The Shifting Role of Lean Six Sigma in The Age of Turbulence

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Guidon's President and CEO Ron Wince presented a session, "The Shifting Role of Lean Six Sigma in the Age of Turbulence" at the 2010 International Conference on Lean & Six Sigma: Master Your Lean & Six Sigma For Practitioners, By Practitioners.

Businesses are charged with competing in an unpredictable world. One lesson learned from the recent downturn is that no matter what the economic climate is, the key to survival is agility. This requires a shift back to the basics and a focus on creating high performance business processes. In this session, you will learn how to use Lean and Six Sigma to create agile business processes and to position your business to survive today and thrive tomorrow.

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The Shifting Role of Lean Six Sigma in The Age of Turbulence

  1. 1. The Shifting Role of Lean Six Sigma in The Age of Turbulence Ron Wince
  2. 2. With You Today Ron Wince, President/CEO, Guidon Performance Solutions, LLC • Nearly two decades of experience in application of Lean and Six Sigma • Toyota Production System training from Shingijutsu in automotive industry and Six Sigma Training at JPMC • Co-founder of Guidon Performance Solutions – exclusive focus in non-industrial client-base and non-operational areas of manufacturing companies • Client experience in retail, healthcare, financial services, information technology, telecommunications and hospitality • B. S. Engineering, U.S. Naval Academy in Annapolis, MD What We Do Guidon helps business leaders guide their companies to transform strategy into execution through the application of world class business management practices and lean six sigma methods. 2 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  3. 3. Where Did Lean Six Sigma Come From Lean Six Sigma Ford Deming 60s Toyota Production System Quality Improvement Tools 70s Reduce Variation Just-in-Time TQM 80s Lean Six Sigma (Motorola) 90s 00s LeanSigma Both of these methods were created out of need – need to change the outcomes from business processes to better solve customer’s problems with the least amount of effort and cost 3 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  4. 4. Lean Six Sigma Has Had Great Success • Longest surviving improvement methodology in history • Over 50% of the Fortune 500 are using Lean Six Sigma – that we know of • Over 9,340,000 mentions of Lean Six Sigma on the internet in a single Google Search • Every top management consulting firm now offers some form of Lean …but despite all the success of LSS Six Sigma consulting companies were still unprepared for the economic downturn…too much • Dozens (if not hundreds) of LSS inventory, too many resources and training programs poor responsiveness… • Companies espouse their cost savings from LSS at every opportunity 4 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  5. 5. What Did It Cost Us? • Large U.S. and European banks lost more than $1 trillion on toxic assets • Unemployment hit 10.2% in the US • Real GDP declines at 6% per year • $1.3 trillion in personal wealth wiped out Lehman Brothers had a strong LSS program …companies who had LSS programs suffered a similar fate to those who did not… 5 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  6. 6. What Could Have Been Done Differently • The world has changed – Proliferation of consumer choice and complexity – Instant access to information – customers, competitors, suppliers and shareholders – Globalization and interconnectivity of the world economy – The disappearance of “sustainable competitive advantage” • But most companies continue to follow the same playbooks they have always followed – They believe the economy moves in predictable cycles …the world is changing but few – Companies have a playbook for the companies are keeping up… upswings and another for the downturns – LSS plays a role in both – but only linked to efficiency, cost and quality …efficiency and effectiveness are table stakes – without them you are simply not in business…companies must find radically shift their paradigms… 6 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  7. 7. The New Business Normal “Organizations are bombarded by change, and many are struggling to keep up. Eight out of ten CEOs see significant change ahead, and yet the gap between expected change and the ability to manage it has almost tripled since the 2006 Global CEO Study” 2008 IBM Enterprise of the Future Study New business conditions in the future will more closely resemble navigating through white water than surviving predictable economic cycles: • Change will continue to accelerate • Threats will come from every direction • Storms will become normal with intermittent hurricanes • Unpredictable and unseen risks Within the next 10 years only 1/3 of companies today will survive as they are today. – Bain Consulting 7 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  8. 8. Preparing for the Future At a time when firms in many industries offer similar products and use comparable technologies, business processes are among the last remaining points of differentiation. Tom Davenport, Competing on Analytics As simple as it sounds, few business leaders today recognize the impact of processes on their ability for companies to survive and thrive in the future. 8 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  9. 9. Business Process Focus • How decisions are made Enterprise Analytics • How talent is developed • How to develop new technology Mission Human & Operations • How to manage risk Capital Purpose & CRM • How to know which direction is best Technology Platforms • How to develop products and Systems • How strategic plans are done In the future companies will have to think of their business as a portfolio of processes – designed for agility to respond to an unpredictable business environment 9 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  10. 10. What Are Companies Doing Today? • One foot is still in the economic crisis… – Efficiency and Cost – Working capital and cash • Many are starting to focus on the recovery… – Innovation – Growth – New business models – Efficient recovery • Focus on “uneducated” opportunities – Applying process thinking to daily business management practices – Focus on revenue generation – sales, revenue capture, marketing – Accelerating and transforming strategic planning processes – Risk management, legal, customer segmentation 10 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  11. 11. Principles for the Future • Business Intelligence to guide actions • Mission and Purpose as the organizational compass • Deliberate Practice to Build Agility – Decision making processes at the point of impact – Response to opportunities and threats – Continued refinement of Tiger Woods regularly practices operations and technology this shot, although he may only see – Innovation and new offerings it under tournament conditions 2-3 times per year View the organization as a portfolio of processes which must be transformed and orchestrated 11 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  12. 12. The Role of LSS and Practitioners • LSS will provide the best tools, principles and methods for focusing on business processes • Companies must expand LSS beyond the low-hanging fruit which has been the focus for the last 5+ years – apply the tools in uncommon areas • Practitioners must educate, coach and push their organizations to capture more benefit from the internal CI teams • LSS will not be the end-game in the future – it will be one element of a convergence of tools which will drive necessary agility and performance 12 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  13. 13. Questions 13 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.
  14. 14. Thank You Guidon Performance Solutions (866) 986-4414 or (480) 986-4414 contact@guidonps.com www.GuidonPS.com Follow us on Twitter @GuidonPS 14 © 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

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