Lean Six Sigma Deployment Robin Gates Asq Quality Progress Article Aug 2007


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This is an article I wrote on deploying Lean Six Sigma.

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Lean Six Sigma Deployment Robin Gates Asq Quality Progress Article Aug 2007

  1. 1. LEAN SIX SIGMA Deployment: Start Off on The Right Foot by Robin Gates by Robin Gates many challenging issues that come with it. A ristotle advised, “Well begun is half done.”1 A thoughtful plan addressing Business executives and leaders planning or critical issues makes any project deploy- starting lean Six Sigma deployment projects can ment easier and produces better results. This benefit greatly from a little preparation and pre- includes any lean Six Sigma deployment and the work. Although geared toward large private sector organizations of 500 or more employees, the deployment management issues and principles In 50 Words detailed throughout this article are relevant to pub- Or Less lic sector organizations and can also apply to small- er organizations with the appropriate adjustments. • The decision to deploy lean Six Sigma should Making the Deployment Decision not be taken lightly. Difficult questions must Deployment starts with the decision to do some- be answered before starting the journey. thing. Deploying lean Six Sigma is difficult and should not be undertaken casually. Success is more • Identifying internal customers early on and likely if certain conditions are met. Here are four questions to ask when deciding whether to deploy staying connected is critical for success lean Six Sigma. during project deployment. 1. Is there a compelling reason for deploying lean Six Sigma? A simple, compelling and moti- • Four different deployment models can be used vating reason for deploying lean Six Sigma pro- vides the driving force for overcoming the initial when mapping a course of action. deployment barriers. Many people will need QUALITY PROGRESS I AUGUST 2007 I 51
  2. 2. LEAN SIX SIGMA convincing to get on board. Most will not accept • Revenue generation: increasing sales or output. that it is the right thing to do on blind faith . Lean Six Sigma goals should guide early deploy- The reason can be dramatic, such as poor finan- ment decisions. For example, a deployment focused cial performance or rapidly falling customer solely on saving money looks different from one satisfaction. It can be that new competitors are that also is expected to improve strategy execution. threatening your future. A burning platform—a Early agreement between the CEO and executive crisis that demands action—can be a powerful team on goals simplifies planning and reduces the motivator, but it is not essential. Many healthy risk of a false start. companies have successful deployments but com- One energy equipment and services company monly a threat or opportunity gets their attention focused deployment on improving customer rela- and pushes them to action. tionships after key customers told the incoming 2. Are there specific goals for lean Six Sigma? A CEO that the company was hard to do business burning platform or a determined CEO provides the with. push for lean Six Sigma. But a pull is needed, too. A manufacturer of advanced materials made Goals are needed to help paint an appealing picture changing the behavior of all employees the prima- describing how the future organization will be bet- ry objective. It wanted Six Sigma to be the common ter. The goals should be specific and reflect the busi- business improvement language and the way of ness case for deployment. life for every employee, not just the Green Belts Some common goals are: (GBs), Black Belts (BBs) and Champions. • Business transformation: fundamentally 3. Is there strong executive leadership for lean changing culture and management. Six Sigma? There is no substitute for leadership. A • Strategic execution: turning strategy into high level executive (CEO, COO or a key business results more effectively. unit executive) is needed to maintain the focus on • Problem solving: adopting a common method deployment, hold executives accountable for get- organizationwide. ting results from lean Six Sigma and to break down • Cost savings: reducing costs while meeting organizational barriers. A superstar CEO isn’t nec- customer requirements. essary, but there should be no doubt about the sponsoring executive’s determination to make lean Six Sigma work. FIGURE 1 Example of “Critical To” Tree Anything less greatly increases deployment CEO satisfaction with lean risk. Six Sigma deployment 4. Is lean Six Sigma right for the problems that need fixing? Sometimes organiza- Quality Delivery Cost tions start lean Six (55%) (35%) (10%) Sigma hoping to solve all their problems. Lean Six Sigma is an execu- $10 million in hard Annual deployment costs tion method not suited 90% of projects directly financial benefits will must not exceed 10% improve earnings. to solve problems such be realized in 2008. of annual project benefits. as poor leadership, fail- ing business strategy or All employees regularly All managers will be financial restructuring. exhibit appropriate use of certified Green Belts The process capability the lean Six Sigma method. or Black Belts by 2008. understanding provided by lean Six Sigma can 52 I AUGUST 2007 I www.asq.org
  3. 3. help address those woes, but can’t solve them. Address these other problems separately and consider fixing them before deploying lean Six Sigma. Asking this question at the start pushes executives to better understand how lean Six Sigma works and helps focus it on the appropriate problems. For example, one company found it lacked a widely accept- ed business model. It realized it needed to fix that situation sep- arately before lean Six Sigma could deliver all the anticipated benefits. Understanding Deployment The value in developing a CT tree is that it can Customer Requirements provide clarity and garner stronger executive sup- A deployment is like other business processes in port. Agreement is easy when expectations are which customer requirements should come first. vague. Getting specific and measurable specifica- The value of the deployment is determined by tions flushes out misunderstandings, hidden agen- what the customer sees and is willing to pay for. Understanding internal customer requirements is a good place to use some lean Six Sigma tools. Developing a “critical to” (CT) tree for the deploy- A superstar CEO isn’t neces- ment will help go beyond general deployment goals and determine specific and measurable per- sary, but there should be no formance specifications. Figure 1 shows an exam- ple of a CT tree that illustrates specific metric goals doubt about the sponsoring for a lean Six Sigma deployment. The following are steps for developing a CT tree. executive’s determination to • Identify the deployment customers—those who make the decision to pay (allocate organi- make lean Six Sigma work. zation resources) for lean Six Sigma or have the power to affect that decision. • Go through a structured process (for example, interviews or focus groups) to thoroughly das and wishful thinking. Review any requirements understand customer requirements. Use the with customers annually and adapt to maturing standard quality, delivery and cost categories. expectations, keeping the deployment fresh and rel- • Get measures and specifications. If saving evant. Designing the deployment will be easier money is expected, find out how much and with unambiguous expectations. by when. • If culture change is required, determine what Selecting the Deployment Model this means to the customer and how it should The deployment model is the deployment’s be measured. Customers won’t always know basic scope, scale, structure and focus. There is no what they want, so use this process to help one right deployment model. Organizations are them figure it out. served best by a deployment model appropriate QUALITY PROGRESS I AUGUST 2007 I 53
  4. 4. LEAN SIX SIGMA for them. Each of the four generic deployment It can take years to turn a business unit deploy- models highlights issues that must be considered: ment into an organizationwide effort because the 1. Organizationwide: This is the conventional pilot deployment must prove itself first. For exam- Big Bang deployment model. It is top-down driven ple, a chemical manufacturer was successful in with strong central management. All parts of the starting with a business unit deployment. Based on organization participate. This deployment quickly its success, the manufacturer expanded the deploy- gets to critical mass and produces results. Cross ment companywide, adding 18 months to the functional processes can be improved because all deployment. functions are included. Strong executive leadership 3. Targeted: The targeted model focuses deploy- helps remove deployment barriers. This deploy- ment on a specific problem or group of problems. ment approach can transform the business because The approach can involve many parts of the orga- of its scope and scale. nization or just one. The disadvantage of this model is that it requires This model can be implemented quickly and powerful leadership, clear focus and persistence—all yield rapid results. The problem provides the uncommon characteristics for most organizations. impetus for action and a sharp focus. Little infra- The model uses many resources and crowds out structure might be required because the scale tends other initiatives. A strong deployment team is essen- to be small. The change management workload is tial. It is the most challenging model to execute. greatly reduced. Research suggests this model has the greatest Resources such as BBs can be centralized and impact and is most sustainable. Organizations are assigned where needed. Contractors and project notoriously hard to change. A comprehensive, fast employees can be used more extensively. It can paced deployment with strong, committed leader- demonstrate quickly that lean Six Sigma works. ship gets the priority and creates the momentum This approach is unlikely to transform the busi- essential to overcome the natural inertia of organi- ness because of the narrow focus. Once the immedi- zations. ate problem is solved, the effort can be disbanded 2. Business unit: This model deploys lean Six easily. Expanding the effort organizationwide is dif- Sigma in one part or business unit within the larger ficult because the supporting infrastructure has not organization. It has many characteristics of an been built. organizationwide deployment, only on a smaller 4. Grass roots: In this approach, a small group scale. An advantage is a smaller, simpler support- far down in the organization deploys lean Six ing infrastructure for functions such as training Sigma. This model is easily started, often with an and project tracking. There is less complexity in a enthusiastic advocate and a specific problem to business unit. solve. Little infrastructure is needed because of The smaller scale makes the selling and adoption the small scale. Visible success can create interest easier. This can be a way to start in highly skeptical in lean Six Sigma elsewhere in the organization. organizations that need proof it will work. Strong This type of guerilla, “fly under the radar” business unit leadership is needed, but early CEO deployment has many disadvantages and rarely leadership is less critical. leads to a broader deployment: Disadvantages include: • Often missing is top level leadership to make • Impact on the organizational culture is less- deployment a priority and provide resources. ened. • Lean Six Sigma knowledge is localized and • Cross functional improvement opportunities there is often little or no infrastructure to sup- are often lost as teams find it difficult to reach port expansion. across functional or business unit lines to • Cross functional work is difficult because of improve processes. the narrow scope. • Using BB assignments to develop leaders is • Results are often so small relative to the entire constrained because exposure is limited to organization that capturing top executive the business unit and fewer promotional attention is difficult. opportunities exist. 54 I AUGUST 2007 I www.asq.org
  5. 5. Deployment and Results Focus on What Matters Most Accountability Maintaining a focus on what matters is a chal- Accountability is another deployment issue that lenge for management initiatives. Too often you must be resolved early. This is often determined hear the story of the quality team completing a along with the deployment’s organizational struc- textbook project and solving a problem that no one ture. Two aspects of accountability should be con- cared about. Nothing is more deadly to a manage- sidered: ment initiative than irrelevance. 1. Accountability for results: This should be Plan from the start to keep lean Six Sigma rele- placed with managers and executives. They are vant. The easy, low hanging fruit projects will be accountable for business results, and lean Six depleted quickly. Developing the next generation Sigma projects are part of getting results. Line of projects will be more difficult. Early action can managers and executives will quickly marginalize avoid assigning mediocre projects to BBs just to lean Six Sigma if they are not accountable for its keep them busy. project benefits. Keeping lean Six Sigma relevant is about project Many organizations tie a significant portion of development and selection. To find relevant pro- variable compensation to attaining lean Six Sigma jects, begin with the top business goals (for exam- improvement goals to reinforce this accountability. ple, decrease unit costs or increase sales). Executive accountability for project results leads to Perform a critical to quality (CTQ) flow down to assigning key project resources, primarily BBs, to the level in which a project can be properly scoped. them. This aligns accountability for results and the Through this process, the transfer function [y=f(x)] resources to achieve them. is determined and dependencies for a particular 2. Accountability for deployment execution: business goal identified. The result is a direct link This addresses the need to have someone responsi- from what the executives care about to specific pro- ble for deployment policies, procedures, training, jects. The CTQ flow down concept is illustrated in GB or BB selection and project tracking. Generally, Figure 2. these functions should be centralized to be efficient. CTQ flow downs are simple in concept but com- This individual should report to someone high in plex in execution. Often, important data go miss- the organization to get the perspective to tie ing, business processes are poorly defined, and the deployment to strategy, and the power to address business model is obscure. Projects might be need- cross functional opportunities. Reporting to the ed to collect data and define processes. CEO or COO is a good option. Assigning accountability can be challenging because many organizational forces FIGURE 2 CTQ Flow Down for Project Selection fight against clarity. However, getting a workable resolution Output (business goal; for example, grow profits 10% ) Company Inputs to these two aspects of lean Y = X1 X2 X3 X4 X5 level Six Sigma accountability is Production costs (for example, decrease production costs by 15%) necessary for a sustainable Y = X1 X2 X3 X4 X5 deployment. A Midwest energy compa- Product/program (for example, reduce the cost to produce product XYZ) ny developed performance Y = X1 X2 X3 X4 X5 contracts—including Six Process (for example, cut supply costs by 12% for product XYZ) Sigma goals—for all its execu- Y = X1 X2 X3 X4 X5 tives. General Electric and many other companies have Subprocess (for example, reduce warehousing costs) Project tied executive incentive com- Y = X1 X2 X3 X4 X5 level pensation to Six Sigma suc- Project focus (for example, double inventory turns) cess as well. QUALITY PROGRESS I AUGUST 2007 I 55
  6. 6. Constructing flow downs must involve top man- • Do they support the lean Six Sigma initiative? agers, because they possess the necessary perspec- • Do they have the resources and business tives and business knowledge. Getting top knowledge to support the deployment? management engagement is tough, but the result is The matrix in Figure 3 can be used to display the often a flood of excellent projects. This is where results of the assessment. Change management assigning executives accountability for project challenges are readily apparent. The assessment results can pay off. provides a simple roadmap from which to start Organizations have adopted a variety of ways to facilitating change and to overcome resistance. keep projects relevant. Many use project selection Winning over skeptics requires personal contact committees with top executive members to ensure and diplomacy. The root causes of resistance need to projects align with company goals and strategies. be understood and actions taken. Many people will Many organizations also provide specific training become supporters if they feel their concerns are to Champions on project identification methods. heard and positive steps are taken. Some will resist Monitor the project identification process by get- regardless, but most can be won over if engaged ting frequent feedback from executives. Ask whether early before resistance becomes entrenched. they believe the projects are the right ones. See whether they are excited about attending project Talent Management report outs or are just attending these meetings out Talent management is a powerful way of spread- of obligation. ing the lean Six Sigma way of thinking throughout the organization. Cultural transformation occurs Change Management when high potential employees become full time BBs The challenge of making changes is not new. for 18 to 30 months and then go back into the organi- Niccolo Machiavelli noted, “There is nothing more zation in leadership positions in which they apply difficult to arrange, more doubtful of success, and lean Six Sigma principles in day-to-day management. more dangerous to carry through than initiating It is common advice to get the top performers change…”2 for lean Six Sigma deployments. But less is said The ability to manage change rather than master about how to do this on a sustained basis. There tools determines lean Six Sigma success. Lean Six are many talent management issues such as defin- Sigma deployments disrupt and threaten organiza- ing high potential employees, procedures for plac- tions by emphasizing data and measures over ing people in selected positions, and managing opinion, highlighting performance problems with perceptions and expectations. projects and making process owners accountable For example, Honeywell recruited top perform- for better results. ers to become BBs through its talent management Develop a change management plan early. Avoid process. Its objective was to take leaders and give putting this off in the rush to select the first BBs and them Six Sigma skills. This helped Honeywell revi- start projects. There is an extensive body of knowl- talize its Six Sigma deployment. As part of a lead- edge on change management and many good books ership development plan, another company took on the subject.3 Build on what is known about how its top-tier performers and systematically deter- people and organizations react to change, what peo- mined who should become BBs and when that evo- ple need to hear, the role of leaders during change lution should take place. and how to communicate about change effectively. Many organizations do not have a formal talent Start with a quick assessment of the stakeholders management process to identify high potential and their parts of the organization. Identify the employees and facilitate career development. Some stakeholders (executives, managers, key staff and organizations might have programs that don’t the lean Six Sigma deployment team) and ask: work well. A rudimentary talent management • Do they understand the value proposition for process might be needed to supply the talent for deploying lean Six Sigma? the deployment. • Do they understand the basic plan for deploy- There will be challenges here. Managers might ing lean Six Sigma? not identify their stars for fear of losing them. It is 56 I AUGUST 2007 I www.asq.org
  7. 7. not uncommon to find dis- FIGURE 3 Change Management Assessment Matrix agreement among managers on who is a top performer. One Understand Resources and Understand value Support for person’s star might be anoth- deployment knowledge proposition? deployment? er’s underperformer. Filling plan? available? jobs might not be transparent, Executives making it difficult to place BBs. Executive 1 Ready Start working with HR early to Executive 2 Concern develop these policies and Executive 3 Obstacle processes. Management Manager 1 Hard Work Pays Off Assessment Manager 2 Deploying lean Six Sigma can questions Assessment Manager 3 produce fantastic results that Employees are worth all the hard work. The risks with lean Six Sigma Department 1 deployment are not technical. Department 2 The methods work and the deci- Department 3 sions about tools, terminology Project Team Stakeholders and training are relatively Member 1 minor. Member 2 It is the ability to address the Member 3 broader issues of managing change, securing leadership commitment, managing talent Companies are Honing Their Performance, McGraw-Hill, and getting the right accountability that will make 2000. the difference between a deployment that lasts and Snee, Ronald D. and Roger W. Hoerl, Leading Six Sigma— one that become another forgotten management A Step-by-Step Guide Based on Experience with GE and initiative. Other Six Sigma Companies, Financial Times Prentice Hall, 2003. ACKNOWLEDGEMENTS The author thanks Brian Boyette from Avior Group and ROBIN GATES is a management Lonnie Basal from Clipper Windpower Inc. for their assis- consultant based in Middleton, WI. tance during the preparation of this article. He holds a master’s degree in public policy and administration from the REFERENCES LaFollette Institute of the University 1. Aristotle, Politics, translated by Benjamin Jowett, of Wisconsin-Madison. Gates is a Batoche Books, 1999, p. 113. 2. Niccolo Machiavelli, The Prince, translated by George member of ASQ. Bull, Penguin Books, 1975, p. 51. 3. John P. Kotter, Leading Change, Harvard Business School Press, 1996. Please BIBLIOGRAPHY comment Eckes, George, Making Six Sigma Last—Managing the Balance If you would like to comment on this article, Between Cultural and Technical Change, John Wiley & Sons, please post your remarks on the Quality Progress Inc., 2001. Discussion Board at www.asq.org, or e-mail Pande, Peter S., Robert P. Neuman and Roland R. Cavanagh, them to editor@asq.org. The Six Sigma Way: How GE, Motorola and Other Top QUALITY PROGRESS I AUGUST 2007 I 57