Would you spend millions of dollars for a return of more than a billion? Sure you would, but that’s just a fantasy, right? It wasn’t just a pipedream for GE’s CEO Jack Welch, who expected to reap a hefty return for every dollar his company spent on Six Sigma. Needless to say, he did. In 1997, GE invested $380 million in Six Sigma-mostly for training-and received about $700 million in documented benefits from increased productivity and decreased waste. It’s no wonder Six Sigma devotees at GE and elsewhere speak of the initiative in terms bordering on miraculous.
Unfortunately, not all stories are as rosy as GE’s. Many companies that adopted Six Sigma failed to sustain results, and therefore the program was either put on the back burner or eliminated completely. They didn’t realize, or couldn’t accept, that the program takes years of dedicated work to implement successfully. To succeed with the initiative, organizations must look at their business processes in an entirely new way. They must understand that Six Sigma brings about sustained, long-term change as opposed to a quick fix. Any company that applies it as a Band-Aid will reap little or no benefit. The changes must be fundamental to the business companywide and persistently pursued.
During the past two decades, Six Sigma has been widely used as a management tool to drive quality and process improvement. Championed by companies such as Motorola and GE, the Six Sigma methodology has gained worldwide corporate acceptance in helping companies strive for zero defects. By providing the tools and skills to systematically streamline business processes, Six Sigma has proven itself as a comprehensive approach to improving leadership decision making and corporate performance. Breakthrough Six Sigma results often contribute to an organization’s increased profitability by providing a clear view into its operating metrics, which leads to informed actions and a reduction in the cost of quality. A Six Sigma program imposes discipline and encourages positive cultural change for organizations. In order to implement and sustain the program, though, a company must dedicate resources for infrastructure and change management at all levels.
Companies that have successfully implemented Six Sigma agree that the most critical success factor is acquiring and maintaining top management’s support. The executive team must be sold on the initiative’s benefits, structure, processes and overall goals. Unless an organization can embrace Six Sigma fully, which means rallying top management’s support and providing the infrastructure needed to sustain results while committing to a possibly radical shift in its business processes, Six Sigma can easily fail. Other factors that have contributed to the program’s failure include:
To drive Six Sigma success in any organization, regardless of its size, leaders must ensure a well-managed and sustainable program. Six Sigma affects all aspects of how a company does business; it doesn’t confine itself to improvements in one or two areas. The program breaches organizational boundaries and involves customers, partners and suppliers. Knowledge-sharing and replicating Six Sigma projects and results are essential.
But how can you breach organizational boundaries and engage your supply chain? Many believe that the hard and soft costs of implementing Six Sigma hinder employees, customers, suppliers and partners from embracing the initiative. However, the Internet’s fluidity and instant access, along with advances in IT infrastructure, can help all parties in their resolve to adopt Six Sigma. For example, e-learning tools and just-in-time resource systems allow companies to disseminate Six Sigma training content to an entire organization and its suppliers in a very cost-effective manner. Well-planned and executed e-learning solutions also drive change dynamics faster and farther into an organization’s fabric.
Large organizations often have thousands of Six Sigma projects underway at any given time. A Six Sigma executive might not know how many there are, or how each aligns with corporate goals, let alone their financial effects and other results. Proper data collection and management provide the cornerstones of any Six Sigma program. Horror stories abound of expensive disasters caused by companies amalgamating disparate computer platforms and databases or using rudimentary tools to track data and report Six Sigma progress and results.
Implementing an end-to-end Six Sigma program management system-which includes knowledge management, projects and financial tracking, resource management and reporting systems-will support and sustain a Six Sigma program. The proper software solution will enable you to manage projects, customers, resources, processes and budgets. Specifically, Six Sigma software:
The Six Sigma methodology relies on projects, programs, resources, processes and project management to drive continuous improvement. It quantifies all feedback and allows organizations to focus on activities that must change in order to achieve desired results. With the proper IT infrastructure and flexible Six Sigma program management software, accuracy and control can be achieved, enabling your company to execute the program smoothly. Data sources will be reliable, results can be monitored and validated in real time and success shared throughout the organization.
For any initiative to succeed, however, those involved must be committed to doing things differently. This requires change management at all levels as well as companywide commitment. Six Sigma training, control, standard methodologies, reports, best practices and attention to detail are all features of a well-managed Six Sigma program in a 100 percent involved organization. To make this happen, Six Sigma projects must not only be managed correctly using accurate, real-time data, their progress and results must be visible-and comprehensible-to executives, managers and participants involved in decision making.
Thus, as you look ahead at budget allocations for 2004, consider the software needs of your Six Sigma program. Make sure the application you choose has the means of bringing you the improvement results you envision.