Farhatullah-DiscussionCase4

Discussions Questions

Why did you select the books?
What are the reasons you feel these business practices are important?
What are the concepts that are discussed and how do they relate to the class topic?
Do you agree/disagree with the authors’ hypotheses?
Any assumptions within the books?
Your conclusions?
Any additional data you find relevant to the topic?

The review should be 3–4 pages in length, 12-point font, Times New Roman font, and double-spaced. This page count does not include the title page, tables, graphics, or reference pages. Do not submit an abstract. In addition, submit the final copy as a .DOC or .PDF. This paper is in APA format.

Due in 10 hours, 10:59est time

Focus Take-Aways

Rating (10 is best)

Overall Applicability Innovation Style

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The Six Sigma Revolution

How General Electric and Others Turned Process Into Profi ts

by George Eckes

274 pages

• Inspection is an inherently ineffi cient technique for attaining high quality.

• Many consultants have made Six Sigma appear more diffi cult than it really is.

• To work, Six Sigma must have the complete support of management.

• Change management is essential to the successful introduction of Six Sigma.

• Avoid the tendency to jump to a solution as soon as you have identifi ed a problem.

First, conduct a root cause analysis.

• Decide how you will observe and measure the increased effi ciency of the process

under review.

• Once you know the essential measurements, assemble your “dashboard of data”

— the statistics you need to watch.

• Either a lack of statistics, or a fi xation on them, can doom a Six Sigma initiative.

• Before you change a process, identify the customer benefi t.

• Creating “black belts” is a good idea, but management should not put the entire

responsibility for Six Sigma on their shoulders.

8 9 7 8

Leadership & Mgt.

Strategy

Sales & Marketing

Corporate Finance

Human Resources

Technology & Production

Small Business

Economics & Politics

Industries & Regions

Career Development

Personal Finance

Concepts & Trends

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Relevance

What You Will Learn

In this Abstract, you will learn: 1) How to launch a Six Sigma quality control process;

2) What measurements and information you need; 3) How to focus improvements on

business objectives and customer needs; and 4) How to troubleshoot common problems.

Recommendation

George Eckes’ experience in quality control includes an instance where he had the

temerity, just out of college, to ask W. Edwards Deming, then an octogenarian, to

elaborate on his views about quality. “Those are the most stupid questions I have ever

heard! Go read some of my books,” the cantankerous quality czar responded. No one

reading this volume can doubt that Eckes has done his homework ever since. His blend

of experience, theoretical expertise and common sense make this a very effective Six

Sigma manual, although it is a little light on case studies. One of the book’s most valuable

elements is Eckes’ keen analysis of the pitfalls that can fl ush all your best Six Sigma

intentions down the tubes, even as a row of consultants tell you it is a panacea for all your

woes. getAbstract.com recommends this book to anyone who is about to call a consultant

and venture into the Rasputin world of Six Sigma.

Abstract

In the Beginning…

Building a better mousetrap would be simple, except for the fact that your competitors

are all trying to do the same thing. You need to bring the mousetrap in on time and under

budget, and simultaneously you have to keep your current mousetrap-selling business

running well and earning profi ts. If you seek a competitive advantage in the real world

marketplace, you must constantly improve product and service quality.

Historically, U.S. companies have relied upon inspections for quality control.

Unfortunately, this is a highly ineffi cient method, which is only competitive if your

competitors use it too. Improving quality became a frenetic effort in U.S. management

circles in the 1980s. Anything that might work was worth a try as U.S. industry

endeavored to remain internationally competitive. The results: many quality approaches

work to some degree, and the most effective methods are based on concrete measurements

of success or failure.

For the Six Sigma quality improvement process to work — and it has been made

to appear much more complex than it is — management must back the initiative

wholeheartedly. The secret to doing so is “Business Process Management,” which

becomes the vehicle by which management at all levels undertakes and sustains active

involvement. Key elements include:

• Establishment of strategic objectives for the business.

• Determination of core processes and sub-processes that enable the achievement of

the strategic objectives.

• Identifi cation of the key players in those processes, that is, the process owners.

• Determination of the key measures for gauging process effectiveness and effi ciency.

• Collection of data.

“What makes Six

Sigma different, in

part, is its focus on

the involvement of

management at all

levels of an organi-

zation.”

“While many ap-

proaches to im-

provement can

work, fact-based,

data-driven im-

provement is best.”

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• Establishment and use of criteria for which projects to select.

• Ongoing management of the essential processes focused on strategic objectives.

The second necessary component of the Six Sigma system involves “Process Improvement

Methodology.” This covers both process improvement and the wholesale creation of new

processes. One solid approach, popularized by General Electric (GE) and several other

organizations, is called DMAIC. The acronym stands for:

• Defi ne — Determine what customers need from a given process, and map the pro-

cess so improvement can begin.

• Measure — Defi ne ways to gauge how effi cient a process is.

• Analyze — Identify the process’ shortcomings; ask how to alleviate them.

• Improve — Create and implement a solution.

• Control — Once you have a better mousetrap, keeping the process operating consistently

so that quality doesn’t drift. Gather and analyze data to verify proper performance.

Each of these facets of Six Sigma implies, or introduces, the notion of change. Without

change, process improvement cannot occur, and without process improvement, there can

be no Six Sigma. Thus, the concept of managing change is critical to any Six Sigma

discussion. The normal human response to change is resistance. Be prepared to work

through it. Too many change initiatives fail due to an improper, imbalanced application of

resources. Generally, too many resources are committed to the technical aspects of change,

while too few are committed to ensuring that people accept the change initiative itself.

Any quality initiative needs management’s active support to survive. And, managers

will only support a quality initiative that is a vehicle for achieving business objectives,

so introduce Six Sigma with that focus. The idea is to make a process work better, in

whatever way or by whatever measure management may employ. Quality improvements

should enhance your organization’s effi ciency. What does being effi cient mean? How do

you defi ne effectiveness? Base your answers on your customers. The goal is to meet or

exceed customer needs.

Taking Your Company’s Pulse

Each process must measure its own effectiveness. If no measurement can tell you

accurately how well a given process is working, you can’t know if it’s working

properly. Once you know what measures you need to track, and how to gather the

data, begin creating your own “dashboard of data.” This dashboard is analogous to the

instrumentation readout on the dashboard of your car, a convenient place to take a quick

glance and see how the vehicle is operating. Is the car going too fast? Is the engine

temperature normal? How much gas is left? How many RPMs are you generating? Such

an approach assures that managers always have the data they need to understand how

effi ciently the organization is operating.

Companies tend to make two classic mistakes when assembling their dashboards. One

is collecting the wrong data. The second is collecting too much data. Data overload can

be just as debilitating as gathering the wrong information. Imagine a data dashboard a

mile long. All you want to know is how fast you’re going, yet you must take your eyes

off the road and pore over that dashboard for hours, looking for the right gauge — not a

very safe way to drive! The best approach is to measure only those factors which really

matter to your customers.

To be meaningful, effi ciency must lead, directly or indirectly, to greater customer

satisfaction. Unless a process brings about a desirable result from the customer’s point

“Failure to manage

change in the Six

Sigma organi-

zation will result

in substandard

results, if any.”

“The emphasis on

being customer

focused must

extend to the inter-

nal customer.”

“Many Six Sigma

consultants are

statisticians. To

hear them in a

seminar is to

believe better

quality is the re-

sult of more com-

plex statistics.”

“It’s like creating

a Rasputin in your

organization, think-

ing that greater

profi tability comes

from turning your

business over to

consultants who

know something

you don’t.”

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of view, your organization risks becoming extremely effi cient at generating a product

or service that, unfortunately, is met with little or no marketplace demand. Customer

relevance is critical, so companies of every ilk embark on extensive continuous efforts to

fi nd out exactly what their customers desire. Knowing what your customers want is the fi rst

step in designing a process that helps your organization meet clients’ needs effi ciently.

Old hands at Six Sigma will tell you that much of its success depends on which dragons

you choose to slay. In other words, out of the myriad of potential improvement projects,

how do you know which issues to tackle fi rst? The answer is simple: fi rst undertake

those initiatives which promise to have the biggest impact on the organization’s ability

to accomplish its business objectives. This is particularly crucial at the beginning, to

demonstrate Six Sigma’s impact.

With its emphasis on measurement and data, you could say that Six Sigma uses the scientifi c

method to achieve quality improvement. However, measuring customer satisfaction is only

one aspect of successful Six Sigma. The other aspect is cultural. You must inculcate your

corporate culture with commitment to the never-ending pursuit of perfection.

Start-Up

You can’t pass go without management support. Given that, keep these elements in mind

as you start your initiative:

• Select project team members based on their ability to improve the process under

review. Project teams usually last for about six months.

• Don’t initially jump to a discussion of solutions. The team should fi rst create a spe-

cifi c, measurable problem statement that describes the project’s desired impact.

• Management must provide guidance on the project’s boundaries, the “project scope.”

• Focus on the process under review; identify its internal or external customers. Create

a map of how the process currently operates before you try to change it.

These steps are particularly valuable within a customer-focused company. Such companies:

• Think about and talk about their customers frequently.

• Continually assess their customers’ perceptions.

• Resolve issues in a way that will benefi t their customers.

• Make sincere amends to customers who have service issues.

• Make any changes necessary to maintain service levels.

If you’re going to change a process, your customers must be willing to pay for that

change. Indirectly, customers pay for each step in a given process. To make sure you

are really fi xing the problem from the customers’ point of view, conduct “root cause

analysis.” Rather than addressing an issue on the surface, drill down to the root cause.

If you own a coffee shop and your staff is overwhelmed by testy customers during the

morning rush, maybe you need a separate team just to fetch donuts while other staffers

serve people and work the register. But, more staff may not solve the problem. Maybe

what really irks customers is the crazy traffi c pattern in your parking lot, so they are

already aggravated when they walk in the door. The most pivotal step in analyzing a

problem is verifying the root cause.

Another often-overlooked step is consolidating the gains you make. Make sure your

solutions stick. One key is proper documentation that explains the improved process

“Both at the stra-

tegic and project

level, Six Sigma

works because of

its rigor and disci-

pline.”

“Effectiveness is

meeting and ex-

ceeding the needs

and requirements

of the customer.”

“Effi ciency is the

time, cost or value

of the activities

that lead to cus-

tomer satisfaction.”

“Each process

must measure its

effectiveness and

effi ciency.”

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in specifi c detail, so that even employees without formal training can implement it

and maintain the improvements. Emphasize consistent performance throughout. After

you’ve done all that hard work to reform a process, make sure that you preserve and

institutionalize your gains.

Troubleshooting

Six Sigma initiatives can run into trouble several ways. Beware of these potential pitfalls:

• Getting hooked on numbers — Management can become more fascinated with sta-

tistical measures than with the actual process. Management must realize that better

quality does not come about through the use of more sophisticated statistics.

• Focusing only on cost — Don’t use Six Sigma exclusively to attain cost reduction. Cost

is just one factor in the equation, although it is clearly important. Avoid diseconomies;

don’t be so focused on cost that you overlook opportunities to add customer value.

• Ignoring the culture of change — Six Sigma’s cultural element is crucial. Your

employees must be convinced that they are, individually, in the change business.

People who believe that process improvement is not their job create problems.

• Ducking root cause analysis — Six Sigma also can fail if teams take a sloppy

approach to root cause analysis. The natural tendency is to jump from identifying a

problem to fi nding a solution, without fi rst addressing the root cause. You may solve

a symptom, but you’re leaving the disease unchecked.

• Slipping up on soft skills — Pay attention to the so-called “soft skills” of communica-

tion and human interaction. Great statistical measurements won’t do you much good

if people lack meeting skills, cannot communicate and are not able to work together.

• Blaming the black belts — Designated, trained Six Sigma leaders, who are called “black

belts,” can accelerate the adaptation of Six Sigma methods. A greater danger, however,

is that the entire responsibility for the Six Sigma program will be dumped in the black

belts’ laps. That’s a huge blunder. Management must accept ongoing involvement.

Six Sigma is ultimately a way to change an organization. As such, it must be as carefully

managed as any other change initiative. For maximum results, account for the likelihood

of resistance and encourage participation, enthusiasm and involvement.

About The Author

George Eckes’ Six Sigma client list includes General Electric, Lithonia Lighting and

Volvo Trucks North America, to name a few. Since 1996, the Colorado company he

founded, Eckes and Associates, Inc., has served as the primary consulting organization

for General Electric’s Six Sigma quality initiative. The consulting group specializes

in quality improvement.

Buzz-Words

Business process management / Change initiative / Dashboard of data / Process

improvement methodology / Project scope / Root cause analysis

“Projects to im-

prove quality

should be select-

ed that have the

greatest impact on

the business ob-

ectives of the orga-

nization.”

“Project teams

need to establish

the customers of

their project and

what customers

require of the pro-

cess targeted for

improvement.”

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Focus Take-Aways

Rating (10 is best)

Overall Applicability Innovation Style

Strategic Six Sigma

Best Practices From The Executive Suite

by Dick Smith and Jerry Blakeslee with Richard Koonce

303 pages

Leadership

Strategy

Sales & Marketing

Corporate Finance

Human Resources

Technology

Production & Logistics

Small Business

Economics & Politics

Industries & Regions

Career Development

Personal Finance

Self Improvement

Ideas & Trends

• Most companies adopt Six Sigma to improve operational performance.

• Many companies undertaking Six Sigma are unaware of its strategic implications.

• Corporations like GE, Dow Chemical and Lockheed Martin have recognized the

strategic power of the Six Sigma methodology.

• As corporate leaders experience the transforming power of Six Sigma, they frequently

move to expand it throughout their organizations.

• In order to reap the full benefi ts of Six Sigma, it should be integrated into the strategic

planning process.

• Strategic Six Sigma drives organizational change and aligns all aspects of a business

with the overriding goal of exceeding customer expectations.

• Within this framework, Strategic Six Sigma encourages executives to view business

units as interdependent processes designed to serve customers, not as silos.

• Strategic Six Sigma requires strong and committed support from the top.

• It’s not uncommon to encounter organizational resistance to Six Sigma.

• Strategic Six Sigma is a full-time, ongoing initiative.

9 10 9 9

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Relevance

What You Will Learn

In this Abstract you will learn: 1) How Six Sigma can be used to improve business

strategy in the same way that it’s used to better operational performance; 2) How to apply

Six Sigma to your company on both an operational and strategic basis, and 3) Specifi c

techniques for use in integrating Six Sigma methodology into your strategic planning.

Recommendation

Dick Smith, Jerry Blakeslee and Richard Koonce demonstrate that the Six Sigma

methodology can and should be applied to the highest levels of strategic planning. The

authors illustrate how the rigors of Six Sigma can improve your performance in terms

of overall strategy, growth and customer satisfaction in the same way that it streamlines

operations on a production fl oor. getAbstract.com strongly recommends this book to

business leaders, executives and managers, all of whom will benefi t from its hands-on

advice for integrating the tenets of Six Sigma into corporate strategy.

Abstract

The Sixth Business Sense

In the mid-1980s, in the bustling manufacturing days of the Motorola Company, an idea

was born. It was a new notion of how to cut costs, improve processes and accelerate

product cycles. The new methodology that arose from this thinking, which relied on sta-

tistical measures of quality improvement, has become known across the business world

by the phrase, Six Sigma. Six Sigma helps companies streamline the operational aspects

of their businesses and improve their bottom lines. Today, however, business leaders are

employing Six Sigma as a high-order leadership tool that enables them to:

• Formulate new business strategies or implement existing ones;

• Respond to increasingly challenging consumer expectations;

• Facilitate mergers & acquisitions;

• Promote the adoption and implementation of e-business ventures;

• Accelerate revenue growth;

• Drive innovation;

• Push systemic and sustainable culture change;

• Manage fi nancial reporting and business risk.

Six Sigma has evolved into a vehicle for transforming organizations through the deploy-

ment and implementation of corporate strategies. Former General Electric icon Jack Welch,

for example, states that Six Sigma has “changed the DNA” of GE. Honeywell CEO Larry

Bossidy credited Six Sigma with increasing productivity by six percent per year “forever.”

With such powerful advocates in the corporate domain, small wonder the true strategic

power of Six Sigma is now being fully appreciated.

Performance Improvement

The events of September 11, 2001, will cost global companies in excess of $150 billion.

Hundreds of companies were forced to declare Chapter 11 bankruptcy. Experts say that a

“Many years ago,

legendary man-

agement consul-

tant and author

Peter Drucker

remarked that the

purpose of busi-

ness is to create a

satisfi ed customer.

By adopting Stra-

gic Six Sigma

practices and prin-

ciples within your

organization, you

can do exactly that

— and create

robust quality sys-

tems in the pro-

cess.”

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quality system failure in the U.S. intelligence system was partly to blame for the tragedy.

There are many other examples of quality failures and their associated risks and costs.

Consider the Chernobyl nuclear disaster. According to the Ukrainian Health Ministry,

that disaster is now responsible for taking some 125,000 lives and striking 3.5 million

people ill. Closer to home, the Challenger space shuttle disaster and the Bridgestone/

Firestone/Ford tire failures illustrate the unacceptable costs of letting quality slip. Today,

failure is not an option.

The key to maximizing performance and avoiding quality setbacks is the creation of

an effective quality system — an enterprise-wide framework of carefully managed pro-

cesses designed to ensure that the consumer’s demands are met and that the profi tability

of the business is preserved. Such systems must provide for accurate performance mea-

surement, a task that is accomplished by applying Strategic Six Sigma principles and

practices. There are four basic steps:

1. Measuring the conformance of the enterprise

to customer

requirements;

2. Establishing processes that will reduce variations that lead to failures in conforming

to customer requirements;

3. Developing new products and services designed to better meet customer and market

requirements;

4. Repeating steps 1-3 continuously.

You can use Six Sigma to improve performance incrementally and improve quality,

or to enhance and integrate the strategic approaches that lead to corporate success.

It is this strategic implementation of Six Sigma that will be increasingly critical to

corporate achievement in coming years. Strategic Six Sigma can support globaliza-

tion, M&A activity, e-business planning and development, supply chain re-design,

enhanced customer relationship management, management of emerging technologies

and much more.

The Rocky Road To Six Sigma

To ensure that your company actually reaps the benefi ts that Six Sigma can provide,

you must get beyond the transactional level in your implementation. The transactional

level encompasses all the spaces in which everyday work is accomplished: the systems,

technologies, interactions, exchanges, transactions, processes and management practices

through which your business is conducted. Of course, you’ll need to pay a considerable

amount of attention to the transactional aspects of your company. But enhanced Six

Sigma implementation goes further.

While companies can derive substantial productivity increases through careful atten-

tion to their transactional processes, applying Six Sigma to the transformational level,

which includes culture, strategy, leadership, mission statements and vision, can re-create

an entire company. The gains that can be achieved at this level far exceed incremental

improvements available at the operational level. Experience has shown that deployment

of the Six Sigma initiative is the key to success. Toward that end, you should:

1. Build a committed leadership team. Six Sigma can’t depend on just one person. It

takes a strong community of leaders at all levels within an organization to drive ini-

tiatives forward. Failure to create this guiding coalition for change is likely to derail

even the most sincere effort.

“Six Sigma is

about delivering

value to share-

holders. It is all

about driving

results.”

“The senior lead-

ership team must

own, measure and

improve the lead-

ership processes

in any company.”

“It needs the

heartfelt involve-

ment of a dedi-

cated cadre of Six

Sigma leaders

both to champion

Six Sigma im-

provement targets

and to break down

organizational

resistance and

roadblocks to their

achievement.”

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2. Merge Six Sigma with strategic planning. An organization’s strategic planning

and deployment must be integrated with Six Sigma. Even today, many companies

have a haphazard commitment to strategic planning. Frankly, turf wars and confl ict-

ing agendas among the senior executive teams of many companies make strategic

planning a political football. Introducing Six Sigma into the planning process can

enhance its clarity and direction.

3. Encourage a passion for communicating with customers. It is important to take a

consistent, disciplined approach toward your communication with customers. Cus-

tomer intelligence should not be anecdotal. Critical customer requirements must be

known and quantitatively measurable.

4. Re-design the business along a process framework. Don’t fall into the trap of view-

ing your business as a series of independent silos or functions. You must bridge the

gap between existing business activities and view them as a family of interrelated

processes that must be synchronized and aligned to support overall enterprise goals.

5. Develop quantifi able measures and demand tangible results. You have to agree on the

metrics that will determine whether you’re headed in the right direction.

6. Establish incentives and reward performance. Metrics only measure where you are

now. By themselves, they cannot change where you’re going. Incentives and rewards

are important in actually changing the behaviors of individual workers, as they

embrace new values and attitudes such as team-based projects.

7. Recognize the need for full-time commitment. Many companies fail with Six Sigma

because they don’t fully staff the project with the right internal leaders to effectively

implement and manage Six Sigma processes over time. You need to dedicate the best

possible individuals to the mission of transformational change.

Overcoming Organizational Resistance

Larry Bossidy of Honeywell and Jack Welch of GE both experienced resistance to Six

Sigma implementation within their organizations, so don’t be surprised if it happens to you,

too. Welch resorted to outright arm twisting, insisting that without certain levels of training

no one would be considered for a management job. Bossidy adopted similar standards.

Welch experienced pushback from employees when trying to integrate Six Sigma thinking

into daily business activities. The level of resistance became apparent when Welch asked

senior GE managers to send their most promising employees to Black Belt school — the

highest level of Six Sigma training. No one wanted to give up the best managers; all senior-

level executives had their own goals to meet and wanted to retain their brightest people.

Welch estimates that less than half of the early Black Belt candidates were really the best

and the brightest — the others were basically stand-ins. Only persistent and emphatic pres-

sure from the very top — in GE’s case from Welch himself — can overcome pushback.

Of course, not every company has a Jack Welch to propel it along. For the rest of us, the

best tool for toppling organizational resistance is a committed team of leaders who can

establish a sense of urgency that cascades through the ranks of the organization. Start by

generating some short-term project success stories that buttress Six Sigma thinking.

Six Sigma Strategy

Six Sigma has a powerful impact on the strategic level when companies merge it into

their strategic planning and rollout function. This ambitious undertaking involves align-

“There’s no way

we can overstate

the importance of

leaders building

strong employee

commitment to

Strategic Six

Sigma at every

level.”

“A growing number

of companies

today are begin-

ning to realize the

full, strategic impli-

cations of Six

Sigma, especially

as an engine to

accelerate corpo-

rate strategy and

organizational

transformation.”

“Some companies,

including GE, Hon-

eywell and Ray-

theon, are already

taking a strategic

approach to their

use of Six Sigma,

using it to integrate

their business

strategies and to

support the

achievement of

near-term as well

as longer-term

business objec-

tives.”

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ing the core business processes with the needs of markets and customers, systematically

eliminating defects from existing products and services, designing new processes, and

implementing a new infrastructure and leadership system. If you think of Six Sigma not

merely as a process improvement system, but also as a catalyst for change, you’ll have a

better perspective of its strategic implications. Among its strategic benefi ts:

• Defi nition of Key Performance Metrics. Six Sigma will help the organization defi ne

both the core enterprise issues it faces and the key performance metrics that will

measure the organization’s success.

• Prioritizing Specifi c Improvement Projects. Most business leaders say, “This Six

Sigma thing has to pay its own way.” Some projects, the proverbial low-hanging

fruit, involve quick results and immediate payoffs. Others are more long-term. One

step is critical: assigning specifi c fi nancial goals to each Six Sigma project that an

organization undertakes.

• Aligning the company leadership with the projects at hand. You’ll need deployment

champions in place who can help bust through organizational roadblocks and bottle-

necks at the divisional and regional levels. One of the keys to Six Sigma success is

rapid deployment of Six Sigma professionals throughout the organization.

• Enhancing communication with customers and the marketplace. Many companies

fail to understand their customers because they assume they already do. Others don’t

distinguish between short-term and long-term customer satisfaction. Still others have

good data, but don’t share the data within the organization, keeping it bottled up in

silos where it is ineffective.

A successful Strategic Six Sigma implementation can create a fi nely honed organiza-

tional machine whose core businesses are so aligned to the marketplace that they con-

sistently meet or exceed customer expectations. Six Sigma becomes not so much a

destination as a continual road leading to successful results, as companies build an ongo-

ing business process framework to sustain the Strategic Six Sigma momentum.

About The Authors

Dick Smith is the Partner-in-Charge of IBM Business Consulting Services Six Sigma

Center of Excellence. He has over a dozen years experience in consulting on strategy,

change management, and process consulting. Jerry Blakeslee was one of the architects of

the IBM Business Consulting Services Six Sigma approach and serves as a Partner in the

Six Sigma Center of Excellence, providing Six Sigma business transformation services

to a broad range of organizations. Richard Koonce, the author of three previous books,

is a senior contract consultant to IBM Business Consulting Services and a nationally

recognized expert on job and workplace trends.

Buzz-Words

Black belt / Strategic Six Sigma / Transactional / Transformational

“As organizations

everywhere are

forced to do more

with less, to trim

costs while grow-

ing profi ts, and to

move quickly in

new business

directions, Strate-

gic Six Sigma

thinking and best

practices will play

a growing role.”

“Strategic Six

Sigma is a vehicle

to help you a-

chieve your busi-

ness destiny. It will

forever transform

your company,

your customers,

your people and

your processes.”

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1 of 5

What Is Six Sigma?

Rating
9 Applicability
8 Innovation

10 Style9

Focus
Leadership & Management

Strategy

Sales & Marketing

Finance

Human Resources

IT, Production & Logistics

Career & Self-Development

Small Business

Economics & Politics

Industries

Global Business

Concepts & Trends

Take-Aways
• Six Sigma is a way to improve the operations of your whole business or individual

departments by focusing on customer expectations and requirements.

• With Six Sigma, you improve customer satisfaction and reduce cycle times and defects.

• The Six Sigma approach entails meeting customer expectations and requirements
99.9997% of the time.

• The basic Six Sigma problem-solving process is DMAIC: Define, Measure, Analyze,
Improve and Control.

• The involvement of top management is critical to success.

• You will also need the commitment of your front-line employees.

• There are three approaches to a Six Sigma program: 1) A total business transformation;
2) The strategic improvement of selected areas, and 3) More limited problem solving.

• The Six Sigma Black Belt works full-time to lead the change effort.

• The Master Black Belt acts as a coach, mentor, or consultant.

• Other team members include the Green Belt, Champion and Implementation Leader.

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Book: getab.li/2089

http://getab.li/2089

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Relevance
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What You Will Learn
In this summary, you will learn:r1) The definition of Six Sigma, as well as its goals, dangers and possible
benefits; 2) The tools and techniques encompassed within the Six Sigma philosophy, and 3) How to implement a
Six Sigma program in your own company.

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Review
At last! A short, easy-to-read and effortlessly understandable explanation of Six Sigma. In keeping with the brevity
and conciseness of this book, we’ll keep this review short: If you want to know what Six Sigma is, what it can
accomplish, why it matters to you and how to implement a program of your own, getAbstract strongly recommends
that you start with this book.

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Summary
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“Six Sigma puts the
customer first and uses
facts and data to drive
better solutions.”

“Six Sigma is a
total management
commitment and
philosophy of
excellence, customer
focus, process
improvement and the
rule of measurement
rather than gut feel.”

What Is Six Sigma?
Six Sigma is a way to better manage your business or department by putting the customer
first and using facts and data to achieve better solutions. Six Sigma improves customer
satisfaction, compresses cycle times and reduces defects. The goal is complete perfection
in these areas 99.9997% of the time, based on the normal bell curve.

In order to achieve this high level of performance, you commit yourself and your company
to a philosophy of excellence. You must focus on your customer and process improvement,
and you must look to facts rather than intuition or gut feelings. The ultimate goal is to make
every area of your organization better able to meet the changing needs of your customers,
while adapting to shifting markets and technologies.

Total Quality Management (TQM) was a popular improvement-focused program in the
1980s that has died out in many companies. Six Sigma is different. It is customer focused,
produces major returns on investments and changes how management operates.

It doesn’t just create improvement projects, it requires senior executives and leaders to
learn new approaches to thinking, planning and executing. It involves working smarter, not
harder, to achieve results by combining organizational teamwork with reliable systems.

Six Sigma Measurement
The Six Sigma approach is based on the statistical measure of the performance of a process
or product. It provides both a goal – near perfection – and the management system through
which to achieve this goal.

To be a Six Sigma company, you must perform at the Six Sigma level, which means
99.9997% perfection. This begs the question: What is perfection. The answer – whatever
your customers say it is. The first step in the Six Sigma process is determining exactly what
your customer expects. In Six Sigma terms, these expectations are “critical to quality,” or
CTQs. The task, then, is to identify these CTQs, create a method by which to measure them
and compare the effectiveness of various processes for meeting them.

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“Six Sigma efforts
target three main areas:
improving customer
satisfaction, reducing
cycle time and reducing
defects.”

“The goal of Six Sigma
is to help people and
processes aim high
in aspiring to deliver
defect-free products and
services.”

“The first step in
calculating sigma or
in understanding its
significance is to grasp
what your customers
expect.”

You are searching for the correct set of processes that will result in a defect rate of
just .0003%. In other words, your product and service will completely meet your customers’
expectations 99.9997% of the time. Defects generate complaints and costs. The more
defects you have, the more expensive it is to correct them and the greater your risk of
losing customers.

Operating at a sigma level lower than six will produce dissatisfied customers that breed
into more dissatisfied customers as they tell others about their bad experiences with your
firm. The typical unhappy customer tells 9 to 10 people about their experience, so defects
also threaten tomorrow’s customers.

Six Sigma Management
Critical to the success of a Six Sigma program is the involvement of top management. It’s
not enough to train you staff. You must make management accountable for results that are
measured through ongoing monitoring and reviews. When Starwood Hotels, which operates
the Westin and Sheraton chains, implemented its Six Sigma plan, it set up systems to hold
managers at all levels accountable for customer satisfaction, profit-and-loss statements,
employee attitudes and key process performance measures.

But top-down management is only half of the equation. For Six Sigma to succeed, you
must combine management commitment with the grass-roots enthusiasm of your front-
line employees.
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They are a key source of ideas, solutions, process discoveries and improvements.

Six Sigma Themes
The most important elements of a Six Sigma program can be summarized by six critical
themes or principles:

1. Genuine focus on the customer – Always seek customer satisfaction and value.
2. Data – and fact-driven management – Clarify key measures for gauging business

performance, gather the necessary data and analyze it using key variables.
3. A focus on mastering processes – Build in competitive advantage in delivering value

to customers.
4. Proactive management – Set goals, review them frequently, establish clear priorities

and focus on problem prevention rather than resolutions after the fact.
5. Boundaryless collaboration – Break down organizational barriers to improve

teamwork throughout the organization.
6. A drive for perfection, combined with a tolerance for failure – You must be willing

to try new ideas and approaches that have some risk of failure in order to make changes
leading to perfection.

Six Sigma Approaches
You can choose from several basic roads to Six Sigma, which you might think of as three
possible on-ramps or routes. The three general approaches to Six Sigma are:

Approach 1: The business transformation
For this approach, you launch a full-scale change initiative. This may lead to a new company
culture based on dramatic changes. Generally, you will ask teams to look at key process
areas and make recommendations for change in areas like distribution, sales, product
development and customer service.

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“In short, defects
can lead to lost
customers, and turned-
off customers tell others
about their experiences,
making it that much
more difficult to recover
from defects.”

“Training alone is not
a management system.
A management system
involves accountability
for results and ongoing
reviews to ensure
results.”

“The ideas, solutions,
process discoveries and
improvements that arise
from Six Sigma take
place at the front lines
of the organization.”

Approach 2: Strategic improvement
This approach offers the most options, since you can limit your program to one or two
critical business needs or business units. In either case, your teams and training will focus
on major opportunities and weaknesses. In some cases, this approach can lead to a full-
scale corporate change initiative.

Approach 3: Problem solving
This is the most low-key approach, in which you focus on continuing programs. Typically,
only a few people will be involved in the effort, and it is a good way to apply a limited Six
Sigma approach without producing major change through your organization.

Six Sigma Roles
Launching a Six Sigma effort will require a group of business leaders, team leaders and
facilitators. Some of these are martial art names, since they were coined by a Motorola
improvement expert who liked karate. These key roles are:

• Black Belt – The full-time person in charge of leading the change effort. He or she
is primarily responsible for launching the team, inspiring them, building confidence,
observing and helping with training, managing team dynamics and keeping the project
moving forward.

• Master Black Belt – The coach, mentor, or consultant who works closely with the Black
Belt and is usually an expert in Six Sigma tools.

• Green Belt – A person who is well trained in Six Sigma skills, but is a team member or
part-time team leader. His or her role is to introduce the concepts and tools into the day-
to-day activities of the business.

• Champion and/or Sponsor – Usually an executive or key manager who initiates and
supports the Black Belt or team project. This person helps to make sure projects stay
aligned with overall business goals and keeps other leadership team members informed
about the progress of Six Sigma projects in the organization.

• Implementation Leader – The person who is in charge of implementing the entire Six
Sigma effort. Often he or she is at the corporate VP level, reporting directly to the CEO
or other top executives. This person is involved in promoting Six Sigma thinking, tools
and habits throughout the organization.

Six Sigma Problem Solving
Typically, Six Sigma teams are diverse, since the team members come from a wide variety of
departments, job levels, backgrounds, skills and levels of seniority. However, all members
need to share a common process or model in order to work together effectively as a team.

The most common shared problem-solving methodology is the DMAIC process which
stands for:

• Define.
• Measure.
• Analyze.
• Improve.
• Control.

We’ll talk more about the various components that make up the DMAIC press in a moment,
but first, let’s look at steps that a Six Sigma team follows in tackling a business problem.
They are:

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“One of the
most remarkable
breakthroughs in Six
Sigma efforts to date
has been convincing
leaders and managers
– particularly in
service-based functions
and industries – that
mastering processes
is a way to build
competitive advantage
in delivering value to
customers.”

“The ultimate success
of the Six Sigma project
rests with those who
do the work in the area
the project was focused
on.”

1. Identifying the project – Management decides which project a team will tackle.
2. Forming the team – Management selects team members, who should have a good

knowledge of the situation, but not be so involved that they are part of the problem.
3. Developing the charter – Management produces a document that includes the reason

for the project, the goal, a basic project plan, the scope of the project and the role and
responsibilities of team members.

4. Training the team – Six Sigma leaders teach team members the DMAIC process,
generally over a one- to four-week period.

5. Doing DMAIC and Implementing Solutions – The team develops plans and
procedures, implements its solutions and measures and monitors the results.

6. Handing off the solution – The team disbands, usually with a formal and fun ceremony
to mark this occasion.

The DMAIC process itself consists of these five steps:

1. Define the problem – The team identifies the problem and its own goals. It also drafts
the DMAIC Charter, which typically includes a business case for choosing this particular
problem, a goal statement, a discussion of constraints and assumptions, a description of
the scope of the project, a listing of the players and their roles and a preliminary plan.

2. Measure – The team gathers data to validate and quantify the problem or opportunity.
It also starts the process of seeking facts and numbers that help to reveal the cause of
the problem. The three areas of measurement include outcomes, process and input, or
things coming into the process to produce change.

3. Analyze – The team looks at the details to understand the process and problem and
to identify the root cause. The team should look at many possible causes, including
methods, machines, materials, measures, environmental factors and people.

4. Improve – The team develops a solution and puts it into action. It is especially important
to critically assess proposed potential solutions in light of several criteria, including costs
and likely benefits. The team should select the most promising and practical solutions
and gain the approval of the Champion and the leadership team before implementing
any changes.

5. Control – The team develops a monitoring process to keep track of planned changes and
a response plan to deal with any problems that come up later. The team must help to focus
management’s attention and keep it informed about the outcomes of the project. Among
other things, the team needs to sell the project through presentations and demonstrations,
turn over project responsibilities to those doing the regular work, and keep the support
of management to meet the project’s long-term goals.

As the Six Sigma process proceeds, you need to be able to cope with the changes that this
process brings. As an employee, be prepared for the challenges ahead, should you be asked
to join a Six Sigma team, participate in a Six Sigma training or become a team member.

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About the Authors
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Peter S. Pande is president of Pivotal Resources, Inc., a leading organizational improvement consulting and training
firm. He has helped to guide Six Sigma initiatives at major corporations and is the co-author of the bestselling, The
Six Sigma Way, plus, The Six Sigma Way Team Fieldbook. Larry Holpp is a consultant with Pivotal Resources and
an author of books on teams and quality.

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