1. The spark
1.1 LSS doesn’t seem to be working and there is another way
Lean/Six Sigma is one strategy many organizations use as a part of their overall Transformation Program. We have recently been working with a number of organizations that are struggling in various ways with their Lean/Six-Sigma programs:
- A global financial services company brought in Six Sigma last year, got some good initial results, but these diminished over time and little of value was being delivered a year later. The bank then changed its focus to Lean, they disbanded their Six Sigma team, and are now trying to make this new approach work.
- A global Pharmaceutical company has spent millions working with a leading consultancy to build a Six Sigma program, to develop the needed ‘Belts’. Their CEO has limited visibility of how the program is going, receiving only monthly Excel Spreadsheet updates in which he has little confidence or opportunity to influence. He cannot afford for this to fail.
- A major supplier of the Healthcare sector has had the same leading consultancy helping them implement Lean. Black and Master Black Belts have been parachuted in, projects have been delivered, but no real knowledge and skills transfer has occurred. The million Euro investment has delivered some impact, but is now floundering.
1.2 Culture change is being short-changed
At the heart of each of these examples is a highly programmatic, methodology-driven, and expert-based approach to making organizational change happen. The deep integration of the underlying philosophy of core Lean/Six-Sigma into the culture is simply not happening. So, changes are short-lived and ebb away over time as the spotlight moves onto other strategies.
1.3 No purposeful, collaborative environment to enable LSS changes
Despite highly connected, end-to-end enterprise systems for the core business processes (ERP, CRM, HRM, etc.), the Program teams and organization delivering Lean/Six-Sigma business changes have few if any systems to support them. If they are lucky they might have a reporting tool to extract progress and reports. Probably they’ll have desktop applications to help execute elements of the methodology, for example the LSS analytical tools. Certainly, people won’t have any collaborative LSS solution that provides these tools so that people can easily work together on them and deliver sustainable change through their LSS projects.
1.4 Expert-driven versus organizational stickiness
The lack of focus on culture change and underlying systems to support LSS programs means that often they remain driven by ‘experts’. This reduces true organizational adoption and stickiness of the approach. Parachuting-in of expertise, driven by the Master Black Belt/Black Belt/Etc. structure, is inadvertently detracting from the critical task of knowledge transfer, making changes less enduring than needed.
We believe these flawed approaches are central to many Six Sigma/Lean/Lean-Six-Sigma failures.
2. Historical context
Over the past two decades there have been many methodologies and approaches adopted in order to dramatically improve business performance.
At the center of all of this have been the improvement methodologies started in the ‘50’s in Japan that eventually came West in the ‘80’s under the Lean, Just-in-Time (JIT), Total Quality Control /Management (TQC/M) and Kaizen banners.
2.1 Pulling not pushing
Lean, a central tenet of the Quality revolution, focuses on a fundamental shift to a ‘pull’ based approach across the whole system. In post-war Japan resources of all forms - raw material, working capital, etc., were scarce. This drove Toyota to transform conventional, mass-production manufacturing so they could viably build a wider range of models in radically smaller quantities. They shifted from a ‘push’ (build to stock), to a ‘pull’ (build to order) approach, forcing the elimination of waste across the system (over-production, inventory mountains, inspecting quality into the product, etc). In the ‘80’s the West caught onto this approach, and called it Lean manufacturing, of which Just-in-Time was a major element.
Having been on the coal face during this period (setting up a JIT supply base for a green-field Hewlett Packard business), the shift was revolutionary. Conventional wisdom said you needed to have three or more suppliers in order to optimise pricing, delivery and security of supply. Lean said, define your strategic components, single-source their supply, and work together to deliver ‘leanly’ (no incoming inspection, delivery of components straight to the line, 2 weeks inventory max on high value parts, etc.). I directly experienced the responsibility and investment needed to succeed in a single-source mode, and how it drove deep collaboration centred on removing ‘waste’ from the process so we could all succeed. We restructured to integrate strategic supply chain and manufacturing expertise into the development process. We optimised product specs for manufacturing and assembly, and radically changed our operational, commercial and planning models with suppliers. There simply was little or no fall back if things went wrong. In Lean, every process, from understanding the market need and orders, through to delivery of the product to market has to be aligned and streamlined to remove wasteful practices.
2.2 Quality tools and culture to improve processes
As well as the pull/flow-based thinking of Lean, the Quality revolution brought tools that would operationally drive the ongoing improvement and control of process quality, cost and yields:
- Problem identification tools: flow charting, check sheets, brainstorming, nominal group techniques, pareto charts, etc., and
- Problem analysis tools: histograms, scatter diagrams, control charts, process capability analysis, run charts, cause and effect, etc.
But the tools are just the tools. At the heart of Lean is a bottom-up, problem-solving culture. This ensures that people operating the processes are skilled, equipped and empowered to control them, and identify and deliver the necessary changes/improvements. Supervisors and Managers work alongside staff simplifying and eliminating waste from processes. Fundamentally, a pervasive culture of full employee engagement in continual process and skills improvement is required.
Initially known as Total Quality Control (TQC), this then evolved into TQM which extended the thinking from operational processes to include management and support processes.
2.3 Motorola bring six-sigma to the table
In the ‘80’s Motorola, inspired by TQC/M approaches, pioneered the concept of Six Sigma. This shifted the goal-posts from thinking a process performance rating of 99% was good, to it being dismally inadequate i.e. ten thousand failures are happening for every million successes! It brought a statistical rigour and toolkits to the development of business processes, and an explicit focus on the financial impact. However, unlike TQC/M that drives change from developing the skill of the core business team, Six Sigma uses an organizational structure of experts to provide the impetus and knowledge for solving problems – an accredited belt system denoting expertise, span of influence, and level of role dedication to the Six Sigma task – Master Black Belts, Black Belts, etc..
I remember the shock of learning that we needed to deploy Six Sigma within our Hewlett Packard business unit as an accreditation requirement for supply to IBM. My initial thinking was that pushing to achieve parts per million failure levels was simply was a step too far. In fact it wasn’t - we integrated the Six Sigma approach into our existing business quality practices and philosophy, and dramatically raised the bar on our performance. As a lean/quality-driven business, with many years experience/success deploying these approaches, we rapidly enhanced our quality tools, skills and thinking with the Six Sigma methodology.
3. Best practice thinking – lean six-sigma and operational excellence
Today the system-based, ‘pull’ thinking of Lean has been combined with the statistical rigor and strengths of Six-Sigma into what is known as Lean-Six-Sigma (LSS). Under the banner of Operational Excellence, LSS business process excellence is coupled with change enablers such as technology and information, culture, organization and people, and clear strategy to properly bring it alive and integrate it into day-to-day business practice.
In this way, organizations know:
- what’s important to focus on - clear connection to the corporate strategy
- what’s broken and needs improving - KPI reports from the management control system
- how to address it
- by knowing what to deliver via integrated, reliable, pull-based end-to-end management systems
- by constant streamlining and improvement of business processes via application of LSS thinking, methodologies and tools
- how to make it stick/endure – by explicitly shaping people’s behavior and the organizational culture.
- think ‘pull’ rather than ‘push’
- systematically drive out waste and redundancy from the system
- improvement is a never ending task
- the whole organization needs to embrace the thinking and approach; and
- people doing the job, given the right tools and support, know most about how to make improvements happen, and want to make things better.
- pushing people through training (but then not into direct and continuous application of this knowledge)
- push communications with the broader organization, with little opportunity for healthy dialogue about problem solving, cultural expectations, challenges, etc.
- pushing Black Belts onto teams (and not expecting supervisors and managers to be able to stand alongside and lead their teams in improving their business).
- pulling people into improvement of the processes they operate
- developing their skills through hands-on delivery of change to their processes
- facilitating learning and dialogue across the organization about LSS successes and failures
- connecting in-the-process practitioners with others they can discuss with and learn from.
- Provides inter/intranet-based tools within a team workspace structured on the DMAIC phases
- Provides the DMAIC lifecycle and tools within the Platform so teams can deliver projects, thus building organizational knowledge with every project
- Ensures people can easily find other projects and colleagues with relevant expertise based on how they tackled their projects and applied the tools
- Gives leaders visibility so they can actively and intelligently encourage the continued embedding of the approach into the day-to-day way in which work gets done.
The Operational Excellence approach therefore provides a more cohesive and integrated approach to delivering enduring business change. This is vital given the level of failures involved.
4. The LSS approach – has evolved and endured but not enough!
Over time the methodology and tool-kit has been supplemented and refined, but the original tools and underlying philosophy and intent have largely endured:
However, there are too many instances where organizational implementations are not enduring!
One unintended consequence of the Six Sigma approach needs unpicking, namely that the separate Six Sigma expertise structure can, and sometimes does, undermine the widespread cultural adoption.
4.1 Adopting the LSS culture – patchy and flaky?
Over the past 20 years the introduction of the accreditation-based Six Sigma methodology has driven a dramatic increase in the commoditisation and productisation of the methodology. Every major consulting practice now has a Lean-Six Sigma blue-print, the A, B, C of delivering dramatic business change. Whilst this blue-print serves a valuable purpose, demystifying the change process, there is also a big danger that it implies a complex, multi-dimensional culture and business change strategy (to become lean, etc.), can be rapidly delivered via the blue-print.
What’s more, all too often external consultants start to drive this change, rather than business leaders and staff. This thinking and approach is fundamentally flawed, and is resulting in the poor adoption of these transforming approaches.
Basically, the workforce remains at the passive/active involvement level rather than really taking ownership for ongoing delivery of change. After all, the tools are just the tools. Without the proper transfer of skills, mindset and ownership across all levels of the business, they become just another expensive consulting investment that doesn’t add commensurate or sustained value to the bottom line.
4.2 Is culture change being short-changed?
Given the substantial cultural change that is implicit in the whole approach, where is the toolkit to support this, and how can enduring cultural adoption of these approaches be achieved? It seems there is a glut of ‘technical’ tools, and a dearth of ‘cultural adoption’ tools. For example, how many LSS programs analyze and make the appropriate changes in their organizational structures, responsibilities, performance management systems and broader management processes so that LSS really sticks as a fundamental way of doing business? How often is DILO analysis (day in the life of) used to understand the ‘as-is’ state of people’s roles, create dialogue around the required ‘to-be’ state, and to work through the needed transition? How often is DMAIC maturity measured over the long haul, i.e. demonstrated organizational confidence and competence delivering value with the LSS approach and tools rather than reliance on a super-team of ‘Belts’? Fundamentally, the people side of change is not being robustly managed over either the short or long term.
4.3 Push versus pull of culture change
My guess is that often the cultural change aspect of LSS is also being approached through a fundamentally ‘push’ strategy:
Clearly some push is required, but in balance with:
Fundamentally, people want to improve the business, they want to fix problems and make a difference. It is a critical leadership role to provide the conditions in which this happens by working with people and all the elements that drive the culture with energy and focus.
4.4 No pull-based system to facilitate culture change
A key problem facing all Operational Excellence programs is that, beyond face-to-face meetings, there is no suitable environment within which teams can collaborate whilst tackling improvement projects. To contribute to your project I need to email, call or meet with you. To find similar projects that will help me better apply the methodology I need to look through an Excel tracking sheet, or maybe find a project summary document in the Knowledge Management system. To find out how things are going overall (what the project funnel looks like, which projects are stuck, delivering great results, etc.) I need to wait for the monthly Excel tracking sheet. Everything is highly manual and fragmented with broader organizational knowledge and expertise remaining largely invisible. LSS programs are not alone.
In fact, these issues are pervasive across all types of change strategies employed by companies (for example cost reduction, outsourcing, customer excellence, acquisition, etc.) and solutions simply don’t exist to overcome these challenges. Element8’s xpoint™ platform, however, bridges these gaps, providing a common life-cycle based environment. In this environment teams have access to appropriate lifecycles to support the type of work they are tackling. Operational Excellence teams are therefore provided with a DMAIC based toolkit to deliver their projects. So, for OpEx teams, the Platform: