecked.

• Slipping up on soft skills — Pay attention to the so-called “soft skills” of communica-

tion and human interaction. Great statistical measurements won’t do you much good

if people lack meeting skills, cannot communicate and are not able to work together.

• Blaming the black belts — Designated, trained Six Sigma leaders, who are called “black

belts,” can accelerate the adaptation of Six Sigma methods. A greater danger, however,

is that the entire responsibility for the Six Sigma program will be dumped in the black

belts’ laps. That’s a huge blunder. Management must accept ongoing involvement.

Six Sigma is ultimately a way to change an organization. As such, it must be as carefully

managed as any other change initiative. For maximum results, account for the likelihood

of resistance and encourage participation, enthusiasm and involvement.

About The Author

George Eckes’ Six Sigma client list includes General Electric, Lithonia Lighting and

Volvo Trucks North America, to name a few. Since 1996, the Colorado company he

founded, Eckes and Associates, Inc., has served as the primary consulting organization

for General Electric’s Six Sigma quality initiative. The consulting group specializes

in quality improvement.

Buzz-Words

Business process management / Change initiative / Dashboard of data / Process

improvement methodology / Project scope / Root cause analysis

“Projects to im-

prove quality

should be select-

ed that have the

greatest impact on

the business ob-

ectives of the orga-

nization.”

“Project teams

need to establish

the customers of

their project and

what customers

require of the pro-

cess targeted for

improvement.”

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