Thoroughness vs. Speed!! Why are we opposing both? In modern businesses, the two are necessary simultaneously!! You need to be fast and you need to be thorough!! Nevertheless, in practical situations, most businesses are not thorough at all despite their claims to be armies of professionals. The problem here is not due to speed of execution but in fact speed of thinking. By being too fast in their logic or thinking they miss critical ideas that make organisations live or die in the mid term. In this presentation, we propose a radical change of culture in the operational management of any business. In fact, we want to import the Zen plenitude of Mathematics inside business organisations for the sake of thoroughness and “mathematise” the management of business processes the same way Taylor in his time made an effort to render business management more “scientific”. This approach already has a name and is implemented in many organisations: It is the Six-Sigma Methodology. We will therefore justify to undertake this methodology within your organisation for any of our leaders-readers

1. THE
ZEN
ORGANISATION
©
North
Delta
College
2016
Mathema'cs
applied
to
Business
Theory
1
Mathema>cal
Structures
behind
a
Six-­‐Sigma
Organisa>on

2. INTRODUCTION
Thoroughness
vs.
Speed!!
Why
are
we
opposing
both?
In
modern
businesses,
the
two
are
necessary
simultaneously!!
You
need
to
be
fast
and
you
need
to
be
thorough!!
Nevertheless,
in
prac>cal
situa>ons,
most
businesses
are
not
thorough
at
all
despite
their
claims
to
be
armies
of
professionals.
The
problem
here
is
not
due
to
speed
of
execu>on
but
in
fact
speed
of
thinking.
By
being
too
fast
in
their
logic
or
thinking
they
miss
cri>cal
ideas
that
make
organisa>ons
live
or
die
in
the
mid
term.
In
this
presenta>on,
we
propose
a
radical
change
of
culture
in
the
opera>onal
management
of
any
business.
In
fact,
we
want
to
import
the
Zen
plenitude
of
Mathema>cs
inside
business
organisa>ons
for
the
sake
of
thoroughness
and
“mathema>se”
the
management
of
business
processes
the
same
way
Taylor
in
his
>me
made
an
effort
to
render
business
management
more
“scien>fic”.
This
approach
already
has
a
name
and
is
implemented
in
many
organisa>ons:
It
is
the
Six-­‐
Sigma
Methodology.
We
will
therefore
jus>fy
the
undertaking
of
this
methodology
within
your
organisa>on
for
any
of
our
leaders-­‐readers
Mathema'cs
applied
to
Business
Theory
2

3. SUMMARY
Mathema'cs
applied
to
Business
Theory
3
Part
I:
THE
INITIAL
QUESTION:
SIX
SIGMA
A)
Which
problem
are
we
trying
to
solve
B)
What
is
Six
Sigma
all
about?
Part
II:
THE
QUESTION
REVISITED
A)
A
Retailing
Example
B)
Why
a
Six
Sigma
degree
of
leanness
is
so
vital?
Part
III:
THE
MATHEMATISATION
OF
BUSINESS
A)
The
Mathema>sa>on
of
Business
B)
The
Quest
for
Perfec>on
C)
Business
Systems
D)
The
Real
Pilot
Steering
the
Organisa>on
E)
A
new
Metric
:
The
Real
Defini>on
of
Defect
Final
Statement
:
The
Zen
Organisa>on

4. PART
1:
THE
INITIAL
QUESTION:
SIX
SIGMA
Let
us
suppose
we
are
an
established
business
with
a
working
business
model,
strong
customer
base
and
sound
revenue
streams.
Nevertheless,
suppose
furthermore
we
have
in
fact
a
problem:
We
are
losing
every
month
key
customers
to
our
compe>>on
and
s>ll
we
are
all
performing
our
daily
jobs
perfectly
well.
What
could
be
the
cause
of
our
customer
defec>on?
Clearly,
there
is
some
dissa>sfac>on
in
the
air.
How
to
go
to
the
root
cause
of
it?
What
has
affected
our
value
proposal
to
our
clients?
Analyse
the
situa>on
clearly
and
you
will
see
elements
of
explana>ons:
small,
small
mistakes
here
and
there
but
repe>>ve
have
hampered
our
trust
rela>onship
to
our
faithful
clients.
A
product
with
minor
defects
here,
a
wrong
managerial
choice
there,
few
late
deliveries.
Nothing
major,
s>ll
>me
has
come
to
>ghten
the
bolts.
Here
comes
this
presenta>on:
“The
Zen
Organisa>on”
to
give
the
right
framework
to
tackle
a
licle
sloppiness.
Mathema'cs
applied
to
Business
Theory
4
Which
Problem
are
we
Trying
to
Solve?
Picture
1:
Size
of
Sales
shrinking
every
Month
Total
Revenues
Time
in
Months

5. Reducing
Defects
in
Manufacturing
or
Business
Processes
The
way,
the
Six
Sigma
methodology
acacks
the
problem
is
by
trying
to
reduce
defects
in
manufacturing
or
business
processes.
What
do
we
mean
by
defect?
A
defect
is
by
the
classical
accepted
defini>on
a
“breach”
in
the
quality
of
the
outcome
of
a
given
task
with
respect
to
its
original
specifica>on
(>me,
size,
quan>ty,
wrong
product
etc…)
–
Any
ac>on
which
could
trigger
an
internal
or
external
customer
complaint!!
(Such
as
late
delivery,
wrong
item
shipped,
any
form
of
mistake
which
impacts
customer
sa>sfac>on
and
is
not
covered
by
your
Terms
and
Condi>ons).
We
will
explain
in
Slide
7,
through
a
Retailing
Example,
why
this
defini>on
is
insufficient.
We
will
thus
introduce
a
new
no>on
of
defect
in
this
presenta>on
and
use
it
as
our
Ariadne
thread
towards
our
defini>on
of
a
Zen
Organisa>on.
Mathema'cs
applied
to
Business
Theory
5
Picture
2:
Two
Products
with
a
defect
PART
1:
THE
INITIAL
QUESTION:
SIX
SIGMA

6.
Mathema'cs
applied
to
Business
Theory
6
The
Targets
to
be
Achieved
The
reason
why
Six
Sigma
is
different
from
anything
before
it
is
the
radical
aktude
it
adopts
to
eradicate
sloppiness:
Up
to
a
millionth!!
In
fact
Six
Sigma,
more
precisely
requires
less
than
3.4
defects
per
million
task
performed.
This
toughness
on
the
organisa>on’s
processes
and
the
par>-­‐pris
to
always
remain
in
the
realm
of
the
measurable
and
verifiable
conjointly
with
an
established
methodology
and
culture
inspired
by
Japanese
Mar>al
Arts
(Acribu>on
of
Green
Belts,
Black
Belts
etc…)
des>ned
to
professionalise
anyone
involved
with
a
Six-­‐Sigma
project
is
what
sets
Six
Sigma
apart.
Picture
3:
Close
to
Perfec>on
PART
1:
THE
INITIAL
QUESTION:
SIX
SIGMA
1
Million
Opportuni>es
Less
than
3.4
defects

7. An
online
retailer
decides
to
go
for
Last
In,
First
Out
as
picking
instruc>on
for
the
online
shopper
thinking
the
customer
will
appreciate
the
extra
effort.
Suddenly,
stock
surpluses
of
outdated
products
appear
in
the
warehouse
and
very
open
the
online
customer
sees
exactly
the
reverse
in
his
shopping
bag
as
older
items
are
s>ll
on
the
shelves.
è
Wrong
decision!!
However
not
a
defect
in
the
classical
sense,
as
the
customer
cannot
complain
because
the
terms
and
condi>ons
of
the
company
says
they
are
perfectly
allowed
to
do
so.
Nevertheless,
every
week
2%
of
the
customer
base
switches
to
a
smarter
compe>tor
who
knows
the
basics
of
retailing
replenishment.
In
our
defini>on
of
defect,
this
will
be
a
defect
because
the
value
proposal
has
in
reality
gone
down.
The
company
has
suddenly
asked
the
customer
to
get
acquainted
with
the
fact
the
freshness
of
products
can
have
major
fluctua>ons.
A
fact
many
online
customers
will
refuse
if
there
exists
a
compe>tor
who
respects
a
minimum
consistency
in
the
dates
of
the
products
shipped.
QED
Mathema'cs
applied
to
Business
Theory
7
A
Retailing
Example
PART
2:
THE
QUESTION
REVISITED
Picture
4:
Gosh!!
This
Lamb
is
Today’s
date

8. Why
is
a
Six
Sigma
Degree
of
Leanness
so
Vital?
–
Part
1
Go
inside
a
normal
company
and
study
its
internal
processes.
Unless
you
have
directly
hit
Goldman
Sachs,
you
will
be
surprised
as
your
scru>ny
moves
higher
along
the
hierarchy
by
the
level
of
judgemental
errors
made
by
management.
Very
far
from
Oxon
Excellence.
Moreover
and
more
detrimental
to
the
organisa>on,
at
the
middle
management
level,
these
managers
do
not
even
care
about
their
fundamental
incompetency.
They
know
90%
of
the
managers
at
their
level
face
the
same
difficul>es,
so
they
have
all
the
excuses
to
not
even
bother
Mathema'cs
applied
to
Business
Theory
8
Picture
5:
PART
2:
THE
QUESTION
REVISITED
I
am
Incompetent
But
so
is
the
guy
with
the
Green
T-­‐
Shirt.
Thus
I
am
covered

9. This
is
why
Six
Sigma
is
so
vital.
First
by
crea>ng
a
group
of
individuals
inside
the
organisa>on
who
do
not
depend
on
the
middle
management
and
focused
on
problem
solving.
Second,
by
targe>ng
such
a
high
level
of
leanness,
Six
Sigma
conquers
the
muddy
waters
of
Middle
Management
where
arrogance
is
generally
the
rule
and
outstanding
competency
the
excep>on.
Mathema>cal
perfec>on
is
the
only
way
of
breaking
a
culture
of
bad
habits
and
wrong
judgement
which
is
so
established
in
most
of
the
big
size
organisa>ons
that
most
workers
and
office
clerks
have
accepted
it
as
a
‘fait
établi’
Mathema'cs
applied
to
Business
Theory
9
Picture
6:
A
Transversal
Impact
PART
2:
THE
QUESTION
REVISITED
Why
is
a
Six
Sigma
Degree
of
Leanness
so
Vital?
–
Part
2
Usual
Lines
of
Hierarchy
Same
Organisa>on
with
a
project
manager
inside
Why
should
I
be
led
by
you?
I
wear
a
white
collar
shirt
whereas
yours
is
orange

10. The
Mathema>sa>on
of
Business
What
happens
in
companies
which
are
not
thorough?
There
are
many
ways
in
which
a
business
organisa>on
can
be
sloppy.
The
very
first
and
foremost
is
by
not
documen>ng
its
internal
processes.
By
leaving
the
internal
processes
loose,
the
organisa>on
has
2
choices
in
order
to
survive:
1) Import
the
model
of
its
business
systems
from
an
outside
reference
organisa>on
as
it
is
unable
to
delineate
its
own
proper
systems.
2) Rely
on
the
historical
legacy
lep
by
its
own
organisa>on,
if
this
legacy
was
outstanding
prior
to
the
IPO
and
then
hope
that
it
will
help
to
cope
with
the
new
challenges
faced
in
the
actual
environment.
In
any
case,
the
organisa>on
has
not
risen
to
the
challenge
proposed,
contrarily
to
an
organisa>on
such
as
Toyota,
for
example,
who
will
accept
the
Highway
to
Hell
of
structuring,
or
even
‘mathema>sing’
its
internal
business
processes
to
become
more
lean,
more
efficient
on
its
own…
Mathema'cs
applied
to
Business
Theory
10
PART
3:
THE
MATHEMATISATION
OF
BUSINESS
Picture
7:
Hey
John,
Do
you
know
what
you
have
to
do?
Not
Really.
A
Line
Manager
trained
me
6
Months
ago
for
20
minutes.
The
rest
I
discovered
myself!!

11. What
about
Half-­‐Way
Through?
But
why
s>ll
go
as
far
as
Six
Sigma
regarding
the
leanness.
That
is:
Only
a
handful
of
defects
over
a
million
transac>ons!!
Because
with
Six
Sigma,
you
are
close
to
being
Mr
Perfect
but
s>ll
with
measurable,
achievable
targets.
And
with
a
proven
methodology
for
reaching
them.
Having
one
defect
over
a
thousand
is
not
enough.
First
because,
your
mistakes
and
defects
are
s>ll
in
the
visible
sphere,
and
second
aper
the
project
is
over
you
might
go
back
to
your
ini>al
sloppiness.
Six
Sigma:
Less
than
3.4
defects
over
a
million
opportuni>es
strikes
the
right
balance.
Almost
striking
mathema>cal
accuracy
without
going
too
far
and
becoming
unreasonable
(“I
want
to
give
Pink
elephants
to
my
client”
!!!)
Mathema'cs
applied
to
Business
Theory
11
Picture
8:
PART
3:
THE
MATHEMATISATION
OF
BUSINESS
Six
Sigma
is
not
the
Land
of
the
Pink
Elephant.
It
is
about
using
proven,
measurable
methodology
to
be
as
accurate
as
possible

12. The
Quest
for
Perfec>on
How
do
you
realise
you
have
in
front
of
you
a
Toyota
or
a
‘dilecante’?
There
are
external
signs
that
process
re-­‐engineering
are
being
implemented
in
the
organisa>on.
Go
on
the
shop
floor,
where
the
main
opera>ons
are
happening
–
Could
be
the
factory,
the
warehouse,
the
store
for
a
retail
business
or
even
emails
exchanged
between
IT
Team
members
if
everything
is
online
–
and
ask
yourself
the
following
2
ques>ons:
1) How
many
project
managers
are
there
present
on
the
shop
floor
besides
the
workers
and
their
line
managers
who
generally
have
sunk
into
daily
opera>onal
survival
and
have
no
clues
whether
what
they
are
doing
is
right
or
wrong
for
the
business
even
in
the
Mid-­‐
Term!!
2) Who
is
the
owner
of
a
given
business
system?
Is
it
monitored
by
a
Project
manager,
the
leadership,
or
an
unknown
genius
inside
the
organisa>on.
Or
more
likely,
has
is
it
simply
been
given
to
the
Dogs??
Mathema'cs
applied
to
Business
Theory
12
Picture
9:
PART
3:
THE
MATHEMATISATION
OF
BUSINESS
The
Dilecante
My
Goal
in
Life
is
to
make
money.
Therefore:
I
don’t
need
Maths
and
I
don’t
need
to
think
twice
about
what
I
am
doing!!

13. Who
Owns
Informa>on
Inside
your
Organisa>on?
The
Second
point
here
is
very
crucial.
A
business
system
is
not
its
IT
incarnate.
It
is
more
subtle.
It
is
about
Process
Ownership.
Most
businesses
have
processes
without
having
anyone
owning
those
processes.
And
don’t
say
it
is
the
CEO!!
If
financial
figure
Xp30
is
wrong
in
a
major
report,
the
financial
analyst
will
blame
IT
for
providing
wrong
data,
IT
will
claim
they
don’t
input
anything
in
the
system,
and
the
clerk
entering
data
on
the
screens
will
just
say
he
entered
what
he
was
told
to
do.
And
the
CEO??
He
has
10,000
other
things
to
do
than
to
bother
about
a
financial
report
however
important
it
is.
In
a
perfect
(i.e.
Zen)
Organisa>on,
every
business
system
(maybe
not
every
process)
has
an
owner!!
Mathema'cs
applied
to
Business
Theory
13
Picture
10:
PART
3:
THE
MATHEMATISATION
OF
BUSINESS
Business
System
P3
Who
inside
the
Organisa>on
is
the
Owner
of
Business
System
P3?
MIS
Manager
CEO
Finance
Control
Recruitment
Manager
?
?

14. What
is
a
Business
System?
Mathema'cs
applied
to
Business
Theory
14
What
is
a
Business
System?
This
is
the
key
defini>on
of
this
whole
presenta>on!
A
Business
System
is
a
Unit
of
Informa>on
within
an
Organisa>on
characterised
by:
-­‐ A
common
set
of
technological
apparatus
to
handle
them
by
the
employees
-­‐ It
is
a
whole
System.
Comprehensive,
Complete
within
the
organisa>on
when
you
look
at
its
given
Purpose.
-­‐ A
Given
“Purpose”.
Not
necessarily
a
business
purpose
but
at
least
an
Opera>onal
purpose!!
Examples
of
Business
systems
abound:
Internal
Financial
Repor>ng;
Human
Resource
Recruitment
Process;
Global
Manufacturing
Process;
Supply-­‐Chain
Management;
Brand
Management
etc…
PART
3:
THE
MATHEMATISATION
OF
BUSINESS
Picture
11:
Hierarchical
Lines
inside
the
Organisa>on
Business
System
A
Business
System
B
Business
System
C

15. Business
Processes
and
Business
Systems
A
business
process
is
generally
a
set
of
tasks
an
individual
has
to
perform
individually
or
in
teams,
whereas
business
systems
form
groups
of
such
processes.
A
set
of
business
processes
can
be
called
a
business
system
if
it
is
a
maximal
set
of
processes
with
a
common,
unique
IT
Playorm
and
sharing
the
same
business
func>onality
inside
the
organisa>on.
Example:
Cash
management
System,
Customer
Booking
Order
Entry,
Modules
of
an
ERP
together
with
the
officers
in
charge
of
that
module.
As
we
see
the
defini>on
of
a
Business
System
transcends
the
segmenta>on
of
an
organisa>on
into
divisions
or
departments.
For
example,
if
an
organisa>on
has
3
major
commercial
ac>vi>es,
its
Booking
Order
Entry
could
very
well
be
split
into
3
big
divisions.
Nevertheless,
in
order
to
be
considered
holis>cally
this
System
would
indeed
need
some
transversal
thinking
from
leadership
which
we
are
sure
in
prac>cal
life
is
rarely
the
case.
Mathema'cs
applied
to
Business
Theory
15
Picture
12:
PART
3:
THE
MATHEMATISATION
OF
BUSINESS
A
Business
System
Complete
Only
1
IT
system
Defined
by
a
business
func>onality

16. The
Real
Pilot
Steering
the
Organisa>on
–
Part
1
Mathema'cs
applied
to
Business
Theory
16
In
a
perfect
(i.e.
Zen)
Organisa>on,
every
business
system
(maybe
not
every
process)
has
an
owner!!
Having
an
owner
means
someone
in
the
company
understands
what
is
happening
with
the
given
system.
i.e.
he
understands
in
which
situa>on
it
outperforms,
and
the
root
cause
of
its
wrongdoings
when
things
cease
being
smooth.
If
an
individual
masters
80%
of
the
systems
inside
the
organisa>on
and
has
the
means
to
influence
them
he
should
be
called
the
true
‘pilot’
of
the
organisa>on
and
not
the
High-­‐
sikng
CEO.
Picture
14:
Picture
13:
PART
3:
THE
MATHEMATISATION
OF
BUSINESS
The
Zen
Organisa>on
A
given
Business
System
A
human
owner
Every
Zen
Organisa>on
has
a
pilot
John,
the
hidden
genius
of
the
organisa>on
Cash
Management
System
Rela>onship
with
Key
clients
Financial
Repor>ng

17. In
the
Ideal
situa>on,
the
pilot
is
the
CFO,
the
CTO
…
or
someone
else
and
has
access
to
project
management
preroga>ves
inside
the
business
to
curb
any
wrongdoings
in
the
daily
processes.
Sole
someone
with
project
management
skills
can
bring
an
incremental
improvement
on
the
daily
opera>onal
processes.
Because
precisely,
those
who
are
‘inside’
these
processes
are
involved
in
a
survival
game
which
prevents
them
from
understanding
what
is
good
for
the
company
in
the
long
run.
Thus
the
absolute
necessity
of
having
an
external
project
manager
on
the
shop
floor.
And
even,
in
fact,
several
of
them
working
on
totally
unrelated
projects!!
The
transverse
power
of
this
process
re-­‐engineering
will
impact
beneficially
the
whole
organisa>on!!
Mathema'cs
applied
to
Business
Theory
17
Picture
15:
PART
3:
THE
MATHEMATISATION
OF
BUSINESS
The
Real
Pilot
Steering
the
Organisa>on
–
Part
2
Your
Organisa>on
Situa>on
Daily
Survival
Incremental
Progress
Answer
Opera'ons
Project
Management
Who
Clerks
Someone
taken
out
of
Opera'ons

18. Mathema'cs
applied
to
Business
Theory
18
A
New
Metric:
The
Real
Defini>on
of
Defect
Six
Sigma
methodology
is
concerned
about
reducing
defects
in
a
company.
What
do
we
mean
by
defect.
In
the
tradi>onal
sekng,
it
means,
a
product
defect,
or
a
late
delivery,
or
a
mistake
in
the
data
entry…
In
general,
any
ac>on
which
could
trigger
a
customer
complaint.
At
North
Delta
College,
we
have
a
much
broader
no>on
of
the
concept
of
defect
as
it
makes
it
more
stringent
and
makes
it
hit
the
core
business
aspect.
A
defect
for
us
is
any
ac>on
taken
at
>me
T
which
ul>mately
reduces
the
value
proposal
of
the
company
to
the
customer
in
the
future.
As
such
our
defini>on
encompasses
the
tradi>onal
opera>onal
defini>on
given
earlier.
However,
it
goes
far
deeper
as
it
nails
down
the
root
defini>on
of
what
is
good
or
bad
for
the
company.
Picture
16:
PART
3:
THE
MATHEMATISATION
OF
BUSINESS
I
have
made
recently
a
decision
for
my
company
How
do
I
know
I
made
the
right
choice?
Does
there
exists
a
Universal
Criterion
for
assessing
right
from
wrong
in
business?

19. Remarks
on
the
New
Metric
A
wrong
choice
of
business
model
by
leadership
is
a
defect.
An
approximate
choice
of
acceptable
dates
of
freshness
for
fish
and
meat
in
a
grocery
store,
again
a
defect.
Non
availability
of
a
cri>cal
item
in
the
warehouse
although
subs>tutes
do
exist,
again
a
defect.
Why
our
defini>on
of
defect
is
far
becer?
Because,
our
defini>on
of
defect
ships
back
the
responsibility
to
where
it
truly
is,
namely
management
and
strategic
decision-­‐makers
instead
of
blaming
the
worker
or
the
office
clerk
as
is
done
today!!
Think
about
it!!
Our
defini>on
is
the
only
one
which
makes
sense.
If
your
ac>on
is
decreasing
the
company’s
value
proposal
to
the
customer,
you
are
indeed
was>ng
everyone’s
>me.
There
is
no
other
possible
defini>on
of
right
or
wrong
in
business!!
As
such,
nowadays,
most
of
the
defects
inside
an
organisa>on
go
unno>ced!!
Mathema'cs
applied
to
Business
Theory
19
PART
3:
THE
MATHEMATISATION
OF
BUSINESS

20. The
Zen
Organisa>on
Let
us
now
sum
up
our
findings
in
this
final
slide.
First,
we
redefine
the
concept
of
defect
to
mean
any
ac>on
within
the
organisa>on
decreasing
the
value
proposal
of
the
business
towards
its
core
clients.
This
defini>on
being
for
us
the
only
valid
way
of
describing
what
a
business
blunder
is.
Second
we
introduce
the
transverse
no>on
of
Business
Systems
Third,
we
say
that
our
criteria
for
judging
whether
the
Six
Sigma
benchmark
has
truly
been
reached
is
to
check
that
every
single
Business
System
within
the
organisa>on
has
an
owner.
Once
that
achieved,
you
have
cleansed
your
organisa>ons
and
are
now
Six-­‐Sigma
compliant.
You
have
now
reached
the
status
of
a
Zen
Organisa>on
aper
having
“mathema>sed”
your
business
thinking.
And
now,
as
long
as
you
are
coping
with
short-­‐term
survival
issues,
your
business
is
there
for
the
longer
term,
posi>oned
as
an
innovator
rather
than
just
a
survivor.
Mathema'cs
applied
to
Business
Theory
20
FINAL
STATEMENT