Risk Free Way to Implement Lean Six Sigma

Over half of all TQM implementations failed. In the language of Six Sigma, that's one Sigma…an pathetic track record. And if you study how most companies are implementing Six Sigma, you'll find the same old formula that ruined TQM:

1. Get top leadership to commit to widespread implementation.
2.Train internal trainers (Black Belts) to minimize the costs of training everyone
3. Internal trainers train team leaders (Green Belts)
4. Start a bunch of teams
5. Hope for the best.

Everyone points to GE as a leader in Six Sigma, but if you look more closely you'll see that Jack Welch had already created a company that managed and even embraced change. So implementing Six Sigma wasn't as hard as it might be in other organizations.

Many people I talk to in various industries say that they tried TQM and it left a bad taste in their mouths. So Six Sigma not only has to overcome resistance to change, but also the bad taste left by failed TQM implementations.

RISK FREE SIX SIGMA
So how do you implement Six Sigma in a way that's risk free? By using the proven power of diffusion (see The Diffusion of Innovations by Everett Rogers). Over 50 years of research into how changes take root and grow in corporations and cultures suggests a much safer route to successful implementation of Six Sigma or any change.

The employee body can make three choices about Six Sigma or any change: adopt, adapt, or reject. In a world of too much to do and too little time, rejection is often the first impulse. People rarely adopt methods completely, so there must be room for adaptation to fit the corporate environment. There are five factors that affect the speed and success of Six Sigma adoption:

1. Trialability-How easy is it to "test drive" the change?
2. Simplicity-How difficult is it to understand?
3. Relative benefit-What does it offer over and above what I'm already doing?
4. Compatibility-How well does it match our environment?
5. Observability-How easy is it for leaders and opinion makers to see the benefit?

You can also speed up adoption by letting the employees decide for themselves to adopt Six Sigma rather than having the CEO decide for them (although this is how we keep preaching success-get the CEO to commit to widespread change). So, to maximize your chance of success and minimize your initial investment:

1. Start small. Forget the 80/20 rule. Less than 4% of any business creates over half the waste and rework. So you don't have to involve more than 4% of your employees or spend a lot of money on widespread training to get results. Get an external Six Sigma consultant to help you find and create solutions using the tools and methods of Six Sigma. Your employees will learn through experience which is far more valuable than classroom training.
2. Set BHAGs (Big Hairy Audacious Goals). Go for 50% reduction in cycle time, defects, or costs. When you're just starting out, big reductions are often easier to get than you might think, so why not go for them? This also telegraphs the message to your teams that this ain't continuous improvement.
3. Fly under the radar. Most companies broadcast their Six Sigma initiative, and employees think: "Here comes another one." This usually stirs up the laggards and skeptics-what I call the corporate "immune system." You are much better off to make initial teams successful and let the "word of mouth" spread through informal networks, because this is the fastest way for cultures to adopt change.
4. Create initial success. In 1980, the company I worked for brought in a trial of 20 TSO terminals (to replace the punched cards IT used). They selected a small group of programmers to use the terminals. The buzz from this one group caused TSO to be immediately accepted and integrated into the workforce. Do the same thing for Six Sigma. Only start teams that can succeed. Make a small group of early adopters successful. Then another, then another.
When the pioneers (early adopters) become successful, they will tell their friends. The pioneers will convince the early settlers who will eventually convince the late settlers. No one will ever convince the laggards and skeptics; they have to convince themselves..
5. Fight the urge to widen your focus; remember the dark side of the 80/20 rule: 80% of your effort will only produce 20% of the benefit.
6. Simplify. Using simple tools like line graphs, pareto charts, and fishbone diagrams, you can easily move from 3 to 5 Sigma (30,000 parts per million to only 300) in 18-24 months. There are lots of complex tools like QFD and DOE in Six Sigma, but you won't be ready to Design For Six Sigma (DFSS) until you simplify and streamline your existing processes and lay the groundwork for it.
7. Review and refocus. Once you solve the initial 4% of your core problems, start on the next 4%, then the next. Diffusion research has shown that somewhere between 16-25% involvement will create a "critical mass" that cause the change to sweep through the culture.

Good News about Productivity and Profitability
When you focus on the 4% that creates over half the waste and rework, your initial teams get big benefits: 50% reduction in defects, waste, and rework and $250,000/project improvement in the bottom line. By the time you've worked your way through the first 16-20% of your problems, you will get 80% (the 80/20 rule) of the benefits of Six Sigma. And you'll have minimized your costs of implementation. Now you can grow skilled internal Black Belts from your initial improvement team members. And you can begin to think about DFSS to design your processes to deliver Six Sigma quality.

Six Sigma payoffs are huge, but you may want to consider using the power of diffusion to ensure that the methods and tools take root in your business and flourish. But it's up to you. You can choose the conventional wisdom which gives you only a 50-50 chance at success or choose the power of diffusion which increases your odds substantially. Haven't you waited long enough to start making breakthrough improvements in performance and profitability a permanent part of your business

Call Center Quality

In the October 27, 2003 Business Week, reporter Diane Brady found that "call centers overseas often provide better customer service than their American counterparts…Everything from customer satisfaction to error rates are vastly better."

Since frontline workers can "make or break a customer relationship," many companies are finding it easier to get fast, efficient, courteous service overseas.

India seems to be one of the best places because workers are better educated (college degree vs high school) and call center work is considered a "lucrative, successful career, not a dead end." Employee turnover in U.S. call centers is six times higher than in India.

When are we going to wake up and realize that the crashing cost of telecommunications and the rise of an educated international workforce is going to threaten all jobs? I know of at least one CIO in a $10 billion dollar company who is planning to move all IT work to a software factory in India inside of three years.

Raising our standards of performance and quality aren't just a good idea, they are a new necessity in the global village.

Barriers to Lean and Six Sigma

Sadly, the biggest barriers to Six Sigma are human and psychological, not methods or technology. Most of this resistance is about fear of one kind or another. Here's the barriers I've encountered and some ways to handle them.

1. People don't like being measured. Why? Fear! Let's face it, most companies use measurement to blame and punish people not improve processes. Is it any wonder that employees and managers resist measurement? Crafty dodgers use artful, distracting challenges to delay, derail, or ditch measurements:

• Challenge the statistics or the statistician. One doctor challenged a hospital QA manager with: "Where did you get these formulas [for control charts]? Where does the standard deviation come from?"

  Redirect: You must already know the answer, so why don't you share it with us?

  Snappy answer: "That's like asking: 'Why are there 60 minutes in an hour?' These are widely accepted statistical techniques. If you're really interested in the details, I'll get you a book to read."

• Challenge the data. I can't tell you how many times I've heard: "That's not the 'right' data." Or "That data's not accurate or valid."

  Teach them: Let's face it, no data is perfect. There's measurement error caused by measurement methods and instruments. And, because people fear being punished for poor performance, defects are systematically and routinely underreported by a factor of at least two.

  Snappy answer: "You must have better data. Show it to us."
  If they don't have better data, tell them to get over it and use what they've got. Or kick them off the team.

• Challenge the focus. "We have more important problems than this!"

  Snappy answer: "How do you know there are more important problems? Where's your data? Show it to us." If they don't have a line graph, pareto charts and cost of quality analysis to prove that their problem is more important, ask them to participate in this problem or drop out.

2. Macho Man
Most managers, directors, and VPs don't want to believe that they are wasting 10-20% of their budget. If there were such hidden stashes of $250,000 or more, shouldn't they have found it by now? After all, gut feel, common sense and trial-and-error has served them well in the past. And what does it say about them if they can't find it? (They fear looking stupid or inept. Also remember that numbers are systematically distorted to make everyone look better. Six Sigma is going to adjust the counting methods, but rarely in a positive direction.)

Reframe: It's not that what you're doing hasn't taken you a long way, it's just that gut feel and common sense stop working at around 3-4 sigma. They just won't take you any farther.

Metaphor: In the 1800s doctors believed that sickness was caused by an ill wind or bad blood. But, with the development of the microscope, Pasteur was able to "see" the invisible agents of disease. The tools of Six Sigma, like Pasteur's microscope, enable us to see the seemingly invisible root causes of waste and rework.

3. Achievers vs Problem Solvers
Businesses have employees with two opposing points of view: Achievers who want to set and achieve goals, and Problem Solvers who want to fix broken processes. Six Sigma sounds like ambrosia to the Problem Solvers and more like dog droppings to the Achievers.

Reframe: Six Sigma will free up resources to achieve more of what you want to accomplish.

4. Big Picture vs Detail
Half of your employees are "blue sky" thinkers. They love the big picture but hate the detail. Six Sigma is a rigorous, detail-oriented process. Your detail thinkers will dive in without good direction available from the big picture thinkers, and the big picture thinkers will resist taking the mission-critical issues down to an actionable level.

Reframe: Haven't you waited long enough to dig down to the root cause, or do you just want to keep watching from a distance as the business drowns in its own waste and rework?

5. Evolutionaries vs Revolutionaries
Evolutionaries want to improve the business. They make up about 65% of the workforce. Revolutionaries want to reengineer the business. They want to make a difference. Paradoxically, businesses need both styles to succeed.

Reframe: We need to create new products and improve our methods of delivering them to keep the competition at bay.

6. Hero Worship
Companies rarely let defective products escape their walls; usually by brute-force heroics of a small band of self-sacrificing perfectionists who are routinely rewarded for their heroics. Preventing problems would steal their claim to fame.

Reframe: It's not that what you're doing hasn't taken you a long way, it's just that the secret to success lies in consistency and repeatability, not random acts of heroism.

7. Fix-it Factory Fiefdoms
Most large companies have huge groups of people who do nothing but fix mistakes created elsewhere in the business. The managers and employees in these groups have based their whole careers on finding and fixing errors in the product or service. And they'll fight anything that will eliminate their jobs (fear).

Reframe: Don't you get tired of fixing the same old errors every day? You're the expert on the most common types of errors. Wouldn't you rather help fix the processes that create them? (Shift their focus from products to processes.)

8. Instincts vs Instruments
In almost every team I facilitate, I have one or two people who "know the answer." They've got a pet theory which is invariably destroyed during the root cause analysis.

Metaphor: Most barnstormers like to fly by the "seat of their pants," but combat pilots know that your instincts can get you killed. They know that when you're flying blind you have to trust your instruments, not your instincts.

Reframe: Instincts are ideal for making decisions based on insufficient data, but they are rarely sufficient when you have enough data to analyze.

9. Fear of Looking Stupid
I don't know what it is about school and grades, but most of us are afraid of looking or feeling stupid. And most people are still afraid of the math behind Six Sigma.

Reframe: We've got computers to handle the math; we just want you to understand how to use the graphs to optimize performance and profitability. And we've hired experts to show you how.

Of course there are many more human issues than these, but these are some of the most common ones I've run across. Which ones have you found?