All Posts Tagged With: "Six Sigma"
Making Change Happen
This is a guest article by Arnie Weimerksirch. If you want to contribute an article to Baldrige.com, check out the guidelines here.
Change is difficult. In our personal lives we struggle to break bad habits, eat a healthier diet, or get more exercise. In spite of our good intentions, we often fail.
Organizations also find it difficult to change: Studies show that almost 85% of change initiatives fail. Even when faced with a crisis, many organizations are not able to make the changes necessary to survive. As W. Edwards Deming said, “Survival is not mandatory; it is purely optional.”
In 2004, on the 50th anniversary of the Fortune 500 list, only 71 of the original 500 remained on the list. Not all of them failed, of course, but the majority did. And they failed because they were not able to change with the times.
Why is change so difficult and what is the answer? One of the main reasons transformation initiatives fail is our love of management fads. In her book, Fad Surfing in the Boardroom, Eileen Shapiro defines fad surfing as “the practice of riding the crest of the latest management panacea and then paddling out again just in time to ride the next one; always absorbing for managers and lucrative for consultants; frequently disastrous for organizations.”
New management theories are constantly developed by “gurus” and published in prestigious journals. Recent examples include the boundaryless organization, job sculpting, reengineering, and, yes, Six Sigma. Most of these new management theories turn out to be nothing more…
8Feb2010 | admin | 0 comments | ContinuedHarvard Business Review’s Most Influential Management Ideas of the Decade
Everybody has a Top 10 list and HBR is no different. Well, they’re a little different: Their editors came up with the Top 12 most influential management ideas since 2000 (“The Decade in Management Ideas,” Julia Kirby, January 1, 2010):
1. Shareholder Value as a Strategy. And not a good one. Even the guy who popularized it concurs. “Shareholder value is a result, not a strategy,” said Jack Welch. “Your main constituencies are your employees, your customers, and your products.”
2. IT as a Utility. Cloud computing is the latest step toward buying computing capabilities as services.
3. The Customer Chorus. Technical and social developments have given customers a stronger and more pervasive voice—and companies are finding ways to listen.
4. Enterprise Risk Management. Chief risk officers hold the new umbrella over pockets of risk that had been scattered, and addressed separately, throughout the organization.
5. The Creative Organization. The ability to produce creative output was seen as a competitive advantage to encourage through collaboration and diverse perspectives.
6. Open Source. Wikipedia, which represents the power of open source, was born in 2001.
7. Going Private. According to the article, “As the decade wore on, private equity’s playbook for turning around businesses was increasingly held up as best-practice management,” especially in the areas of strategic focus and governance.
8. Behavioral Economics. Rational thought alone does not explain human decision-making. Yup, that’s the 2000’s in a nutshell.
9. High Potentials. Some managers are more equal than others and you would be smart to develop them.
10. Competing on Analytics. The data you collect…
4Jan2010 | Steve George | 1 comment | ContinuedThe Next Big Thing?
A couple years ago a consultant friend asked me what I thought the next big thing would be after Six Sigma and Lean. I didn’t have an answer, but BusinessWeek thinks it knows.
It’s called jugaad, and it’s “fast becoming the latest buzzword in academic and management consulting circles” (“From India, the Latest Management Fad,” Reena Jana, BusinessWeek, December 2, 2009).
Pronounced joo-gaardh, jugaad is a Hindi slang word that means innovation to meet a customer’s immediate needs using scarce resources. Literally translated, it means “put-together contraption that moves.” In India, it’s commonly used to describe vehicles made out of whatever materials are available, most notably water pump sets that are converted into engines. According to Wikipedia, “the brakes of these vehicles very often fail and one of the passengers jumps down and applies a wooden block as a brake.”
If you don’t think that’s much of a threat to replace Six Sigma, you’re not thinking big enough. McKinsey consultants have begun discussing jugaad principles with their clients. Even Best Buy and Oracle are using jugaad to create more economical products and services.
We’re probably lucky they don’t build cars.
Still, the idea behind jugaad—innovation that is affordable and scalable—sounds appealing. Distancing it from its shoddy reputation will require a new horde of experts who can create a methodology that incorporates Six Sigma standards, Lean efficiency, and jugaad innovation.
Umm, excuse me while I call my consultant friend about that next big thing.
8Dec2009 | Steve George | 0 comments | Continued2009 Baldrige Award Winners Announced
Click on the organization to learn more.
Honeywell Federal Manufacturing & Technologies, Kansas City, Missouri, in the manufacturing category. With 2,700 employees and an annual operating budget of $540 million, FM&T is a management and operating contractor at the National Nuclear Security Administration’s Kansas City plant. Performance highlights include:
- Overall customer satisfaction at or above 95% for the last four years compared to a commercial best-in-class benchmark of 85%
- A Management Assurance System for identifying, implementing, measuring, and sustaining the “critical to quality” needs necessary for desired performance
- An Enterprise Alignment Process for daily accountability, aligned with FM&T’s balanced scorecard and strategic plan
- Cost savings of $23.5 million to $27 million annually for the past three fiscal years through the Six Sigma Plus Continuous Improvement Model
MidwayUSA, Columbia, Missouri, in the small business category. MidwayUSA has 243 full-time and 100 part-time employees and annual revenue of $185. It is a catalog/Internet-based retail merchant that offers shooting, reloading, gunsmithing, and hunting products. Performance highlights include:
- 1,500 documented processes, each focusing on the customer
- Overall customer loyalty of 94%
- Growth rate of 30% compared to 10% for its top competitor
- Strategic planning process that systematically aligns key processes to company goals, customer key requirements, and core competencies
AtlantiCare, Egg Harbor Township, New Jersey, in the health care category. AtlanticCare is a nonprofit health system with 4,872 employees and $700 million in annual revenues. Performance highlights include:
- Ranked seventh out of 4,200 hospitals in 2006 by Commonwealth Fund for clinical results in patient care
- Medical center volume increased from 34,000 discharges in 2000 to 56,000 in 2008,…
Organizational Improvement Training
The Alliance for Performance Excellence offers inexpensive online training on a broad range of organizational improvement topics. I can’t vouch for the quality of the training because I haven’t taken a course, but training provided by the Alliance, which is a network of Baldrige-based award programs, should be excellent.
Click here to review a complete list of courses on such subjects as:
- Control charts
- Customer service excellence
- Data-driven decision making
- Lean
- Problem solving
- Process management
- Quality tools
- Six Sigma
- Statistical process control
If you take an online course through the Alliance or have taken one, let us know what you think by commenting on this article or sending us an email.
10Nov2009 | Steve George | 0 comments | ContinuedReengineering Revisited
The reengineering revolution was poised to take off when Michael Hammer wrote a book with that title in 1995. It sputtered. Organizations had little time and even less desire to dump their processes and start over on blank sheets of paper.
The revolution was too daunting, but the ideas behind it remain valid. I was reminded of this as I was reading the book, Rethink: A Business Manifesto for Cutting Costs and Boosting Innovation, by Ric Merrifield (FT Press, 2009). He notes that seeking advice from people who actually do the work “tends to be more confusing than helpful. That’s because employees and managers…think of their jobs in terms of how they do them rather than what they are intended to accomplish.”
It’s always a good thing to involve the people working a process in improving that process, but you have to be careful not to lose sight of what that process is intended to accomplish. In Baldrige terms, that means being clear about whom the process serves and what the customers of that process require. It also means systematically evaluating key processes to identify opportunities for reengineering.
That’s one of the great benefits of a Lean kaizen event: Fresh eyes tear apart a process that has been running the same way for years and design a new process that is better and faster. And it takes less than a week.
The Baldrige Criteria ask: “How do you design and innovate your work processes to meet all the key requirements?” Some form of reengineering,…
3Sep2009 | Steve George | 0 comments | ContinuedThe Most Popular Improvement Tools
The list comes from the Global Benchmarking Network’s 2008 survey on business improvement and benchmarking. Which of these does your organization use?
- Mission and vision statement
- Customer/client surveys
- SWOT (Strengths/Weaknesses/Opportunities/Threats)
- Informal benchmarking (encouraging employees to learn from other organizations)
- Quality management system (think ISO)
- Improvement teams
- Employee suggestion scheme
- PDCA (Plan-Do-Check-Act)
- Performance benchmarking (comparing process/activity performance levels)
- Knowledge management
- Business process reengineering
- Balanced scorecard
- TQM (total quality management)
- Business excellence (using Baldrige, EFQM, or other national excellence models)
- Best practice benchmarking (structured process for comparing performance and implementing best practices)
- Corporate social responsibility system
- Lean
- Industrial housekeeping (5S)
- Quality function deployment (QFD)
- Six Sigma
More than 450 responses from 44 countries ranked their organizations’ usage of these improvement tools in the order above. The percent of usage ranged from 77% for “mission and vision statement” to 22% for Six Sigma. Every tool from the top through PDCA was used by more than half the respondents; the rest were used by fewer than half.
The Baldrige message is a good news/bad news deal: “Business excellence” is currently being used by just 40% of the respondents, which is pretty good considering that only 59% said they understood what the “business excellence” tool is.
You can read a summary of the survey here.
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