Six Sigma—The Methodology
So what’s involved with launching a Six Sigma initiative and what are the methodologies? This section presents a very high-level overview of the Six Sigma initiative. The following chapters will overlay the details that are necessary for a successful Six Sigma launch. The high-level steps in the Six Sigma methodology will include: (1) selecting the right projects; (2) roles and responsibilities of the primary players—Belts and Champions; (3) the right roadmaps and tools; and (4) the right results.
Selecting the Right Projects
Selecting the right projects sounds easy at first. The objective is to identify the set of projects that—if completed—will yield the most significant impact of growth and productivity. A good business strategy is the prerequisite to the process of selecting projects. Metrics (operational and financial) for measuring strategic progress is also a requirement. It turns out that the greatest challenge in the Six Sigma methodology is selecting and prioritizing the right projects. I will discuss this challenge in detail in Chapter 9, "Committing to Project Selection, Prioritization, and Chartering," but projects should reflect activities directly tied to either long-term business strategy (known as top-down projects) or short-term business results (known as bottom-up projects). Successful Six Sigma companies have created a disciplined process to select, prioritize, and scope projects. These companies create a vibrant dynamic between senior leadership driving for strategically important projects and everyone else driving for projects that will reduce immediate costs while improving quality or capacity.
Manufacturing companies select their Six Sigma projects around the general metrics of cost, quality, and capacity. Companies representing the service industries will likely be focused on speed and accuracy. Understanding how each metric relates to the business drives the prioritization process. If a business is capacity constrained, for example, the business will focus on improving capacity metrics.
Roles and Responsibilities of the Primary Players—Belts and Champions
Six Sigma initiatives require the selection of people representing several roles in process improvement. These people lead and support Six Sigma projects and will become the process improvement engine of the organization. The roles—Champions (Initiative, Deployment, and Project), Master Black Belts, Black Belts, and Green Belts—have distinct responsibilities in driving Six Sigma.
Two types of champions provide protective support for the Six Sigma program. The Initiative Champion, sometimes known as a sponsor, ensures that the program is institutionalized at the organizational level. He or she is accountable for measurable business results to a fairly high level in the organization. The Initiative Champions will reside at the Director or Vice-President level within the organizational structure. Many times, business leaders double as Initiative Champions.
The Project Champions work directly with the Belts to ensure that the Belts have the proper resources and organizational support to successfully complete their projects. Project Champions have the most critical role in a Six Sigma launch. They are most accountable for the successful completion of the company’s portfolio of Six Sigma projects. An executive at Cummins said, "There is no such thing as an unsuccessful Black Belt, just unsuccessful Champions."
Companies internalize (i.e., become consultant-free) their Six Sigma programs by developing Master Black Belts (MBBs). The MBBs are expert in the process improvement roadmaps and tools. They will also be proficient in driving deployment strategies. They will ultimately replace external consultants and will provide mentoring and training required for the long-term success of the Six Sigma program. MBBs create value through the mentoring process (i.e., ensuring that Black Belts and Green Belts are successful) and secondarily through training new Belts in process-improvement skills.
For example, one of AlliedSignal’s first Master Black Belts, Bill Hill, mentored 12 Black Belts who achieved some $30 million total for their first 12 projects. Clearly, Bill was a success in ensuring that each project was completed as quickly as possible. MBBs also work closely with the corporate leadership in project selection and Six Sigma deployment. The MBB is the Champion of the technical side of Six Sigma. They are experts in all the tools included in the number of Six Sigma roadmaps that are available.
Black Belts (BBs) drive strategic (i.e., big and important) projects; companies consider Black Belts as strategic resources. They receive extensive training in the roadmap and tools discussed in later chapters and demonstrate clear expertise in solving complex chronic problems. Our successful clients allow their Black Belts to work full-time on their projects. The standard procedure within a Six Sigma deployment expects Black Belts, after they learn to use one of the several process improvement roadmaps, to drive two or three project teams simultaneously.
Green Belts (GBs) drive shorter-term tactical projects. Green Belts are widespread throughout the company, and use one of the process improvement roadmaps to solve problems within their area of the company. Green Belts are generally part-time on projects and carry out their usual responsibilities. The training of Green Belts is 50% or less of the training of a Black Belt, and they can be trained by Black Belts or Master Black Belts. Therefore, the Green Belt training program can be widespread and delivered locally and cost effectively. Green Belts always attend training with an important project.
The Right Roadmap and Tools
Most companies do a good job of identifying important problems, identifying a team leader, and pulling the right team together. The teams, however, usually hit a wall when actually trying to solve a problem. Companies generally do not have a recognized, standardized, and systematic way of solving chronic problems. Companies now move away from relying on the top 10% (high-potential) employees to solve big problems and turn to the top 40% to solve problems. Six Sigma provides this inherent power.
Having common roadmaps and tool sets provides the problem-solving backbone for the company that yields a common language and set of expectations. For large, complex corporations such as Motorola, Honeywell, and GE, this common language ties the corporation together and also provides a way to easily assimilate new acquisitions.
The Right Results
The final evaluation of the success of any Six Sigma program is the verification of quantifiable business results, usually measured in pretax income per annum. My favorite metric is dollars per trained Belt. Larger companies train hundreds of Black Belts and Green Belts, who are completing projects all around the company. In the process, companies invest significant resources and training to support their Six Sigma efforts. Companies successfully implementing Six Sigma expect a return-on-investment (ROI) of 30x to 100x over a two-year period.
Organizations will normally implement a centralized project tracking system to determine the effectiveness of the Six Sigma program. By systematically tracking project results, the program is constantly validated and improved. If done correctly, the financial analysts of the organization will be able to convert project results to earnings per share.