The Soft Side of Six Sigma – by Joe Kilbride | EPPIC

The Soft Side of Six Sigma
– Key Factors in Managing Organization-Wide Change Efforts
By Joe Kilbride

Note: The following is an excerpt from Joe’s 2-part article series in Guy Wallace’s /EPPIC’s

“Pursuing Performance”
quarterly newsletter – from the Winter and Spring 2005 issues…

Introduction
Many organizations today are dedicating significant resources to systematic improvement approaches such as Six Sigma, Lean Manufacturing, High Reliability Organization, etc.

The “hard side” of such programs, i.e., the tools and methods, are widely known and well understood. For example, most Six Sigma approaches use some form of the DMAIC methodology summarized below. (From http://www.isixsigma.com/)

What About the “Soft Side”?
For each DMAIC phase, a number of well-defined tools and methods are widely known and well understood. However, the “soft side”, or the human/behavioral/cultural factors that serve to enable, support, and facilitate Six Sigma efforts are less clear.

To better understand these factors, interviews were conducted with a number of individuals (Master Black Belts, Black Belts, Human Resource Directors, etc.) who were/are significantly involved in the successful implementation of Six Sigma initiatives that had a direct impact on company culture and business results.

Key contributors were Carl Saunders, Greg Matz, Olga Striltschuk and Wanda Sturm.

The following summarizes some of the lessons learned from a variety of companies in different industries regarding the factors that are essential in terms of the “soft side” of Six Sigma.

Summary of Key Factors
The lessons learned by Six Sigma organizations include a number of key factors that should be applicable to any major organizational improvement initiative. These factors are

Start at the Top
Get It Off the Ground
Chunk It Up
Make It Pay
Accounting
Communicate
Walk the Talk
Monitor Progress-Manage Accountability
Make It Stick

Start at the Top

Starting Point – Experience indicates that you must start at the top, but two different starting points for a major improvement initiative can be effective:

Start in a business unit, and use these results as proof of concept for an organization-wide implementation.
Start at the CEO level if he/she is committed to the approach and understands that evidence from other organizations indicates Six Sigma only fails when there is a lack of management will.
Senior Leaders Role – Regardless of the starting point, the role of the senior leader(s) in the organization or unit launching the initiative requires changing the normal ways of doing business.

Get It Off the Ground

Fertile Soil– Six Sigma can be effective in any type of structure or culture, however experience shows that Six Sigma projects are typically more successful in those organizational units where Line managers take an active role as Champion and Process Owner and a culture of involvement and improvement previously exists

Rapid and Massive Deployment – Six Sigma requires a new culture of management. In large organizations, with some history of success and maturity in quality, it may be best to implement sweeping change as fast as possible, in order to “assault and overwhelm” the existing approach, and give the culture little opportunity to resist the change.
Match the Scope of the Effort to the Maturity of the Organization—Many organizations are relatively immature in their quality approaches, e.g., 2.5 sigma quality levels, under 200 points on a Baldrige assessment. In these cases, a full-blown roll-out of Six Sigma, with numerous Black Belts, extensive training in quality tools, multiple projects, etc. may overwhelm or even paralyze the organization.

One philosophy of deployment is summed up by the saying:

Walk before you try to run.

Chunk it Up

One Project at a Time – Six Sigma seeks to make sweeping organizational change… one project at a time. By breaking the change into clearly defined projects it is less susceptible to the “boil the ocean” syndrome that is the downfall of many organization-wide change initiatives.

Limiting Scope—Each Black Belt project has a clear scope and time-frame for achievement of measurable objectives. It is common for both to be increased with each successive project.

Make it Pay

Return on Investment – One of the key factors that enhances the credibility of the Six Sigma approach is that the investment in training and improvement processes generate a significant return, i.e., it is a “pay-for-itself and then some” approach.

Accounting

Results Speak Louder Than Words—Successful projects lead to savings and revenue enhancements that generate significant free cash flow. This must be accounted for by creating a system to measure results achieved, validate savings, and demonstrate the financial value of the approach.

Strategic Alignment– It is critical that the approach for selection of Black Belt projects ensure close alignment with the strategy of the organization. One of the key roles for senior leaders is to select projects that will have the maximum impact on the business, and select the Black Belts to lead those improvement efforts.
A defined methodology for project selection is critical. Examples include Criteria Grading Matrices, which use elements of the strategic plan as Criteria for evaluating potential projects.
Projects are often selected based upon some variation of the following criteria. Projects should have:
– direct line of sight to Customer Value,
– directly support a Critical Success Factor (CSF) in the strategy
– probability of contributing $500,000 before tax (EBIT)

Without a clear link to strategy, Six Sigma can be effective at achieving results that do not directly translate to business success. In the words of one executive: “You may try to boil the ocean, when what you really need is to get a boat.”

Communicate – What You Say Matters
Effective change requires a communications program that effectively positions the approach, communicates results, clarifies changes in the approach over time, and explains the policies and practices used to address the loss of jobs.

What you say, how often you say it, how well you say it… these all matter to successful change.

A professional communications program is often developed in conjunction with the CEO and a strategic planning council. It involves a focused, coordinated six month communications blitz, with multi-media, in house video, newsletters, prepared activities for staff meetings, performance reviews, etc. For the first 18 months, the three C’s are often the focus of this communications program:
– Clarity – clear goals and measures
– Consistency – a consistent message by all leaders, a uniform reporting process across the entire organization
– Commitment – visible commitment by the entire leadership team
In some organizations, the communication program is eventually expanded to 5C’s:
– Collaboration – to overcome the competition between business units and the “not invented here” syndrome. Anytime a black belt project is successful, emphasis should be on rapid replication and deployment of that solution throughout the rest of the organization.
– Courage – willingness to follow the data, to make the hard choices, to make decisions under pressure.

Walk the Talk – What You Do Matters More

Unwavering commitment – At the outset of any significant change program, not all senior leaders will be equally committed. Many managers will privately express concern that the goals are not achievable. Despite any objections or obstacles, the CEO must be unwavering in his/her commitment during the critical first year.

Not everyone will conform – In any large organization undergoing a major change, the reality is that not everyone will accept and commit to the approach. Though an unpleasant reality, it is not uncommon for the CEO to fire 1-2 senior leaders who do not get “on board” in a reasonable period of time.

Beyond Commitment… Engagement is Required – Commitment from senior leaders is enough to launch an organization-wide organization change effort, but it is not enough to sustain it. Senior leaders must become engaged, i.e., knowledgeable participants who are able to answer questions and are actively involved in the process at appropriate points. It is not enough for senior leaders to review reports, “talk the talk” and act as a cheerleader. In time, the organization will see through commitment that lacks true engagement by its senior leaders.

Different Meetings, Different Questions – In most organizations, senior managers spend the majority of their meeting and review time in discussions of financial and budgetary issues. In a Six Sigma organization, in which projects are selected explicitly to drive the strategic and financial performance of the firm, the bulk of senior leadership review meetings are focused on the Black Belt projects.

Just Do It – Monitor Progress, Manage Accountability
In some ways, Six Sigma is nothing new. It relies upon statistical tools and problem solving methods that have been used for decades. What is somewhat new is the adoption of disciplined, structured processes for regular, fact-based reviews at multiple levels to ensure results are achieved.

Regardless of the type of review meeting, a key issue is ensuring these meetings are effective.

Make It Stick
Success breeds contentment – Over time, the success of a Six Sigma program can also threaten commitment. As Six Sigma produces significant results, and the organization experiences increasing profitability, it is easy to lose sight of the value of Six Sigma, and de-emphasize the attention and focus it receives.

The senior leaders must periodically reinvigorate the effort through their own behaviors and the ongoing communication program.

Change Management Methods– Because Six Sigma is implemented one project at a time, Black Belts, Champions, and Process Owners are expected to work the cultural/change issues necessary to ensure each project is successful within a particular unit.

Change methods typically utilize education, communication and recognition to ensure employees understand the benefit, accept the change (give it a chance), and engage, i.e., proactively work with six sigma. A variety of standard and unique change management tools and methods can be used.

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For the full articles in the 2-part series, go to http://www.eppic.biz/ –then the Resource tab- then the Newsletters tab, and then select and download both newsletter PDF issues: