First Article
http://www.businessweek.com/magazine/content/07_24/b4038409.htm?chan=search
Home Depot Response:
Lack of employee involvement
If employees weren't involved in the process improvement process, they missed the point. One of the core tenants of Six Sigma is a cultural shift to empower employees to improve the company. Companies that fail to embrace the cultural shift to empower workers will fail as they did with TQM and other improvement processes. American Auto manufacturers missed the boat when Deming and Juran were preaching this message. It is part of the reason our Auto manufacturers are still lagging behind the Japanese. Unless management is willing to empower employees and garner their support and enthusiasm, it has failed before it began.
Begin and End with the customer
Second, each six sigma project is supposed to begin and end with the voice of the customer. The process starts by defining the things that are value critical for your customer. Moving vacuum cleaners may have been great for your bottom line, but it does nothing to improve your customer’s value unless they really needed a vacuum cleaner. Determine your value chain and then improve your process to attack the things that are most critical to your value to the customer first. This is supposed to be based on how you stack up against your competition as well as correcting any defect issues that you have and any waste issues that you have.
Moving Vacuum cleaners to the front is not a customer focused initiative it is a short term profit focused decision. It is important not to confuse the two.
Final comment about article as it relates to innovation
Six Sigma is a methodology and a tool box. The methodology is supposed to help you be more creative applying concepts like brainstorming and Design Of Experiment as a group to solve the key customer problems. There is nothing in the methodology or the toolset that hinders innovation. So, the things hindering innovation are most likely in its application, or due to its need for data.
Analysis and collecting data costs time and money. Using K2, you can have the process gather the data or request information periodically. K2 can run many of the analysis functions on the data and help to the correlations automatically. Finding the key improvement opportunities quickly and analyzing it automatically will have a tremendous impact on a company's ability to improve the process, reduce costs and increase customer satisfaction.
Our approach allows people to relate each improvement opportunity to the Business Drivers that relate to profitability and customer satisfaction. This allows an organization to see at a glance the projected impact of the improvements for an organization.
It is unwise to run forward making changes without data. Six Sigma allows people to make informed decisions based on known data. Sometimes hunches are enough and quick improvement opportunities can be performed based on the hunch. It is important that the system is flexible enough to allow for these quick solutions. At the Lean Six Sigma for Armed Services conferences several people spoke about 1 day or 4 hour Lean projects. People had an idea and quickly tested it. Then, the validated it using Six Sigma tools. B/c they used Six Sigma they were not only able to make the improvement. They were able to statistically validate the improvement, document the results and share it with others facing the same problem in the organization.
You will find the Six Sigma is an improvement process. The process itself is usually not the problem. The implementation of the process, as we have seen time and time again at K2, is usually the issue. That is why we have been so successful. We help people effectively implement complex problems.
Second Article
http://www.businessweek.com/innovate/content/feb2007/id20070227_766365_page_2.htm
Innovation Equals Change
A corporate culture dominated by Six Sigma management theory will be primarily inclined toward inwardly focused, continuous improvement types of innovation activity—process, customer service, systems, operations, and so on. The objective is small, incremental innovations that add up.
A culture that fosters disruptive innovation is going to be more entrepreneurial, more outwardly focused on new markets, technologies, and business models. The objective is to find big new growth platforms that add significant chunks of revenue and profit.
The obvious conclusion for many companies is, "We need both!"
This paragraph forgets about 3 key concepts in Six Sigma:
1. Voice of the customer starts and ends the process. The entire process was created to focus improvements to affect change that bring value to your customers. What is inwardly focused about that?
2. Process Capability – Six Sigma first determines if the current process is capable of consistently meeting the requirements. If it is not, then it encourages brainstorming to creatively define potential solutions.
3. Design of Experiment – once the potential solutions are defined, experiments are created to pilot and test the hypothesis in a controlled way to validate the innovative idea.
If you are using Six Sigma correctly, then you will see points in the process where the process is not capable of meeting the specification or customer need consistently. Six Sigma encourages creativity in the Design of Experiment function. A group of people are tasked with solving the problem, thinking outside of the box, completely changing the problem. The group brainstorms potential solutions and tests the possibilities and tries again until they come up with a solution that works. And, when they reach this solution, they have the analytical data to back up the change before rolling it out throughout the process and/or organization. I am not sure how this hinders creativity.
The problem here is that none of us wants to be put into a box. And, we start to feel boxed in whenever policies are put in place. This, again, is a cultural shift that needs to be encouraged from the ground up. People need to be encouraged to think about how their product can be better, how their job can be better, how the environment can be better. The problem in our culture is in many cases management doesn’t encourage and enable the end users. Hey, isn’t that a fundamental theme of K2[BlackPearl]?
Third Article
http://www.businessweek.com/magazine/content/07_27/b4041068.htm?chan=search
Value Chain
A key concept of Six Sigma is focusing on the value chain. The Pareto analysis is designed to keep you focused on the things that are most valuable to you or your customer. You improve them first. Then as you get into the more granular improvements, you can decide if they are even worth doing. If there is no value in achieving 6 sigma, then you can stop at 4. I pulled 2 posts associated with the article.
O.K., maybe I am missing something here. So 3M is not as "innovative" in the eyes of some, but I missed the part of the article that shows how this caused 3M to lose profit. From 2000 to 2004, its shares have gone up, and from 2004 to present they are nearly level. The purpose of business is profit. I would like to see more evidence that 3M didn't just eliminate fruitless creativity.
Which company would you rather own: the world's most innovative company with a lackluster stock price and profit growth, or the seventh most innovative company with 22%-per-year profit growth?
The point is to improve the processes to affect the bottom line. If organizations are doing that then they will have the time and other resources required to be innovative and the things the create will be more profitable b/c they were created with efficiency built in.
Closing
In closing one of the numbers thrown around at the conference last week is that the average Six Sigma project done by a black belt takes less than 3 months and returns on average $175,000. $700,000/yr/black belt is a pretty good return J
Rob Joy | Technical Specialist | Heartland
robj@k2.net www.k2.net