Sustaining Six Sigma Efforts
Does your company have a sustainable Six Sigma implementation? If not, perhaps it's time to go beyond Six Sigma. Here’s a walkthrough with Naresh Shahani.

In the last five years, several companies in India have started implementing Six Sigma as a business philosophy. The successful implementation experience of GE and several others in the Western world, and more importantly, the powerful methodology in itself, makes a compelling case for all organizations to implement Six Sigma. Do these companies have a sustainable implementation or is it just going to be the new fad that will go away?

As a global organization which helps companies systematically improve process with methodologies like Lean Six Sigma and beyond to innovation capabilities, we have noticed a few but critical issues / hurdles that seem to surface in these companies during the second / third year of implementation. Six Sigma is a very powerful methodology for solving performance improvement issues, but in order to have a sustainable Six Sigma implementation, companies need to go beyond Six Sigma to offer a wider breadth of services or "Total Performance Excellence". But first, here are a few examples of companies working with just Six Sigma and the issues they are experiencing.

  • Dependency on a few individuals. A large area of one company took on the Six Sigma implementation. The leader brought in personal conviction, support and the needed resources. In the very first year this division saved over Rs 30 crore. The stage was now set for a company-wide roll-out under the leadership of this successful executive. However, this person resigned from the company due to personal reasons. The result? A major slow-down of the initiative. Companies like GE have successfully managed to implement Six Sigma for more than a decade. Further, during this time, the CEO has also changed but the initiative continues. The first critical challenge being experienced is: How can the deployment of Six Sigma be made less dependent on a few individuals?
  • Greater ownership. At another company, an experienced Six Sigma master black belt was hired to lead Six Sigma deployment. (Incidentally, this seems to be the most prevalent practice.) The initiative was launched with much fanfare, and the senior management team and champions were trained. Bellwether projects were identified, and various training programmes were conducted. These projects resulted in savings in excess of Rs 12 crore. The company invested in and trained several full-time Six Sigma black belts. Today, the deployment leader and this team of black belts (they don’t like to be called a department) are the drivers of Six Sigma in the company. The second challenge companies are experiencing is: How should we ensure ownership of the initiative at all levels?
  • Launch of another major initiative. At yet another company, the implementation of Six Sigma has been in progress for over three years. The results are impressive—the company has saved over Rs 75 crore in the three-year period. However, recently, this company launched another major change management process. A new leader was asked to head this initiative. The focus of the management team was diverted. The full-time black belts felt threatened. They began to quit, resulting in a slow-down of the implementation. The third critical question: How can we integrate major new initiatives while retaining the success momentum of the older ones?

These three case studies illustrate the hurdles to continued success. Are these the symptoms or the causes of not achieving the desired outcomes? A survey of best practices in implementing Six Sigma found that the major reasons for disappointments are:

  • Lack of management conviction. This is often considered a principal reason for the implementation failure of any change initiative, let alone Six Sigma. According to the survey, the leadership has clarity on the strategic importance of the Six Sigma initiative. What is often less debated is how the leadership would like to integrate Six Sigma with the fabric of the enterprise. The temptation is often to listen to the best practices and follow them blindly until the organizational culture directly or covertly resists the change. The leadership must therefore spend time and energy to understand the dynamics of Six Sigma. This will enable them to zero-in on the critical issues of integrating Six Sigma into the wood-work of the organization, and to play the role of champions effectively.
  • Primary focus on training / hiring black belts. To many people in companies, all Six Sigma means is training black belts and working on projects. Hence, very early in a typical Six Sigma implementation, black belts are trained to launch bellwether projects. This provides the initial momentum as the training is spread over five months and the projects take about six to eight months to closure. Is the process all about training and the initial projects? Should the onus then shift to the full-time black belts to keep themselves occupied and go from pillar-to-post to take on new projects? Some of the early phases of a Six Sigma implementation are often skipped, and therefore critical planning activities to develop a Six Sigma system are often unaddressed.
Who pays for Six Sigma?
The highly successful and documented case study of Six Sigma implementation at GE is commonly cited world-wide. The fact that during the first year of implementation GE spent more money than it saved is far less known. Successful implementers create a separate initial budget for this effort. This takes care of the up-front resistance. But in year two of implementation, who should take on the costs to sustain Six Sigma? Based on the initial results, and if the champions are convinced, they should have no resistance in sustaining the initiative. This means including year two costs in their operating budgets. After all, the projects are directed towards ensuring that these champions deliver their profit centre / departmental objectives.

In our experience, one the most critical missing links in the chain is the Six Sigma management system. Not unlike other major initiatives such as SAP and new product launches, the development of a robust infrastructure is a must for Six Sigma implementation, and takes care of the longer term issues that inevitably crop up. This is why the knowledge gained from other large-scale change management initiatives is of great help. What were some of the critical issues that came up? How did we deal with them? What should we be careful about to ensure that the positives of our culture are protected?

Merely copying what worked at GE and other places could be counter-productive. For that matter, canned answers from successful Six Sigma consultants or in-house deployment leaders recruited from other successful implementers will not help.

Assessing the implementation
When going beyond Six Sigma to Total Performance Excellence is seen as a business philosophy, then the company's Six Sigma implementation can be sustainable, drive organizational change, and identify and prioritize improvement needs, then drive them to create an action plan and implement it flawlessly year after year. A simple method to test the effectiveness of your implementation (besides tangible savings, which do occur) would be to ask if the following changes are visible in the organization:

  • the leadership team collectively has a clear understanding of Total Performance Excellence and how it means going beyond Six Sigma for real culture change and results. The goals (both tangible and intangible) are defined and owned.
  • the company-specific roadmap to integrate Total Performance Excellence into the operating culture is well in place.
  • champions see the benefits of not only sponsoring Six Sigma projects, but other methodologies such as Lean for waste reduction, or TRIZ to drive new product or process design to deliver their goals, and are willing to budget the costs of supporting full-time employees and other needed resources.
  • the project pipeline is full. New projects are being continuously identified and prioritised.
  • Your deployment teams are being assigned larger roles in the organization. This serves two objectives. One, it shows your company's Lean Six Sigma involvement is moving up the leadership ladder, and two, the methodologies you have put in place are being used in daily work and not just when assigned to projects.
  • the role of the deployment leader has evolved. From mentoring, supporting and leading the Six Sigma implementation, the role has moved on to a larger space of business excellence -- again, Total Performance Excellence. They use their knowledge and experience to identify the next methodologies and practices that will benefit the organization. Further, they take on the responsibility of integrating and expanding the initiative to their suppliers and customers.
  • the infrastructure for Lean Six Sigma (Total Performance Excellence) is adaptable and changing to the newer needs of the organization. After all, the goal is to raise the management capability to deliver performance excellence.
  • newer methodologies and tools that get introduced do not require the creation of a new / competing infrastructure.
  • at least 50 percent of the organization has been touched by the initiative after three years.

All change has the potential to create unintended consequences. Organizations that periodically review the effectiveness of their implementation are more likely to make their journey a success. If not, this exercise may also end up as a flavour of the year. It will then fizzle out till the next buzzword shows up. As ringside-view participants, we are already seeing the signs of this happen in a few cases. The next few years will show us the real implementers, while the others would have moved on the next fad of the year. Do we already hear the innovation buzzwords doing the rounds in corporate India?

The author is the Managing Director of Breakthrough Management Group India. He may be reached at nareshs@bmgindia.com.