Most conventional organizations comprise departments and functions. A department head or functional head is responsible for all department deliverables. All department members should have clearly defined responsibilities for their respective tasks. Departmental tasks are expected to be performed on time and with quality. Every member of a department operates within a framework called a functional silo.
Functional silos focus on their own objectives alone and are not involved in interacting with other groups and sharing internal process information with others. Each department may also have several cross-departmental tasks that fall outside of the functional silo. Cross-departmental tasks can have delivery and quality issues. The boundary set up between functional and cross-departmental tasks brings about key challenges, including:
- Layers of bureaucracy that involve too many approvals.
- Lack of ownership in cross-departmental tasks.
- Management frustration due to lack of coordination among departments.
- Too many steps, such as checking and quality control, which are redundant for every department.
- Lack of focus on customers due to employee attention on internal tasks.
- And, opportunities for errors or corruption because of lack of ownership.
Cross-functional processes relate to a series of activities that are executed across an organization. Cross-functional processes are not organized by departments or functions, but by processes which comprise several departmental activities. In addition, cross-functional processes help clarify the end-to-end execution of a process. A cross-functional structure is a Six Sigma way of thinking how processes are structured and resources are aligned per key outputs. Therefore, a cross-functional structure facilitates better alignment to customer needs. Some of the benefits of a cross-functional process include:
- It becomes easy for top management to clarify its quality, cost, and delivery goals and deploy them to employees at every level.
- And, it facilitates close coordination among different departments in the organization.
An interrelationship digraph, also called a relations diagram or network diagram, is a tool that depicts relationships among different elements, areas, or processes through a network of boxes and arrows. It is usually used by Six Sigma teams to understand cause-and-effect relationships among different factors of a problem.
Different factors associated with a problem are entered in boxes or written on sticky notes. Factors related to one another are placed close to each other. If any factor causes or influences any other factors, then an arrow is drawn from that factor to those affected factors. At the end of the exercise, the arrows are counted. Generally, boxes with the most arrows leading to them are the major issues. However, this is not a hard-and-fast rule. Sometimes, even key issues may have only a few arrows. Therefore, no issue should be ignored. Issues that have more outgoing arrows are regarded as major causes, whereas issues that have more incoming arrows are regarded as major effects.
Interrelationship digraphs are used by organizations in different situations for varying purposes.
They are generally used for:
- Analyzing any kind of relationship, besides cause-and-effect relationships.
- Analyzing complex issues involving several interrelated issues.
- Determining areas of improvement that will have the greatest impact on the
- Analyzing logical relationships.
- Analyzing problems where causes cannot be organized as hierarchies or matrices.
- Analyzing a problem that is believed to be caused by another problem.
- And, developing a better understanding of the relations identified using tools such as affinity diagrams.
Concept of Wastes as perceived in Lean Standard Work for Manufacturing
Organizations strive to eliminate three basic categories of waste in their business processes.
Basic Waste Category are:
- Wasteful activity – Work that adds no value to a product or service. Eliminating such activities from business processes will help organizations cut cost.
- Unevenness – This denotes inconsistencies that exist in a business process. Unevenness and inconsistencies can be avoided by eliminating inventory and supplying items to the production process only when they are needed.
- Overburden – This is caused by an unreasonable or excessive strain on resources. It can be eliminated by simplifying and standardizing processes.
Among these three basic categories of wastes, Lean focuses on eliminating activities that do not add any value. These activities are further classified into seven types of wastes: transport, inventory, motion, waiting, overproduction, over processing, and defects.
What got you here, won’t take you there!
If you continue to use the current methods & processes in future, leave alone growth, you can’t even sustain your current position in market. Transformation is a continuous process and the cornerstone of transformation is to become ‘future fit’.
Business Transformation is all about change, be it manufacturing or services such as Banking & Financial Services, Telecom, Outsourcing & IT. Many times organizations know what needs to be transformed and by how much. They even know how to execute the change. Ironically, it never gets accomplished. And if it gets accomplished, the change hardly survives a year. This is a combined failure of change leadership, project management, organization’s culture, quality of solution, incentives, lack of interest, process failure, technical knowledge, competition, external conditions, regulation, etc.
We talked about the need for Lean Six Sigma project selection in detail in the earlier articles, in this one we’ll cover the criteria for selection and the in the following article, we’ll move on to talk about the tools used for selection and how to engage the stakeholders in the process.
I have found that while leaders agree on the need for project selection, their views on the criteria is quite divergent. Most of them see this as a process to sway the process in favor of their priorities and interests.
There is nothing wrong in doing so, as long as the process is not biased. Through this article, we draw consensus on the criteria and its relevance to the whole process.
The real good news is that the criteria for getting the project selection right are not too complicated.
What does project selection countdown look it? We’re going to start with the least of the top 5 criteria and find our way to the top most criteria. Here you go:
7. Probability of Success:
Not all the projects will be successful in any company. Hence, while selecting the project, most project leaders consider the contingencies which might come up and use that as a yardstick to select the project. Sponsors want their project leaders to be successful equally as projects leaders’ desire success. Well, sounds like a good approach. But doesn’t this approach make it very orthodox? Unlike other implementation projects in technology, improvement projects are bound to have ups and downs; and it is quite natural that not all projects achieve their goals. That is what continuous improvement is all about.
Thus choosing to play it safe isn’t the best criteria to select projects, though unfortunately, it is very popular criteria in use. That is why Probability of Success is the last in our countdown list! One of the organizations flips these criteria to select the project which has failed in the past or have a low probability of success as Black Belt project. That is certainly a best practice to emulate.
6. Availability of Data:
Is data readily available for the project? If not, can it be easily gathered? While most project leaders and sponsors know that rarely will all the data needed for a project is waiting around to be analyzed. But they use the availability of data criteria to select projects because the unreasonable expenditure of time, resources and effort can be avoided. Yes, data is needed for analysis. But making it a criterion reduces the scope Continuous Improvement deployment.
Improvement projects are expected to venture into unchartered territories of the process and present root cause and opportunities. Getting people to measure something that is not being reported till now, in it is a feat. Having vanilla project can hardly be a criterion for project selection. That is why the availability of data comes second last in our countdown!
5. Savings potential:
Any project implemented is implemented with an intention to gain any kind of tangible or say monetary benefits. But along with monetary benefits, there are other benefits like customer satisfaction, increased efficiency, total company involvement; increases workspace and much more. While it is absolutely apt to select projects which have savings to the organization, it is misleading to make saving potential a primal purpose of projects. I have seen many times, project leaders come up with simple ideas or improvements with a huge saving potential to the organization, but virtually no complexity involved. Such projects hardly qualify for Black Belt projects.
They best serve as Just Do It project. Giving undue importance to saving potential in project selection also sends the wrong message across the organization. That is why I not really excited about having this as a top item in the countdown. That’s why Saving Potential is only Number 5 in our countdown.
4. Apt Time:
There is always a perfect timing to initiate a project. Relevance is contextual. By apt timing, I mean both the time to commence, and the closure as per plan. An important project has to close on time. It has to be first of all, planned to close on time. It has to be scoped to close on time. That is why Apt Time is No.4 in our countdown.
3. Availability of Resources:
I don’t know if this has to do with the culture. Most organizations, if not all, end up with a laundry list of projects because everything seems to be Business or Customer priority. Even the biggest and richest of the organizations have limited resources. Either resource is depleted, busy elsewhere or simply not committed to deliver. The best person is often leading many projects, making everything he/she does venerable to failure. Project selection is about de-selection and not selected. Ruthlessly put ideas into a parking list for which right resources are not available; and if it is so important that it has to be executed now, then pull the right resource into this project rather than sharing.
While I have largely kept this point around manpower, it equally applies to money & time. I say with conviction that organizations that ensure that the leader of the Lean Six Sigma project is a dedicated resource, either full time or handling only one project even if it means he is part time on it are surely successful. This is why Availability of Resource is No.3 on our countdown!
2.Customer impact:
Ask yourself “will the results of the project bring any difference in the life of the customer? Will it improve the perception of the customers about the quality of your product or services?” Quite often this answer to this question is yes. Unfortunately, it’s motherhood in apple pie question. So insist on quantifying the impact.
If you can pin a number to the impact, then go ahead. And if you’re not able to do so, then there’s no point in wasting your time on the project. Consider Voice of the Customer in your organization as a starting point. Why don’t you start with complaints and alleviate customer pain? Thus Customer Impact is Number 2 in the countdown.
1.Business Priority:
Selection of projects is based on the need or priority of the business. Project leaders need to understand that the tail can’t wag the dog. Often, people package their ideas into a project and fuel it as an organizational priority. Scanning of the external and internal environment will give first-hand insight on what is the organizational priority, NOW? Go for it. Well, that may put you out of your comfort zone, competency or expertise, but remember that’s what the organization needs.
Without a real need, do you think any leader would offer sponsorship to your project or will it at all help anyone – NO.? That is why Business Priority is Number 1 in our countdown.
Project Selection and implementation of Lean Six Sigma is easy and at the same time should be handled delicately by keeping all the above aspects in mind otherwise it might turn into a big disaster. An effective diagnostic study is required before selecting projects and with the undivided involvement of the top management are pre-requisites for project selection.
Why should you be worried about Project selection in any Continuous Improvement (CI) Program?
While leaders strive to build a culture of continuous improvement (CI) in their organizations, it is equally important to understand that business-as-usual activities take precedence over improvement activities. CI programs commence with a big bang and a lot of enthusiasm, but time wears out even the strongest and what it leaves behind is mere CI hubbub. This is not a simple problem to solve. If you have been part of any enterprise-wide CI deployment, you will have no difficulty relating to this. This problem is complex and has several failure modes.
In this article, I’ll like to highlight a common but significant failure mode – Selection of projects. It’s needless to emphasize that projects play a big role in any CI journey, but to its disgrace, projects are also a significant contributor to the downfall of CI program.
Going overboard and having too many concurrent projects is one way to fail. Not selecting the right projects to pursue is another. Here are few compiling reasons to consider project selection as an important activity rather than opening the floodgates of projects:
Business Priority:
Every business has its own priorities and so it’s important to select the right projects that are aligned with your priorities. Having many dispersed projects will blemish, if not nullify the impact of projects. Alignment between leader’s priority & CI program can be easily accomplished if you select projects right at the beginning.
Change due to competition:
If your competition is disrupting the industry, well you better select where you need to improve. External environment often forces organizations ruthlessly reform their way of thinking and working. And today, we all live in a world that is fast changing. So unless your right projects are selected and pursued, your CI program will become redundant soon.
High Customer Expectations:
Everyone I talk to says, customers are demanding more than ever before. Understanding the changing their needs and aligning the CI program to customers is vital to the success of any organization’s CI program. Organizations sometimes pursue trivial opportunities such as cost saves but miss on acting on big ticket customer facing projects or customer pain points. Of course, while dealing with customers, things are going to be volatile, but that’s not a reason to avoid them. The good project selection process should filter such project opportunities.
Limited Budgets:
All organizations must work within the framework of budgets. Improvements need monetary resources to support the change. Sometimes they are direct and hence easily associated to direct cost centers. But projects with intangible benefits or the ones incurring indirect costs usually end up as scapegoats. If an organization commits to project selection, many such failures can be prevented.
Availability of Resources:
Human capital is scarce. CI projects need quality time and mindshare from people of importance in the organization. Quite often resource requirements are never considered during the commencement of projects. Even if considered, it’s only the project leader’s time. As CI projects are a cross-functional effort, active participation of experts from all involved functions defines the success of the project. In order to ensure we get the best out of our teams, we need to time our success. Thus project selection is a time sensitive activity.
Optimizing Number of Projects:
Not all the areas of your organization need improvement at the same time, And improvement culture building is a slow and steady process which can never be implemented overnight, nor will the results reap overnight. So getting to rush out the organizational adrenaline may not be a success recipe for good CI program. Selection of projects will ensure that you sustain optimum enthusiasm in the system for CI.
So it is very evident that selection of projects impacts the CI culture, employee satisfaction, alignment to customers and ROI to business for the investments it makes in CI in a positive way. In the future articles, we’ll take this one step further and talk about the criteria used for selecting projects.
In July 12, 1854 George Eastman was born and in 1888 he gave birth to a brand called ‘Kodak’ that went to become a household brand in every part of the world. Yet in the year 2012, Kodak filed for Chapter 11 bankruptcy. We don’t know how George Eastman would have reacted to this, but many of us regretfully miss the Kodak moments. Many prominent brands such as Nokia, Compaq, Motorola, HP, Xerox, Lucent, GM, IBM, JC Penny are fighting the battle of survival successfully or otherwise. One can associate technological disruptions, shrinking economies, flat world, etc. as the real culprits. On the other hand Apple, Google, Amazon and many others seem to have mastered the trick of survival and, are growing multi-fold.
Today’s reality is that, every institution, immaterial of their scale, be it private sector, government or non-profit is fighting the same battle. They are constantly challenged to evolve and become fit for the future. If they don’t, they perish. It’s like Darwin’s theory of evolution for institutions. Don’t be quick to associate an institution’s strategy to its success. As Peter Drucker put it “Culture eats Strategy for Breakfast”. Leaders define an institution’s culture and ironically that very same culture creates the leaders!
Let’s set aside culture for a while and examine what does all this mean to us as employees, managers and budding leaders?
If you take a closer look at your job description, you will notice two kinds of goals – First is to ‘Run the Business’ and the next is to ‘Change the Business’. ‘Run the Business’ means mundane stuff that all of us dread, but we don’t have a choice, we need to keep the mill rolling, such as maintaining desired production levels, meeting service levels, quality levels, etc.
On the other hand, ‘Change the Business’, involves achieving a new level of performance by challenging the status-quo, eliminating the bottlenecks, evolving newer ways of doing things, etc., such as taking production, service levels, and quality to new heights.
To drive such changes a new set of skills are needed which are much broader than mere domain/core knowledge you may already posses in Financial Management, Manufacturing, Engineering, Software Development, Technology, etc.
It is also not about learning few creativity & analytical tools, but it’s about acquiring change management & leadership attributes, as best ideas will never solve a problem, until they are widely accepted by all stakeholders.
Organizations hire you for your Qualification and/or past experience, but their will reward, recognize and promote only when you directly contribute to their strategic change priorities and goals.
As institutions constantly fight this battle of survival, they choose reward and recognize employees who can change their business, because by doing so you can make your institution (and yourself) future fit!
The good news is, there are structured methods, tools and techniques of managerial excellence to ‘Change the Business’ and can be acquired with little effort.
Lean Six Sigma is one such proven philosophy & tool which helped institutions like GE, Ford, Bank of America, Amazon, Boeing, Dell, Motorola, 3M, US Army, US Marine Corps, Caterpillar, National Kidney Foundation, etc. to transform and become future fit.
Thus organizations are constantly looking for professionals who understand and know how to apply Lean Six Sigma methods in real life business. It supplements your core strengths and acts like a booster. Further, Lean Six Sigma is an industry antagonistic skill and hence it doubles the opportunity of cross-industry employment.
Institutions that use Lean Six Sigma as a tool to set right their culture have largely benefited in driving the following behaviors of managerial excellence in their employees:
Truly Understand Customers
‘When a customer asks for a drill, all he wants is a hole”.
Managers who understand customer’s environment are the ones who unearth and fulfill their needs in the best possible way. Lean Six Sigma methodology introduces you to an array of tools that help in capturing the real needs of customers, prioritizing, designing products/services and, further to align people and processes.
Challenge the Status-quo
Not only individuals but also organizations are slaves of their paradigm. Lean Six Sigma teaches you tools to mercilessly challenge every practice of your organization. As a manager, you will learn to imbibe the traits that will constantly evolve your processes and make them world-class.
Getting it right the first time
Have you heard of 1-10-100 rule. If a customer receives a defective product or experiences poor service, it costs you Rs.100 on account of returns, service recovery, scrap, legal complications (if customer resorts to legal recourse), increased marketing expenses to cope with brand damage, etc.
On the other hand, when your quality inspector catches this defect before it is shipped to the customer, then it will cost you Rs.10 on account of rework, scrap, and quality inspection.
But if you provide the product/service right the first time, it will just cost you only Re.1!
So, doing things right the first time pays off. Lean Six Sigma provides several techniques to make this happen in your organization.
Go to the root of problems
‘Fire Service saves our lives, but fire-fighting in office kills us’
Most of us are forced to spend sleepless nights to ensure the organization stays afloat and process continues to tick with the clock.
No scientific analysis is needed to prove that most of the fire-fighting is preventable.
Lean Six Sigma drives a culture through structured methods and tools to go to the root of the problems and fix them forever rather than muddling in a heap of corrective actions.
Doing more with less
Even the biggest of the organizations in the world, have resource constraints.
In Japanese, ‘Muda’ means waste. The key to effective cost management isn’t efficient cost cutting, rather carefully weed off ‘Muda’ (process wastes) in the system. Organizations such as Toyota, TVS Group, Maruti Suzuki, and Bajaj have been big proponents of Lean methodology in India.
Being Grounded
Only when Prince Siddhartha came down from his ivory tower to the streets of his kingdom to find his people starving, ailing and dying did he attain enlightenment.
In Lean Six Sigma, ‘Gemba’ means the real place of work. By learning the structured and methodical way of visiting one’s gemba regularly, leaders can understand the ground reality and take quick actions to drive excellence, which otherwise consumes months of rigorous and tedious data analysis and several board room reviews.
Lead Teams towards Excellence
In order to lead & retain great talent, rather than relying on your intuition and gut, you should use data to differentiate good and not so good performers. Six Sigma institutionalizes practices to measure & manage performances of processes and people by monitoring leading indicators instead of lagging business indicators.
Data also directly impacts your ability to communicate crisply, candidly, with greater confidence and conviction.
Presence of data also reduces the time you spend in fixing things, which, in turn can be used to build emotional connect and better relationship with your team.
As Tom Peters puts it “Excellent firms don’t believe in excellence instead they believe in constant improvement and constant change”
Embarking on a journey of excellence for an organization and an individual isn’t about envisioning, it’s more about equipping managers with right methods, tools and techniques, thereby fostering the right culture!
How Six Sigma Black Belts Can Deliver Choku-Zuki* as Internal Consultants?
*Choku-Zuki in Karate refers to straight punch
General Electric, one of the largest producers and suppliers of Lean Six Sigma talent by the turn of last century is no more an ardent advocate of this principle. GE isn’t alone; there are many other enterprises like Bank of America, Citibank which have moved on. While the demand for Six Sigma Black Belts has been steadily declining in some economies, most ticking economies have mentionable demand. Several third party certification agencies have replaced GE and other large corporations as the suppliers of Lean Six Sigma Black Belts.
Where do all these changes leave a Certified Lean Six Sigma Black Belt? Black Belts have been under tremendous pressure to cope with dynamic needs of business leaders they support. Traditionally, external consultants from Big 4 and the next rung of firms were hired for delivering Quality and Productivity enhancement projects. Today, Black Belts hired on company rolls are managing these projects. So they are well positioned and duly expected to act as ‘Internal Business Consultants’.
Like a half filled glass, this is certainly an opportunity and threat. But the odds against Black Belts are so high that this glass isn’t half full but nearly empty one!
The inconvenient truth is that most Certified Lean Six Sigma Black Belts stand no competition to Operations Management Consultants from the Big 4 or firms.
The gap really isn’t about the body of knowledge (bok) or the versatility of playing with Minitab or JMP screens. It goes beyond this and requires closer examination.
While hiring an external consultant, clients look for referrals, credentials, chemistry and demeanor. A good consultant is someone, clients hate to see go when the project ends on time and is preferred choice of re-hire for the next suitable assignment.
Many black belts wouldn’t openly agree but concur in confidence that business leaders see them as ‘imposed bodies of cost’ that should be off-loaded sooner or later. As a matter of fact, Black Belt’s presence or absence hardly makes any difference to them.
I wouldn’t hold Black Belts solely responsible for this situation. CEO’s intent, Six Sigma deployment leader’s effectiveness, organizational culture and many other factors play havoc. But for now, I would like to restrict to things which are well within the control of Black Belts. After all a Black Belt is the biggest stakeholder in her own career. Let’s examine the barriers(don’ts) and levers(dos) for Black Belts to become a preferred choice of consultant (both internal and external).
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