Newsletter - June 2002

Welcome to the Six Sigma Systems, Inc. Electronic Newsletter "The Integrator." Feel free to forward this to others who might have an interest in the topic.

Announcement!

Six Sigma Systems, Inc. is glad to announce a partnership with ManagementSystems Consulting Corporation (MSCC). As a result, the topic of this newsletter is corporate culture. Many process improvement practitioners like yourself have struggled over the years to design and implement technically superior processes, hindered by cultural issues. For many, corporate culture appears to be an unchangeable fact of life. MSCC, through years of experience and research, has developed methods that can be applied to assess and subsequently design and change corporate culture. They have also proven a relationship between financial success of a company and corporate culture. Below please find a brief explanation of their methods. In reviewing their methods, you will also see that the philosophy of Six Sigma and Lean play a significant role in the model suggested by MSCC.

If you would like to research these thoughts in more detail, you will find the link to MSCC at here.

The Six Building Blocks of Organizational Success:

Why are some organizations successful and others not successful over the long-term? Why did Starbucks succeed while Boston Market went into bankruptcy? Why has Wal-Mart become dominant, while K-Mart is struggling to survive? The answer lies in the ability to manage six building blocks of organizational success. In fact, research suggests that there is a 99% chance that the management of these six “building blocks” explains organizational success.

These six building blocks – organized into a Pyramid of Organizational Success – are:

1. Identifying a market that the company will serve.
2. Developing products and/or services to meet the needs of the chosen market.
3. Acquiring and effectively managing the resources (human, financial, and physical) needed to support the firm’s growth.
4. Implementing effective day-to-day operational systems (e.g., sales, accounting, production, information systems, etc.).
5. Effectively utilizing four management systems – planning, structure, management development, and performance management systems – to support the firm’s long-term development.
6. Understanding and effectively managing the firm’s corporate culture.

Building a successful firm over the long-term involves developing and implementing a strategic plan that defines the steps that will be taken to build the firm’s capabilities within all of the six building blocks contained in the Pyramid of Organizational Success We call this type of plan a. “strategic organizational development plan” because it is comprehensive unlike traditional strategic plans, which tend to focus most attention on markets and products.

The rationale for developing and using this type of plan is simple: for a firm to be successful over the long-term, it needs to focus on all six building blocks. If all are effectively managed, then the chances of becoming a Starbucks are enhanced.

If you have questions, comments, or submissions for this Newsletter send an e-mail to marjgreen@sixsigmasystems.com with "COMMENT" in the subject line.

If you have topics that you would like to see covered in future issues please let us know. Be sure to visit the Discussion Forum by clicking here.  Be involved by posting questions and getting in discussions.

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Newsletter - May 2002

Six Sigma in Transactional / Business / Service Processes.

Six Sigma has and still is revolutionizing industry and taking process quality to new levels. Many organizations not involved in manufacturing are beginning to apply Six Sigma to their processes, hoping to achieve the kind of results that ‘traditional’ implementations have yielded. Because of the challenges associated with this target rich area there have been both successes and failures. We will look here at a few of the elements that must be considered for success in this arena. There are many others to consider and as such this list is not intended to be comprehensive.

The logic of Six Sigma, is of course, applicable to the non-manufacturing arena and can be used to drive significant customer and financial improvement. Process behaviors are independent of what is being processed and thus process variation inhibits process performance regardless of the specific process. That said however, there are historic, organizational, skill and requirement differences that need to be considered when implementing Six Sigma in the transactional, administrative or business process world.

When considering the reasons for the success of Six Sigma, one must think about the critical elements. One of those elements is the structure and discipline associated with a quality Six Sigma implementation. The structure provides a framework that can be used for driving project work while the discipline ensures projects are consistently moved forward. Both of those elements still play a key role in transactional implementation, however the differences to traditional implementations must now be managed. The first thing to note is that many of the projects - especially those with substantial financial payoff are, cross-functional in nature. By default, several organizational units will be involved and additional tools and management support besides those found in traditional programs are now required for the teams. Since change must often times be made in many organizational units, in some cases even requiring organizational realignment, tools to ensure success for those tasks must now be included in the program. Along the same lines, project management tools must now expand from an individual contributor base to team based project management.

Another key piece of Six Sigma is the element of measurement itself. While many measurement systems in the manufacturing / design arena are not capable, a base to improve often times does exist. The concept of measurement quality, at least in concept, is often times known. Once we make the transition and apply Six Sigma in the transactional world, measurements, especially for the purpose of gaining process knowledge and process improvement, are often rare. Many measurements must be implemented, assessed, etc. Furthermore many measurements are attribute in nature, which again requires additional technical methods.

Data acquisition and analysis techniques must often times be complemented with techniques feasible in environments where direct manipulation is not possible. An array of tools is available to assist the improvement practitioner, but the appropriateness should be assessed based on the business type and the data availability prior to inclusion in the program. Examples of required techniques may be Least Squares or Cluster Analysis, just to name a few.

For more information on this topic, call us at 913.685.9280 or 602.789.9884 with any questions or comments you may have regarding this topic.