Tough times are no reason not to stay the course with lean Six Sigma
By Terence T. Burton
We are emerging from the largest recession and slowest recovery since the Great Depression. Unfortunately, the reactionary and inconsistent leadership responses to the meltdown have become the new norm in organizations, taking culture backward and destroying the ability to improve anything. Organizations have placed a “freeze” on improvement when they need it the most. Many have downsized their improvement resources.
However, hidden waste continues to pile up and hamper true strategic improvement. The majority of organizations find themselves in a derailed state with their lean Six Sigma initiatives and strategic and sustainable improvement in general. They need a more accelerated and adaptive approach to improvement to get back on track in the new economy.
Disturbing leadership responses to the 2008 economic collapse are reflected in a few actual comments below:
- “There’s no money in the budget for improvement until 2011-2012.”
- “The time is not quite right for improvement.”
- “Improvement is not in my goals and objectives.”
- “We finished our continuous improvement program years ago.”
- “We eliminated our Six Sigma program. It did not work for us; we’re different.”
- “We don’t have the time and resources to improve and do our regular jobs.”
- “If I had more time, I would have found a better way.”
Today, many organizations have traded in their true commitment to lean Six Sigma for dysfunctional improvement behaviors that yield illusive short-term results. Some have eliminated their internal lean Sx Sigma departments or general improvement resources, postponing formal improvement initiatives for better financial statements. While the bottom line might look solid, any bonuses accrued reward executives for doing the wrong things.
Meanwhile, waste festers. Worse yet, organizations are creating another birth-death cycle of improvement. There is a long-term pattern of organizations failing to acknowledge strategic improvement as a critical enabler of competitive success.
There are two facts about waste in organizations. First, waste is dynamic and everywhere, and the growth rate of waste is proportional to executive behaviors and strategic choices about improvement. As the world accelerates, so too must the “process of improvement.” Second, when waste is left unattended, it spreads like a cancer through organizations. When people perceive that improvement is not a priority and follow suit with reactionary behaviors, the organization fails to recognize the most obvious fundamental: The only way to get better is to improve the current state with solid root cause problem solving.
When one thinks about it, does it make sense to stop selling, reduce customer service, stop processing orders and other IT transactions, hold off on new product development, stop invoicing and collections, delay sourcing materials to build product, stop analyzing defects, slow down emergency room or operating room activities, or stop answering the telephones in customer service? So why would an organization stop improving? Improvement is the business religion and solid fundamental platform that makes everything else better. If lean Six Sigma is not successful at producing sustainable results in your organization, it is not the fault of lean Six Sigma.
The convenient conclusion: It’s leadership’s fault again
Before blaming leadership again and explaining away what went wrong (as we have for the past three decades with other improvement initiatives), engage in a bit of historical “5 Why’s” root cause thinking. Several major factors always seem to drive away formal improvement initiatives such as lean Six Sigma:
New economy, obsolete improvement models. The economic meltdown and recovery have introduced many new global challenges that require more immediate action. The present approaches to lean Six Sigma and strategic improvement in general are too static, too overhead-intensive, and ineffective at achieving quicker results. In a recent survey, more than 80 percent of individuals certified as black belts no longer are involved in formal improvement initiatives. Training the masses and belts is the wrong approach in the new economy. Just as the economy has changed, organizations have a desperate need to evolve their ability and capacity to improve with better approaches. As the world changes, the process and focus of improvement must change along with it.
Be careful; you get what you measure. Short-term financial measurements such as stock price, EPS, P&L performance and executive bonuses have driven destructive short-term behaviors such as layoffs and across-the-board freezes on hiring and discretionary spending. Many organizations have eliminated their internal lean Six Sigma departments or general improvement resources, postponing formal improvement initiatives in the interest of improving financial statements. In terms of strategic improvement, performance and reward systems drive organizations into a game of liar’s poker, which rewards trickery and deceit, with their corporate executive groups. A lot of selective reporting on how things are getting better may help financial statements look healthier. But the hidden waste piles up until the next regime takes charge, sweeping that waste under the rug of restructuring costs. Stakeholders eventually pay the price for these very real inefficiencies.
Many improvement initiatives become non-value-added. The traditional top-down, mandated, training-heavy/results-light approach to lean Six Sigma deployments have run their course. Today, too many entities are loaded with belts, symbolic storyboards, boilerplate train-the-masses education, beautification exercises and other perceived improvement efforts with little to no ongoing results. In some situations, executives cut overhead by eliminating many of their non-value-adding lean and Six Sigma resources.
We did lean and Six Sigma. What’s next? Strategic improvements have been viewed as tools and buzzwords, not legitimate core competencies to be developed and sustained. It takes unwavering leadership, permanent commitment and formal infrastructure to develop this core competency. The best sustainable improvement organizations view improvement as every bit as important as sales and marketing, financial management, research and development, engineering, and any other enterprise activity. They view lean Six Sigma and other initiatives as enablers of improvement, not the end-all and cure-all program du jour. They also have a highly committed organization, formal infrastructure, performance and feedback, and sustainability processes in place. There always will be changes in executives and leadership direction, conflicting priorities, political motivations, and a focus on short-term performance. Formal infrastructure keeps strategic improvement in the forefront.
The illusive constancy of purpose. In the 1980s this was Deming’s first point, and organizations still look for it today. Like it or not, history reveals the ugly facts about how strategic improvement is accepted and embraced by organizations. When things are good, improvement is the first casualty because it is perceived to be no longer necessary. When things are bad, improvement is the first casualty because people do not have the time and resources to improve and do their regular firefighting jobs. Within two to three years, the need for improvement is rediscovered via a different banner, as if the concept never existed before. Organizations are sold another box of improvement with a different ribbon wrapped around it and new promises, but the contents of the box remain basically the same.
Much of what exists, and always has existed, in the improvement boxes are the basic disciplines and solid fundamentals of industrial engineering — exported to the Far East, implemented with great success, and imported back to the United States. Most gurus packaged improvement as the latest single-point tools, acronyms and buzzwords, with no overarching and sustaining constancy of purpose. For decades, continuous improvement has been underestimated and oversimplified, using “throw it at the wall and see what sticks” approaches and “hurry up and finish improvement, anyone can do this” mindsets.
Unfortunately, there is not enough time here to dig deeper into root causes of executive behaviors and infrastructure weaknesses. In addition, one should not view these root causes as criticisms but as valuable facts for boosting the discipline and results of strategic business improvement. Most of these behaviors are assignable to specific root causes. Not surprisingly, they are related more to the leadership, strategy and infrastructure elements of improvement than to specific lean Six Sigma tools. This formal infrastructure and core competency of sustainable improvement has been and still is missing in most organizations. This is why the continuous keeps falling out of continuous improvement, regardless of what we call our improvement programs.
Improving how we improve
The next generation of improvement can be called Improvement Excellence: The mastery of developing and implementing successful strategic and continuous business improvement initiatives, transforming culture and enabling organizations to improve how they improve.
It sounds simple and logical to take available improvement methods, adapt the process to changing global requirements, and build a permanent and sustainable capability to improve continuously how we improve. The Improvement Excellence framework shown in Figure 1 recognizes the need to break the old cycle of eliminating improvement programs after a few years, bringing them back, discarding them again, etc. Improvement must evolve continuously to specific market, customer and enterprise needs. Strategic improvement is ingrained in organizations that proactively strive for a desired rate of improvement via cost reductions and growth, which should be the major enablers of business and financial performance.
The framework incorporates the following characteristics.
Permanent and sustainable infrastructure matters. Sustainable continuous improvement is built into organizational culture via a formal infrastructure. The elements of this formal infrastructure include strategic leadership and vision, deployment planning and execution. The infrastructure aligns evolving customer and market needs with strategy, improvement and sustainable results. It also keeps the notion of improving how we improve in the forefront despite ongoing changes in executives and leadership directions, conflicting priorities, political motivations, a focus on short-term performance, and other potential distractions. Infrastructure links and closes the loop between individual improvement success and global business success.
An adaptive and nimble process of improvement. The process of improvement is customer-centric, adaptive and more nimble. Improvement Excellence uses a method called Scalable Lean Six Sigma, a simplified but high impact alternative to the traditional top-down approach. Too often, improvement plans produce only symbolic storyboards, boilerplate education, metaphorical “belts” and the illusion of improvement with little measurable results. The focus of Scalable Lean Six Sigma is on the efficient process of improvement rather than the naive application of DMAIC or specific tools, and the scope is limited to the three to five critical issues that keep everyone up at night, not the mass, non-value-added improvement activity for activity’s sake.
Ten proven accelerators of success. Most strategic improvement initiatives oversimplify or deny what it really takes to achieve true quantifiable business results and cultural transformation. Without a doubt, the processes by which organizations have been attempting to achieve these outcomes are obsolete in the new economy. Today, improvement is all about rapid deployment and rapid results, minus complexity and overhead. Rapid deployment and rapid results are achieved through the detailed methods of the following 10 accelerators, as shown in Figure 1:
- Reinvent and reset leadership, improvement strategy and vision.
- Develop a robust deployment plan.
- Provide customized education and development.
- Communicate, communicate, communicate.
- Launch with the best in mind.
- Provide strong, extensive mentoring support.
- DMAIC the deployment process regularly.
- Accelerate individual project paths.
- Complete the C in DMAIC.
- Practice concurrent continuous deployment.
Collectively, the 10 accelerators of lean Six Sigma results are a different option to traditional deployment, but they address the true improvement challenges of the new economy. They provide an implementation infrastructure for sustainable strategic improvement. Education and talent development is a more time-phased and targeted approach that focuses on the most practical, most widely used, or immediately needed improvement methods and tools.
Certification remains important, but it is viewed as a longerterm professional development goal rather than a prerequisite to begin improvement or a “punched ticket” credential. These lean Six Sigma accelerators apply to other strategic initiatives such as outsourcing strategies, mergers and acquisitions, building a new facility in China, IT strategy and deployment, or rationalizing global supply chain processes.
Technology and strategic improvement convergence
Technology and strategic improvement are highly integrated processes in the Improvement Excellence framework. Technology is enabling the warp speed transformation of organizations into global, multilevel networks of transactional enterprises. Unlike manufacturing improvement, transactional improvement is transparent and composed of key business processes, information flows, knowledge and decisions. Further, hundreds of people manage thousands of dynamic process touch points; a continuous churn in supply and demand; dynamic country requirements and specifications; global time constraints and communications issues; and exponentially greater opportunities for waste, variation and bad decisions. Accordingly, the organization’s global IT architecture has become much more important to the success of the next levels of lean Six Sigma and strategic improvement in general.
Technology is the integrated process architecture and critical enabler of improvement in this rapidly developing environment. Accordingly, technology is a critical success factor of the next levels of lean Six Sigma and strategic improvement in general. No longer is the notion of enabling technology and process improvement separable or sequential, which is how organizations treated these needs for decades.
Many improvement camps have attempted to convince their organizations that improvement tools increase the visibility of processes and waste, and therefore reduce the need for technology. Many technology camps have viewed process improvement as either not necessary, slowing down the implementation process, or something that they will postpone. Organizations thumped their chests for the speed at which they implemented software modules, while never returning to complete the education, talent development and process improvement aspects of the software implementation. These days, technology is the integrated process architecture and critical enabler of strategic business improvement.
Executives no longer can lead successfully without this convergence. Today, successful organizations are improving their real time root-cause problem-solving capabilities via enabling technology. The combination of technology and improvement helps organizations build real time, interactive supply chains or global product development capabilities where they manage by a process called SIDAM, or senseinterpret- decide-act-monitor.
Many organizations have put into place real-time, event-driven metrics, or what we refer to as visible walk-around metrics or good-day-bad-day metrics. The objective of these easily interpreted performance dashboards is to communicate performance and potential issues in real time so that organizations can SIDAM in more of a prevention mode. Competitive success lies in this new capability to sense, respond and keep customer-supplier requirements synchronized within the dynamic and complex network of enterprise and extended enterprise transactional processes.
From recovery to discovery
The crisis-mode leadership reactions to the 2008 meltdown are a natural response to disaster, leaving executives and organizations vulnerable to bad choices. What is done is done, and that is yesterday’s rain. The silver lining to the recovery is that there are more global opportunities for improvement and competitive success than at any other time in history. The recession has raised the bar on customer and market expectations in the global economy. Accordingly, there is a desperate need for organizations to get back on the right track with strategic improvement and evolve their ability and capacity to improve. The tools of lean Six Sigma are as relevant as ever. This era is a new opportunity for organizations to build a solid and sustainable foundation for strategic improvement. It’s time to use what already is available to us effectively, inject creativity into the process of improvement, improve how we improve — and stay the course this time.
Organizations are struggling with global challenges that they never had to deal with in the past. What is next? They must learn to solve business problems at warp speed. Strategic improvement is a necessity, not an option. Organizations either will aggressively improve their businesses or fall behind at a rapid rate.
Some organizations “get it” and are well into their new journey of improving how they improve and integrating technology with a well-structured, targeted and scalable improvement process. People in these organizations are using real-time data via portable technology, accelerated root cause thinking, and instant feedback in their daily routine of thinking and working. These organizations are in an offensive and proactive mode of improvement and will leave their competition in their dust. This is the future — the recognition and cultural acceptance of accelerated, technology-driven, sustainable, strategic improvement with unlimited possibilities and unlimited competitive rewards for success.
Terence T. Burton is president and CEO of The Center for Excellence in Operations Inc. He has nearly four decades of executive high-technology industry and international management consulting experience. He has worked with more than 300 clients in the Americas and Europe. He has written six previous books and hundreds of articles on improvement and industrial engineering topics. Burton holds a bachelor’s degree in industrial engineering and a master’s degree in industrial engineering/operations research from the University of New Haven and an MBA from Boston University. His latest book, released in February, is Accelerating Lean Six Sigma Results: How to Achieve Improvement Excellence in the New Economy.