Editor’s note:This short story is part of a three-volume series—Integrated Enterprise Excellence: Going Beyond Lean Six Sigma and the Balanced Scorecard, by Forrest Breyfogle. Within the context of this fictional story the author discusses the attributes of an integrated training program that he has developed. This story is informational only and is not intended as an endorsement of this product.

Hank arrived early at the golf course and was hitting some balls to loosen up. The sky was crystal blue, the wind still—perfect weather for 18 holes of golf, but Hank couldn’t get his mind off work.

As vice president of operations at Hi-Tech Computers, his background in electrical engineering and an MBA had helped make him a fast tracker. Hi-Tech was an aggressive, successful computer-component manufacturer with plants in the southwest United States and Mexico, but had been facing new competition and pressures from its biggest customers to comply with growing regulations, improve delivery times, be more flexible, and offer lower prices.

Increasing pressure from Hi-Tech’s customers, shareholders, and regulators had begun to cut into his golf—recently, more “snowmen,” those nasty 8’s, were showing up on his scorecard than he cared to admit.

Hank was still engrossed in his thoughts when he saw his old college buddies Jorge, Wayne, and Zack walking toward the practice green. Jorge was 47 and a senior vice president at Harris Hospital. Wayne was 45, and a vice president of research and development at Wonder-Chem. Zack was the youngest of the group at 44. Zack, rolling in a long putt, slid into a discussion of his company’s latest investment model that would produce a high rate of return with minimized risk. Jorge was hitting a few of his magic chip shots from the fringe, while Wayne stretched and warmed up his smooth, rhythmic swing with a 7 iron.

Approaching the first tee they agreed to their usual pairings—Hank and Jorge against Wayne and Zack in a game of two-man best ball. The best individual score on each team determined who won the hole. The team that won the most holes could win the front nine, the back nine, and the total. Loss of two out of the three meant you picked up the tab for dinner.

Hank refocused on golf. With his obligatory snowman out of the way, he actually played pretty well, recovering to shoot 85. Jorge struggled on the long holes, but teamed well when Hank faltered to finish with 89. Wayne was solid as ever with his 76 in this round, just a few missed putts from par. Zack used his wonderful putting stroke to stave off disaster and finished with 96. Hank and Jorge lost the front nine by one hole, but recovered to win the back nine by two and win the overall match. Later that evening, as Wayne and Zack split the dinner tab, Hank relived Jorge’s beautiful 20-foot putt on the 18th green, which sealed their victory.

At their next outing, Hank began to discuss issues he was experiencing with lean. He spoke of the results of various teams. One team conducted 5S activities with no visible results. Another team conducted kaizen events, but Hank couldn’t confirm how the claimed results would change his business metrics.

Jorge used his 3 iron off the tee. The ball went 175 yards down the middle, just short of a creek, in good position for his second shot. Zack looked incredulous, “Where did you come up with all this?”

“Our IEE training inspired it,” said Jorge.

“What’s IEE?” Wayne interrupted.

“IEE’s short for integrated enterprise excellence,” Jorge said. “Wayne, you’re implementing lean Six Sigma now, right?”

“Yep,” Wayne responded. “Hank, you’re implementing lean, right?”

“Sure are,” Hank responded. “Zack, you’re building the balanced scorecard system from your strategies, right?”

“Yes, we are,” Zack replied.

Jorge continued, "I found a couple books that had a step-by-step process for IEE implementation. Like Wayne, at first I thought we could use these books to implement IEE on our own. After further investigation, I realized we needed expert advice to get started. The company we went with didn’t simply focus on doing projects. They focused on how to create an overall business system of measurements and improvements that leads to everyone doing the right thing right at the right time. And they had the detailed roadmaps to accomplish it.”

Later, as they waited on the 17th tee, Jorge finished his story. “When I decided to go with IEE, I learned that success is dependent upon organizational understanding and buy-in at all levels. Our deployment consultant provided a system to accomplish this in a one-week workout. The first day we had a hands-on workshop that described the methodology and how this system would resolve many organizational pains that routinely occur.

“The session described an enterprise process—define-measure-analyze-improve-control system, or E-DMAIC that serves as an infrastructure for defining your organization’s value chain with a unique measurement-tracking and -reporting system. The IEE system of measurements has many advantages over a red-yellow-green scorecard approach. There is a structured enterprise analyze phase that leads to the structured building of strategies and projects that are in direct alignment with the goals for our business objectives.

“On the second through the fourth day of the week, the consultant worked directly with our technical team roughing out the company’s overall E-DMAIC structure. On the fifth day, the executive team was brought back in for a 2-hour presentation. In this presentation, the executive team saw the first build of our tailored system. They were impressed. In addition to describing this new system, the presentation highlighted how many of our current practices were encouraging fire fighting and leading to wrong activities.

“Defining and scoping-out projects are essential. In a traditional lean Six Sigma deployment, management might simply decide what major functions were most critical, what specific processes within the functions were important, and how to track key process output variables—KPOVs—of the process. The managers could be right or they might be wrong. Some organizations have claimed 100 million dollars in savings, but no one can find the money. The IEE system has an approach where value chain metric improvement needs pull for project creation.

“Like everyone else, we’re having some buy-in problems. But this system is transitioning our organization from fire fighting activities to fire-preventive actions. This is uncomfortable for some people since their rise to the organization’s top was because they were good firefighters. Being more data-driven will be healthy for us.”

“I understand that when companies push or hunt for projects to create it is not uncommon for this to occur. IEE not only addresses these issues, it is much more than a project-driven system like lean Six Sigma. IEE is an overall business system for both organizational measurements and improvements,” Jorge continued.

Unlike his friends, Jorge was making significant progess with his IEE business strategy. Monthly status meetings now have metric report-outs that mean something. He found in the past they had been wasting much time fighting phantom issues. Even better, these projects were well aligned with corporate financial goals, making the project benefits even more visible. This excited and motivated other teams to work even harder on their projects.

As they waited to tee off for the next hole, Hank thought about IEE. Hank remembered what Jorge had told him at the last golf outing—IEE isn’t a program. It’s a statistically-based business system and improvement methodology, which improves how operations are measured and improved. Jorge was emphatic about IEE’s requirements in the way people should do their jobs, especially at the executive level.

“Management’s task is to create the infrastructure, remove barriers, and make improvements happen,” Jorge continued. “When you asked the computer-components group to cut costs, you expected the individual managers to reduce their expenditures, reduce head count, cut discretionary spending, and reduce inventory. Standard stuff, right? With this type of thinking you were set up to fail sooner or later. People worked independently within their own responsibilities trying to solve the problem. Nobody was looking at the bigger picture!

”In IEE, the value chain describes what your company does. Metrics then describe how well your organization executes these functions in a time-series fashion, where common-cause variability is separated from special-cause variability. Note that these metrics are not really dependent on strategies.”

“What about the connection between Six Sigma and lean?” Hank asked.

“Actually, Hank, I’ve heard different answers to this question. Most companies that start with lean believe you do lean first, which leads to the application of Six Sigma tools to reduce defects. Six Sigma proponents often say it works the other way round. They tend to believe that after Six Sigma is implemented, you can address work-flow issues using lean methodologies,” Jorge continued.

“IEE has a different spin on things. The IEE system provides a high-level scorecard, or dashboard, for business financial and operational metrics. It has no calendar boundaries such as quarter or year, nor is it tied to management continuity.

“Corporate financial measures are tracked as ‘satellite-level’ metrics. Operational and project measures are tracked as ‘30,000-foot-level’ metrics. Using the satellite-level metric strategy, businesses track measures such as return on investment and gross revenue on a monthly basis. As part of this strategy, the 30,000-foot-level metrics track project or operational metrics such as defective rates, work in progress, or lead times on a daily basis and are designed to get you out of fire-fighting mode.

“The purpose of the 30,000-foot-level chart is to view a process response from a high-level (airplane view) to determine whether a process is predictable and has common-cause variability. If output from common cause variability isn’t satisfactory, then an improvement project would be pulled for creation. You need to systematically improve the overall process, rather than chasing daily problems. The tools you select to fix a process depend on your situation. If the problem were from waste—muda—you would probably use lean tools. Other situations require Six Sigma tools, and some require both.”

Hank responded, “Wow, when you think about it that could be big bucks! Sounds like we could use IEE also to meet our 9001 requirements as well. With the 2000 version, we not only have to document our processes, we have to show we’re improving them.”

“The Enron situation and other similar management-style problems would never have occurred if IEE had been in place. This system would have had 30,000-foot-level metrics with a value chain that documented processes, and a system which faced waste and business improvement issues head-on,” Jorge said.

Hank continued, “This isn’t the case in an IEE deployment since it’s a business management system that focuses on building upon your value chain with a no-nonsense measurement system that addresses not only ‘what’, but ‘how’ you report measurements. In addition, there’s a structured approach with detailed roadmaps that guide you through an enterprise business system and improvement project execution. Improvement projects will be supported by their process owner and management since they understand that completion is necessary for them to achieve their goals. Projects are orchestrated across functions.

“Our IEE training for management and employees is going to change how they do their jobs. For the first time, I feel like we have complete control over our business and can avoid major surprises. Control is probably too strong a word, but we understand where our problems are and have a roadmap to eliminate them. This applies to all areas of the business from marketing to manufacturing to customer needs, wants, and services.

“There are people who do great things with their organizations,” Hank continued. “The problem is that the gains can’t be maintained when the person leaves. Results depend on the person. That’s why I used to reorganize so often. I was looking for those special people. With IEE, getting results becomes ingrained in the system and not in the person. The key is to find executives and managers who can execute the IEE business strategy.”

“Let me tell you about what happened to us on one of our projects,” Hank went on. “We used gauge repeatability and reproducibility to quantify consistency of the measurement system in one of our projects. It’s an area we often overlook, and we were extremely surprised by the results. Almost 40 percent of our total process variability was due to measurement variation. With the existing gauge, we were often accepting bad parts and rejecting good parts. When we included the cost of rework, lost production, and replacing customer shipments, we calculated that this gauge alone was costing us five million dollars a year. We never would have found this without a structured IEE methodology. We assumed that as long as the gauge was calibrated everything was okay. We never realized that calibration of the measurement system was only one part of the equation.”

The golf match ended up even, but the entire group felt like winners. Everyone had played well—Wayne shot par 72, Hank a 79, Jorge 80, and Zack broke through with an 89. As they drove to their cars to deposit their clubs, Jorge thought that this wasn’t just a random combination of unlikely occurrences. This, more likely, was an example of real systemic improvement in everyone’s game.

Jorge said, “We now have a value-chain system and monthly-metric reporting that are leading to the right activities being done right at the right time. Our firefighting has definitely decreased. Our CEO isn’t only planning to carry the financial savings numbers forward to the board of directors, but also promote our overall IEE system and how it has improved the way we do business. She plans to put something in our annual report about the system and the benefits we’ve achieved for our customers and our shareholders.”

"I agree completely with Jorge,” Hank said. I’ve learned a lesson about selling IEE too. Talk the language your CEO likes to hear: Money and what relieves their pain.”

Jorge said, “You know, I just realized we’re enjoying our game much more. We’ve been under a lot less stress.” Isn’t it great to love your job, Jorge thought to himself.

When the group met at Jorge’s SUV in the parking lot to depart, everyone looked at Jorge as Hank asked, “So when is our next golf date?”

Wayne and Zack chimed in: “Yes, and when is our next lesson, Professor Jorge?”