Presentation given by Roger Hoerl as keynote speaker at the Institute for Continuous Quality Improvement, as part of the World Conference on Quality and Improvement, May 2013.
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Roger hoerl icqi keynote address 2013
1. Making Holistic Improvement a Reality
Institute for Continuous Quality Improvement
May 6-8, 2013
Roger W. Hoerl
Union College
With Significant Input From Ron Snee
2. Outline
• The success of Lean Six Sigma & previous
initiatives
• Limitations of Lean Six Sigma (& others)
– Limitations of Lean Six Sigma (operational view)
– Limitations of continuous improvement initiatives more
broadly (tactical view)
– Strategy deployment (strategic view)
• A more holistic improvement system
• Making holistic improvement a reality
• Summary
3. The Impact of Lean Six Sigma
• Billions of dollars delivered to bottom lines at
GE, Bank of America, and many others around
the globe
• Enhanced products/services to customers
– Unmeasured positive societal impact
• Significant enhancements to theory and body of
knowledge of continuous improvement
• Best integration to date of multiple statistical
methods into an overall approach to scientific
inquiry – “statistical engineering”
Clearly The Most Successful Improvement Initiative in History
4. Why Has Six Sigma Been So Successful?
Some Important Attributes
• Zealous leadership from the top.
• Focuses on improving the process (addresses root cause
versus symptoms).
• Quantitative approach utilizing metrics.
• Forces understanding of variation.
• Provides practitioners an overall road map, versus a
miscellaneous collection of tools.
• Uses a proven set of tools in the road map.
• Is being applied to all processes, not just operations.
• Provides a supporting infrastructure (defined roles, project
selection, reviews, included in budgets, reporting of
results, etc.)
A More Holistic Improvement System Must Maintain These Attributes
5. The Limitations of Lean Six Sigma
• I have frequently been asked to help on LSS
projects that were not, in fact, LSS projects
– Installing an Oracle data base
• I discovered “the hard way” that no one
methodology was best for all types of problems
• “Competitors” to LSS were not always best either
• In the fierce competition between improvement
methodologies, we may have forgotten about the
problems we were trying to solve!
No Improvement Methodology Can be All Things to All People
6. 6
Specific Limitations of Lean Six Sigma
• Requires extensive investment (e.g., training)
• Project “sweet spot” is narrow (4-6 months)
-Doesn’t address routine problem solving
• Not a comprehensive quality management system
-Project oriented, not day-to-day management
oriented
-Control plans provide “one-off” controls, but not
an integrated system (e.g., equipment calibration)
-Doesn’t replace ISO 9000 or country-specific
quality systems (e.g., Baldrige Award in the US)
It works very well for what it was designed to do.Six Sigma is Excellent at What it Was Designed to Do
7. 7
A Broader (Tactical) View
Have we developed a true continuous improvement
culture?
–Improvement too often not seen as a strategic
business imperative or function
–Improvement too often is focused in operations
and less so in other functions
–Improvement methodology is not made part of
daily work
–Improvement opportunities are not being fully
realized
How Can We Move From Methods to Culture?
Limitations of Our Success in Continuous Improvement
(Money We Have “Left on the Table”)
8. Are improvement efforts integrated or disjoint?
– Lean Six Sigma projects often managed separately
• Not part of other improvement initiatives
– People continue to think of Lean and Six Sigma as
separate improvement approaches
– Innovation is seen as something different from
improvement
• A competitor (e.g., Hindo 2007)
– Process and quality management seen as separate
from Lean Six Sigma
Can We “Connect the Dots” Between Improvement Efforts?
A Broader (Tactical) View
Limitations of Our Success in Continuous Improvement
(Money We Have “Left on the Table”)
9. 9
Has anyone yet “mastered” improvement?
• Persistent assumption that there is one best method for
improvement
- Constant search for latest fad/bandwagon
• Few books or articles on improvement, per se. Many on
improvement techniques
• Improvement initiatives and process improvements
frequently aren’t sustained
• Pre-determined solutions often “force fit” onto problems for
which they are not appropriate
- “If all you have is a hammer, every problem looks like
nail.” Can We Improve Improvement?
Limitations of Our Success in Continuous Improvement
(Money We Have “Left on the Table”)
A Broader (Tactical) View
10. Strategic View
Conjecture: Improvement initiatives work best when
they are part of strategy deployment
Strategy should come first, not the initiative
Once our strategy is determined, what initiatives
would best guide deployment?
Should the improvement initiative only have one
methodology?
Is a More Strategic and Holistic Improvement Approach Necessary?
11. Toyota
One could argue that Lean has been
Toyota’s primary business strategy since the
1930’s
Toyota Has Never Stopped Working on Lean
12. Amazon
To our shareowners:
Random forests, naïve Bayesian estimators, RESTful
services, gossip protocols, eventual consistency, data
sharding, anti-entropy, Byzantine quorum, erasure coding, vector
clocks … walk into certain Amazon meetings, and you may
momentarily think you’ve stumbled into a computer science
lecture.
Look inside a current textbook on software architecture, and
you’ll find few patterns that we don’t apply at Amazon. We use
high-performance transactions systems, complex rendering and
object caching, workflow and queuing systems, business
intelligence and data analytics, machine learning and pattern
recognition, neural networks and probabilistic decision
making, and a wide variety of other techniques.
Letter to Shareholders from CEO Jeffrey Bezos, 2010
13. General Electric
“Six Sigma will be the biggest initiative that
GE has ever launched. It will be my personal
number one priority for the next five years.”
CEO Jack Welch, 1995
14. Triangulation
• How can we triangulate on these three perspectives, to
determine the best direction to take for the next generation
of improvement approaches?
• We need to consider the strategic, tactical, and operational
levels
1. The improvement system must be based on business
strategy
2. Improvement efforts must be integrated, and create an
improvement culture
3. A holistic approach, more comprehensive than Lean Six
Sigma or any other single method, is needed
What Would Such a Holistic Improvement System Look Like?
15. Holistic View of Improving the Business
• A view of improvement as a system that:
− Works in all areas of the business
− Works in all cultures - common language and tool set
− Can address any measure of performance
− Addresses each aspect of process management:
• Process design, improvement and control
− Can address various types of improvement
− Provides management processes for improvement:
• Plans, goals, budgets, and reviews
− Focuses on developing an improvement culture
• Uses improvement as a leadership development
tool
A Truly Strategic View of Improvement
16. Holistic Improvement System Definition
An improvement system that can successfully create and sustain
significant improvements of any type, in any culture, for any
business
– Create and Sustain
• Infrastructure – management systems and resources
• Continuous improvement culture
– Significant improvements
• Quality, cost, delivery, customer satisfaction, bottom line
– Any type
• Flow, variation, optimization
• Design, improvement, control
– Any culture – Function, country, ……
– Any business – Manufacturing, service, non-profit, health
care, government
The Ultimate Vision For Improvement
17. What Would Holistic Improvement Look Like?
Strategic Level
– Senior management involvement; led by Chief Improvement Officer
– Improvement Council (IC) is permanent part of the business
Managerial Level
– Rigorous, defined system for planning and implementing
improvements
– There is a defined organizational structure to support improvement
Operational Level
– Dynamic “core set” of proven improvement methodologies
• Lean, Six Sigma, TRIZ, Work-Out…
• Dedicated experts in core methodologies
• All employees are trained at a basic level in all core methodologies
• Additional “non-core” methodologies may also be utilized
Flows From Strategic Level to Managerial and Operational Levels
19. Making Holistic Improvement a Reality
• Deming pointed out that solving special cause problems
was inherently different than improving stable systems
(common cause)
• If this distinction valid, would it help identify the best
approach to address a given problem?
• What about complexity levels?
– Do we need a Lean Six Sigma project to move the
water cooler?
• Some problems also have known solutions, e.g., we
need to eliminate an inventory step in the process.
– Ron Snee and I have noted this in the Lean vs. Six
Sigma debate
The Next Step in May Be to Provide More Specific Guidance
20. Solution
Unknown
Solution
Known
Low
Complexity
High
Complexity
Putting It All Together; Holistic Improvement
Lean Six Sigma
Taguchi Methods
TRIZ
Lean (Kaizen) Event
Reengineering
Team Problem
Solving*
Kepner-Tregoe
Work Out
Nike Projects
*Structured team problem solving, using the “Magnificent 7” Tools, for example
(Problem Solving –
Special Cause)
(Process Improvement –
Common Cause)
What is the solution?
How should we
Implement solution?
Clue
Key questions to be answered noted in each quadrant
Why did it happen?
Who will address it?
By when?
1 2
3 4
Some Examples of Methodology Options
21. Elaboration of Matrix
• Solution known – does not mean “easy”
– Means we know the source of the problem, and likely
solution
– Example; brain surgery
– Most Lean and reengineering projects begin with a
known solution – no problem to solve
• Solution unknown – we either don’t know why we have this
problem, or what to do about it
– We need to determine a solution, and possibly find root
causes first
Knowledge of Solution Guides Best Improvement Approach
22. Elaboration of Matrix
• Low complexity – isolated problem
– Typically involves a special cause; what went
wrong?
– Find root cause, fix it, and return to normal
• High complexity – involves entire system
– Typically involves working on common cause
variation – no special cause to “fix”
– Must be careful not to disrupt the system
The Profession Has Not Talked Enough About Complexity
23. Use of Holistic Improvement Matrix
• A guide; not a prescriptive, rule-based system
• Not exhaustive; many other methods could be mapped into
matrix
• Knowledge of likely solution and complexity level are the
jugular issues to select most appropriate method
– Special/common cause distinction provides a clue
• Use of a matrix is an example of statistical engineering
applied to process improvement
– How can we improve improvement?
Simply a Tool To Help Determine Best Improvement Approach
24. How Do We Get Started?
Start Small – Think Big ….. Evolution vs. Revolution
– Migrate a Lean Six Sigma initiative towards Holistic Improvement
– Where a Six Sigma Leader and Quality Council exist, work to
broaden their scope to improvement in general
– Integrate potentially competing improvement groups, such as
ISO Certification, Lean, Six Sigma, and Business Process
Improvement
– Migrate all improvement projects to a common project portfolio.
• All projects compete for the same pool of resources.
• Use tools like the methodology matrix to select best methodology
based on the problem at hand
• Project selection decisions made from a common prioritized list are
most effective
Start With Where You Are – Add With a Goal in Mind
25. Summary
• Lean Six Sigma has been tremendously effective for 25
years, but has perhaps “left money on the table”
• Lack of understanding of improvement per se has reduced the
effectiveness of continuous improvement methodologies
• Holistic Improvement System uses a variety of approaches
including:
– A focus on improvement of the entire business
– Careful project selection identifying the right projects and the
right improvement strategy for each project
– A robust improvement methodology that can handle the wide
variety of problems an organization experiences
• Begin with the end in mind
– Systematically evolve to holistic improvement
Holistic Improvement Can Avoid “Hammers in Search of Nails”