Will the Real Six Sigma Please Stand Up?
From its moment of inception, Six Sigma was considered revolutionary. The six original pioneers who implemented the methodology at Allied Signal - the only true Senior Master Black Belts - vowed that the system would unearth inefficiencies in business operations that lead to outrageous margins of errors and extraordinarily wasteful operating costs. The quality of a company's service would improve, they said, saving an estimated 20-40% of budget in cost of poor quality (COPQ).
The system soon delivered everything the pioneers had promised. Once Six Sigma was introduced to General Electric CEO Jack Welch, who gave the methodology his unabashed endorsement, there was no stopping the flurry of executives wanting to take the fast track to vastly improving their company's bottom line.
The rapid and widespread acceptance of Six Sigma and its phenomenal success has sparked a veritable stampede, an avalanche of self-proclaimed Six Sigma "experts" all claiming to have the knowledge to put the methodology into action. Expectations frequently fall short, however, because although some of the practitioners are authentic - having been personally trained by genuine Six Sigma Master Black Belts - others are imposters who do not fully understand or practice the true Six Sigma methodology.
Though the product being distributed by self-proclaimed experts does not have enough substance to yield optimal results, it does contain enough information to be dangerous. The intellectual property looks credible enough to fool a novice and even generates excitement about Six Sigma implementation. In truth, however, what's being disseminated now are altered, covered-up and watered-down versions of the original success model - mechanical, recipe thinking diluted from the true independent problem solving that once existed, morphed by the knockoffs. Essential tools are being misapplied, resulting in less-than-stellar performances.
Corporate managers are no longer clear about what they are entitled to when opting to implement Six Sigma. Often, disillusioned CEOs walk around like the emperor with new clothes, shrouded in a false sense of security, thinking their system is everything they've been told it should be. They remain unaware until the dire reality of their situation becomes apparent: the numbers don't add up and there is a huge gap between the savings promised and those delivered. True practitioners are increasingly called upon to rekindle a failed Six Sigma deployment in order to obtain the original content, including Black Belts who are "Radical Thinkers" empowered to look for and solve problems.
Consider the case of a current client of mine: a $40 billion company that hired a self-anointed "Black Belt" to implement what he called Six Sigma. Over the course of three years, the company should have easily surpassed $250 million in savings. Instead, it measured a pathetic $20 million in cut costs, less than 10% of its potential savings.
This company's Six Sigma deployment failed on many fronts: company leaders neglected to take an active interest in the system (never meeting a single Black Belt or even relaying their support of the effort), too few resources were committed to the initiative (only 10 Black Belts were trained out of 20,000 employees), and there was a lack of reinforcement and control for sustainability (a year after deployment, only seven part-time Black Belts remained).
The cost and energy to clean up such a failure is akin to reviving a patient that has flatlined: it can be done, but the uphill battle to accomplish it affects everyone, taking its toll on all parties involved and costing a tremendous amount in terms of time, money, energy, and certainty. The company's failed attempt to deliver on its promise diminishes shareholder confidence and employee morale, leaving both groups reluctant to attempt a second deployment with any degree of enthusiasm. Then, of course, remains the task and expense of contracting a second team to deploy the system, not to mention what it cost the first time around and the opportunity costs in doing it incorrectly.
Clearly, to achieve the full benefit of Six Sigma and unlock the untapped potential of your organization, it is crucial that corporate managers choose authentic teams to lead their deployment. However, distinguishing the genuine articles from those who just hang out a shingle can be difficult. With so many imitators professing Six Sigma expertise, business professionals need a scorecard to keep track.
Now there is one. The Six Sigma Scorecard features guidelines that help company officials ascertain whether their Six Sigma deployment team is up for the job or simply playing dress up.
Corporate managers can gauge prospective Six Sigma consultants (or former ones if disappointed by Six Sigma results) by measuring them against the following five tests. Those who pass all five are probably the real deal and have earned the right to please stand up. Those who don't should remain seated.
The Six Sigma Scorecard1. The Walk-Away Acid Test. Six Sigma is only one tool for growth. The primary goal is to abandon typical, recipe thinking and replace it with radical thinking - a top-to-bottom, zero-base rethinking of how the company is managed and how its business is conducted. A true Six Sigma provider has the ability to challenge C-level executives into rethinking the existing business model and strategy to drive growth. If the CEO does not endorse the program, the Six Sigma firm must be willing to walk away from the implementation because it will fail to produce maximum ROI without support from the top.
2. Drive a Tank Through Corporate Silos. Fiefdoms refusing to adopt Six Sigma will sabotage the process. Period. Everyone must be part of the process - no excuses. Achieving enterprise-wide buy-in eliminates the emergence of "gremlins" with their own political agendas. This is accomplished through the ongoing dissemination of information from the leadership team to everyone within the organization.
3. Draw a Straight Line from Main Street to Wall Street. For public companies, Six Sigma pros must be able to validate project savings at stockholder meetings and show how it translates into growth for the company. Further, they must have the ability to convert Six Sigma activities into the "first call report" used by Wall Street analysts and clearly see the connection between their ability to raise the bar on corporate performance and the p/e ratio of the company's stock. Basic equation: higher efficiency = higher stock price valuation.
4. Show Me the Risk. True Six Sigma firms will be able to assess potential savings up front with enough confidence to guarantee a minimum savings equal to 20% of a company's revenues, accepting the risk of being compensated on the basis of this savings (as opposed to a "pie in the sky" promise). Our Six Sigma Test Drive allows us to prove to skeptics the power of the Six Sigma methodology by using our own people to identify and solve problems risk-free to the client.
5. CEOs Do the Talking. Talk to CEOs of companies that have been served by Six Sigma practitioners and have had sustainable results. If they say the consultants "changed their corporate lives," by instituting genetic change and influencing culture, you have a winner. Focus should be on dollars saved, not the number of Black Belts trained.
Richard Hoffner, director, Six Sigma, Decoma International Inc., who worked with Six Sigma Consultants Inc. to deploy Decoma's Six Sigma system, believes the points emphasized on the Six Sigma Scorecard are essential for the methodology to succeed in an organization.
"The Six Sigma Scorecard approach is right on the money," he says. "All levels of the organization must fully endorse the Six Sigma program, starting from the very top, to avoid just another ‘Flavor of the Month' program. Unless the continual acceptance and discipline in using Six Sigma tools are present, the company is just wasting valuable time, resources, and money."
About the AuthorAs president and CEO of Six Sigma Consultants Inc. (SSC) industry pioneer, Greg Brue has implemented Six Sigma for some of the worlds most recognized companies. The training content and success model he designed and used at GE and Allied Signal began the rigor of Six Sigma and has become the standard by which all others are measured.
Brue is the author of several publications including the soon-to-be-released McGraw-Hill Six Sigma 36-Hour Course. The best-selling Six Sigma for Managers, and Design for Six Sigma are required reading for many university courses from engineering to business management. As an executive professor at Northwestern University's Kellogg School of Management, Wake Forest University, and School Craft College, Greg's training content and certification program have been adopted for their Six Sigma curricula. Through his Radical Thinking CEO Retreats, Greg teaches progressive minded CEOs skills to radically grow their business.
For more information, call (505) 856-6670 or visit http://www.sixsigmaco.com .