How to Improve Your Business Without Really Trying
U.S. companies that compete in the global marketplace are currently enjoying a competitive advantage due to the weakness of the U.S. dollar. As a result, they may be tempted to place their productivity improvement efforts on the back burner, when now is actually the time when companies should be assessing their track record on productivity and evaluating whether they are getting the results they need. Eventually, the exchange-rate pendulum will swing back the other way, and those companies that have been neglecting productivity will be in trouble.
For the past 10 to 15 years, many companies have relied on Six Sigma as an improvement tool to become more competitive. Unfortunately for most companies, if they do an honest assessment, Six Sigma has not provided the performance enhancements that were expected. In fact, evidence suggests that many Six Sigma programs absorb so much time, energy, labor and financial resources that company performance is actually negatively impacted.
With increasing frequency, U.S. executives are asking two questions:
- Why is our Six Sigma program not delivering the results we need?
- If not Six Sigma...then what?
Over the past 20 years, companies such as Bridgestone/Firestone, BASF, Olin, Milliken, Carmax, and Lowe's have been using QualPro's MVT (multivariable testing) process to reduce costs, increase throughput, improve sales, raise quality, enhance safety and achieve higher profitability. MVT is a performance improvement process that employs advanced statistical techniques to help companies rapidly test dozens of improvement strategies.
Since many of companies have existing or prior Six Sigma efforts, my company has observed the weaknesses of Six Sigma first hand and has spent hundreds of hours with client executives as they described the shortcomings of Six Sigma in their operations.
Based on these experiences, it has been concluded that the following flaws prevent Six Sigma efforts from delivering on expectations:
Six Sigma is Expensive: The process of integrating Six Sigma's results into an organization can be extremely expensive, and many organizations just cannot afford the cost. A Six Sigma roll out requires training and staffing additions to accommodate the program's system of master black belts, black belts, and green belts. Companies find that the effort requires tremendous energy and takes a serious toll on employees, executives, and the company's finances. The MVT process is committed to applying changes to an organization that are practical, fast and cost free and typically delivers an ROI of 5x to 100x in the first year and beyond.
Six Sigma is Slow: Because of the fixed structure of the program, Six Sigma can take a year or two before any results can be seen, while other improvement methods such as MVT typically begin showing results in just a few months. Most organizations do not have the energy or commitment to even successfully get through the start up of Six Sigma. The slow pace causes employees involved in its efforts to become frustrated and stressed, which loses the battle for hearts and minds.
Six Sigma is Not Hands On: Six Sigma efforts are driven by black belts and often the work force has little understanding or involvement in the process to determine actions to be taken. The MVT process generates ideas from throughout the organization. Line workers and managers are then involved in the testing of the ideas to identify which ideas have a positive effect on results. This not only breeds a feeling of empowerment that is an outstanding morale booster, it builds work force enthusiasm for implementing improvement strategies.
Six Sigma is Complicated and Disruptive: The Six Sigma program requires numerous staffing changes and establishes a bureaucracy which many companies find to be very complicated, while MVT focuses on testing and implementing improvements that pose little disruption to an organization's operations. Six Sigma requires many activities to be implemented that can throw off the usual flow of an organization's operations and necessary day-to-day activities often become less of a priority.
Six Sigma is Inflexible and Demanding: Six Sigma is essentially an "all or nothing" preconceived corporate program. Its bureaucratic nature and its resolute structure leave no room for deviation, which makes it difficult for companies to implement into their current cultures and day-to-day processes. Companies must be prepared to drop everything, and comply with the strict elements of the program. Conversely, the MVT process can be applied broadly to achieve companywide improvement or it can be used more narrowly to focus on specific opportunities.
Six Sigma is not for Performance Breakthroughs: In a Sloan Management Review article (Winter 2002), Michael Hammer pointed out that Six Sigma is not effective at generating dramatic improvements in business performance. He pointed out that breakthrough improvements in performance required fundamental change, and that Six Sigma was just not a vehicle for business transformation. MVT's entire focus, on the other hand, is on identifying fundamental changes that will quickly achieve performance breakthroughs.
The productivity of U.S. companies is too important to leave in the hands of a flawed improvement approach like Six Sigma. If we are going to maintain our current standard of living, we must improve fast and choose a tool that is both uncomplicated and effective.
David Cochran is Vice President of Operations of QualPro, Inc. a Tennessee-based consulting firm that specializes in helping businesses achieve performance breakthroughs through the use of MVT.
