Now that so many organizations
have climbed aboard the Six Sigma bandwagon, it’s
only natural to wonder what’s next. The initiative
remains the single best methodology available to close performance
gaps, but when companies misappropriate or misdirect Six
Sigma applications, they get short-term results with long-term
baggage and can rapidly run into the wall of diminishing
Yes, Six Sigma improves performance, but its long-term
results seem to beg the question of what should come next.
Many who have deployed and implemented Six Sigma say it’s
brilliant at solving chronic, complex and cross-functional
problems, but returns on investments diminish after its
initial application in target-rich environments. This article
takes a closer look at the problem and its practical solution.
In a business environment, change of any type or scale
requires more energy up front to dislodge current processes
and habits. When a company launches a Six Sigma initiative,
the organization initially expends a great amount of energy
in getting the initiative off the ground. If properly launched,
it begins to show dramatic, quantifiable results in a very
Within two years, however, as the immediate imperatives
that prompted initial Six Sigma implementation dwindle,
returns from the initiative begin to diminish for several
Some high-ROI projects are completed; others with similar
payback on investment aren’t identified and placed
into the pipeline.
Champions are promoted out of full-time Six Sigma roles
into leadership positions that reduce their time commitment
to coaching and mentoring Black Belts.
Experienced Black Belts transition into leadership and functional
jobs as big-payoff project opportunities disappear and new
people become Black Belts.
Initial training by consultants is phased out, and the task
of training new Black Belts falls on internal master Black
Belts who have other responsibilities.
The honeymoon phase draws to an end, and management is unsure
how to reverse the downturn in Six Sigma returns.
Most companies enjoy such great returns on their initial
Six Sigma investments that they become disillusioned when
the rate of return drops to a lower--albeit significant--level
for a sustained period. The prime opportunities have been
identified and acted upon, and companies must either allow
Six Sigma to run its natural course, with returns diminishing
at a steady pace over time, or re-energize and reposition
The life cycles of two deployments are illustrated below.
The first depicts the aforementioned phenomenon with its
relationship between investment and return during a five-year
period. A high degree of change force is applied in the
beginning and returns mount quickly, but they begin to drop
off at a fairly steep rate as the circumstances listed earlier
take their toll.
The second graph shows how a Six Sigma investment is renewed
and energized at certain points during its life cycle. Each
investment drives superior returns by taking advantage of
the existing infrastructure and cumulative knowledge base.
Diminishing returns from individual efforts signal the company
to redirect its business priorities, although it continues
to use Six Sigma to achieve them. This restores the initiative
and enables it to generate greater returns than it would
have otherwise. The diagram depicts concentrated intervention
with shaded boxes.
Thus, the answer to the question, “What’s
beyond Six Sigma?” isn’t a new set of tools
but rather a holistic management system that redirects the
most powerful improvement methodology ever. To conclude
that diminishing returns are caused by Six Sigma’s
ineffectiveness is to assume erroneously that no other factors
critical to business success exist, and this simply isn’t
true. Diminishing returns don’t occur because the
tool is bad or worn out. They occur because companies struggle
to refocus Six Sigma once the easy harvest has been reaped.
When a company commits time and resources to a disciplined
methodology such as Six Sigma, it must also develop a methodology
to provide context, impetus and direction for change on
an ongoing basis. In other words, organizations that get
the most out of Six Sigma are those that have implemented
a robust management system. With such a system in place,
Six Sigma can be focused, refocused and directed in ways
that optimize its value as a potent improvement tool.
The most effective way to maintain Six Sigma and the results
it delivers is to fold it into an overall management system
that identifies important problems as defined by critical
business criteria. By doing this, improvements can be further
enhanced with a broader set of problem-solving tools and
Such a disciplined management system has several key components:
It’s built upon business process management and leadership.
It’s constrained by desired business results.
It focuses on creating value related to specific customer
The system must be supported by the organization’s
people (i.e., human capital). These employees, in turn,
need the enterprise to support their change efforts. (See
the figure on page 26.) Ultimately, Six Sigma becomes one
part of the overall system, which also leverages other tools
and methods as needed.
interdisciplinary business system supported by a Six Sigma
program integrates other problem-solving methods and answers
the question, “What’s next?” Rather than
throwing away what’s good about Six Sigma, the system
welds it to other critical business success variables. A
robust management system optimizes Six Sigma’s function
within the larger goal of ongoing, disciplined, data-rich,
results-driven and measurable change.
Six Sigma hasn’t reached the end of its usefulness.
It simply must be understood, directed and led within an
overarching system for change. Just as a DMAIC project optimizes
the individual parts of a process, product or service, an
effective management system optimizes all aspects of the
management function in a unified manner. It delineates a
clear purpose and quantifiable output, either in a competitive
position vis-à-vis the customer, as monetary and/or
time savings, or all three.
Most companies don’t have the benefit of an up-and-running
management system that optimizes all of its people, processes,
products, services, transactions, tools and technologies.
This keeps them from implementing Six Sigma effectively
and deriving a consistent benefit from it. Instead, the
DMAIC process is turned loose on every possible process.
Expensive Black Belts are deployed to fix lower-order problems.
Six Sigma becomes the only “legitimate” mechanism
of change, rendering all other tools inferior.
In such cases, the initiative is no more than a big hammer--the
default choice for every nail in need of driving. No big-picture
management schematic connects a diverse set of human, technological
and process-related factors. Therefore, when the Six Sigma
initiative falters, it’s blamed because it alone stands
as “the way we do business.”
Instead of rushing to implement Six Sigma, a wise company
begins with more fundamental management-system building
blocks, such as process mapping, value analysis and basic
improvement activities. Only then does it develop a more
sophisticated process management system that helps it identify
and improve chronic, hidden performance problems. Further,
an introspective analysis and diagnosis of performance gaps,
relative to customer requirements and the company’s
inherent capabilities, dictates its choice of methods and
In this sense, Six Sigma isn’t for every company
every time. It’s simply a problem-solving method we
use under certain circumstances and in the face of certain
challenges. It’s not a tool to put into everyone’s
hands for carte blanche application. As with any complex
endeavor, the systemic strategies and tactics determine
how, when and in what combination the tools are employed.
Lacking a robust management system, companies too often
pull out the big jackhammer to do everything--and consequently
suffer collateral damage when Six Sigma proves to be too
much force for the occasion.
If Six Sigma needs a goal--and it does--that goal is the
customer. Sometimes your customers might not need or require
six sigma quality; four sigma could provide them the quality
they desire at a price they’re willing to pay. Anything
else to them would be overkill and a reason to take their
Although meeting the customer’s needs is the goal,
the organization defines the goal posts. That’s because
customers and businesses must interact in a way that produces
value for each. Therefore, an effective management system
has a mechanism for evaluating both customer and business
requirements, including how the different requirements assist
or constrain each other. This understanding leads directly
to business strategies and objectives that avoid the risk
of system suboptimization.
With a well-defined vision, mission and set of values,
along with an optimized set of strategies and objectives,
a company not only knows where it’s going but how
it’s going to get there. And it certainly knows how
to use, or not use, the Six Sigma tool.
The immediate result of an effective management system
is a set of measurable performance targets that cascades
down through the organizational hierarchy and derives from
defining and galvanizing the business in light of customer
At this point, the organization is in a position to decide
which methods and tools it might need in order to realize
its objectives: maybe Six Sigma, maybe lean enterprise,
maybe quality function deployment--or maybe a combination
of the three. The systematic approach to defining priorities
might not require Six Sigma--not because the initiative
is passé, but because it’s suited only for
Here’s an example based on a true customer case
study: A large service provider implemented Six Sigma to
carry out improvement projects. It gathered a group of executives
and brainstormed a list of priority activities. The first
few projects produced average savings of $200,000 each.
A second round of projects was instituted; several produced
major results, but most of them realized savings that were
less than originally anticipated.
The company found it harder and harder to justify additional
Six Sigma projects. People began to question its worth and
value as well as its significant personnel and time requirements.
The company decided to step back and regroup.
It validated the corporate mission, vision and strategies.
It analyzed market and customer information to determine
strategic gaps. It established clear, quantifiable goals
for closing these gaps. It launched a communications campaign
to educate personnel on the mission, vision and goals. It
began educating employees on the importance of understanding
customer needs, both internally and externally. And it began
a series of customer “discovery” interactions
in relation to its products, services and processes to better
understand what drove customer loyalty and buying habits.
After this, the company established various process management
systems within the organization. An all-encompassing management
system was deployed at the highest level; at the lowest
level, control systems were set up to monitor everyday priority
Black Belt activities focused on the larger gaps identified
by the management system and more complex problems that
had cross-functional or cross-business-unit effects. Performance
gaps were discovered throughout the organization, and they
were closed using basic problem-solving and focused Six
Sigma project activities.
The results were outstanding. Annualized direct bottom-line
savings of more than $50 million were recorded in rapid
order. Six Sigma worked because the company understood the
importance of first establishing a management system, then
gathering data and customer understanding, then identifying
the proper grouping of tools and methods needed to fulfill
Six Sigma can’t exist in a vacuum. Companies must
take holistic, strategic approaches to fulfill their overall
missions, and their executives must conduct themselves in
a way that befits their calling as business leaders--not
quality leaders or even Six Sigma leaders.
This means implementing a management system to plan and
execute actions and designing that system to change with
changing times. If a major problem-solving tool is needed,
perhaps Six Sigma should be implemented, but maybe not.
It all depends on what’s best for the business, and
what’s best depends on its leaders and the system
by which they live.
It’s likely that people are writing off Six Sigma
before its time. Maybe it’s not dead at all, or even
dying. Maybe it just needs to be put in its place.
Pete Robustelli is Six Sigma Qualtec’s executive
vice president and managing partner. He has more than 20
years of experience in performance improvement, business
development, planning and implementation on various assignments
both domestic and international. Letters to the editor about
this article can be e-mailed to email@example.com.