Six Sigma

It’s represented by a mysterious symbol, but there’s no secret handshake – and no lodge. Its most devout followers are also its most public and happen to be some of our most exalted corporate leaders – but it is an open church and anyone can join. Its proponents are green belts, black belts – or even Master Black Belts – but they need not be feared in a dark alley. What is Six Sigma? Kaitlin Walsh finds out.

For those whose eyes begin to glaze or roll at the merest mention of the next, the hottest, the latest ‘big thing’ in business improvement, fear not, because Six Sigma isn’t. If, on the other hand, you’re after a quick fix, easy-cook three-step recipe for business success, then be afraid because that ain’t Six Sigma either.

“I still get clients asking me if this (Six Sigma) is the newest thing, and how long ‘this one’ will last. Well, it’s been more than 20 years, and it still hasn’t gone away.” So says Joe Barckett, senior consultant and Master Black Belt at SAI Global Professional Services in North America. You can pretty well track the highlights of the quality and business improvement movement, and with it the Six Sigma evolution, by where Barckett was at the time.

When, back in 1980, CBS screened a program titled: “If Japan Can, Why Can’t We?” lamenting the seeming inability of United States manufacturers to step up to the plate against their Japanese counterparts, it captured the imaginations of a generation of captains of American industry. Yes, indeed, they thought: why can’t we?

At the time, Joe Barckett was a new graduate with a Master’s in mathematics who’d just stepped in to his first role as a quality statistician for Sippican Ocean Systems (now Lockheed Martin Sippican), designers and makers of high-tech naval defence equipment.

At Sippican, the now well-established notion of ‘quality circles’ was explored, the concept freshly imported from Japan. In the following years, in a variety of quality-related roles with various major companies, Barckett gained conversance with the gamut of quality tools right there on the ground – generally running. From statistical process control, through to the reengineering revolution and its groundbreaking focus on cross functionality, through to TQM, Lean, the Toyota Production System, ISO 9000 and more – Barckett was there.

“I think the first 10 or 15 years of quality was characterised by an ongoing hunt for a ‘silver bullet’ – a cure-all that would address all the issues,” he says. “As a consequence, many of these highly valid and useful tools were taken out of context and applied either at the wrong point in the process or to the wrong parts of the business. Yes, there were gains, but often not business gains. They may have been internal or departmental benefits. Over time, we have refined them, learned to use them for their best purpose – to facilitate meaningful business gains.”

Barckett’s quality tour included attending early meetings, seminars and other learning events surrounding the nascence of Six Sigma, right back when Motorola coined the ‘Six Sigma’ term; then later when Jack Welch and GE gave it the razzle dazzle that has since cemented its position in the corporate lexicon.

It is telling that, after his years of involvement in the business, for the past 10 or so, Barckett has called a halt to his quality journey, taking a solid fighting stance squarely in the ‘dojo’ of Six Sigma – where he has, among other things, attained the position of Master Black Belt (see ‘How to catch the Six Sigma wave’). Such terminology is acknowledgement that Six Sigma, despite its very public American outing, owes a good part of its existence to Japanese roots.

Which brings us to the vexed question: what is Six Sigma? Although a name that’s commonly bandied about, for many, its true essence is shrouded in mystery.

This may well be due to the common, off-the-cuff definition, which generally involves quoting Six Sigma as the process by which a company can reduce its defects to a very low rate: ideally right down to the ‘6 ’ ‘magic number’ of 3.4 defects in a million. This is no arbitrary figure, but is arrived at via a number of equations: see box: ‘Ladies and gentlemen: start your propellers’ for the technical low down.

Variously described as a business management ‘system’, ‘methodology’ or ‘technique’, perhaps most accurately, it is all of these and more rolled into a distinct business philosophy that, over time and with hard work, becomes embedded in the very structure, processes and culture of an organization.

According to Barckett, in a ‘true’ Six Sigma company, following the Six Sigma ‘way of business’ will help to establish processes that result in the minimum possible number of defects and enable those processes to be successfully replicated, time and again. Further, and perhaps even more importantly, this ‘way of business’ will also promote a measurable level of continual improvement in its processes, products or services.

Another leading commentator, George Eckes, in his book The Six Sigma Revolution. How General Electric and others turned process into profits, (John Wiley, 2000) concurs: “While Six Sigma is a technical measure of performance against customer requirements, there is a far more important definition of sigma, that of a cultural philosophy of never-ending dissatisfaction with current performance.” Yeah right, the cynics could be forgiven for asking, so does it also include a trip to Disneyland?

Clearly, the likes of GE, Honeywell, Motorola, Bank of America, Caterpillar, Inc and other high profile, on-the-record Six Sigma devotees are more than happy to go wherever the Six Sigma ride takes them. Judging by the global success of such companies, it really is a small world, after all. (In addition, reaping the serious bottom line benefits that many corporations openly attribute to Six Sigma could always be defined as the corporate equivalent to Disneyland.)

Perhaps the most often quoted bottom line figures are those associated with Jack Welch and GE’s Six Sigma experience. Under the tutelage of Six Sigma master black belt Mikel Harry, GE is on the record as claiming savings in the order of $170 million for a $200 million investment in year one; and $700 million for a $400 million investment in year two. Since the mid-1990s, Six Sigma has become an integral part of the GE way of business.

So, now you know what it is, how do you get it? Motorola, GE and those coming after them have set up a model for Six Sigma implementation that involves ‘seeding’ your organization with a succession of ‘waves’ of trained Six Sigma practitioners, starting with the black belts. Each wave goes forth to disseminate Six Sigma throughout the organization: specifically, by running or participating in projects according to the Six Sigma process; and more generally, by applying the precepts and disciplines of Six Sigma to the broader cultural realm of the workplace.

Typically a Six Sigma Master Black Belt, such as Joe Barckett, will be brought in to train a core team comprised of the most talented and dynamic leaders, to form the first wave of black belts. These black belts, as the name implies, form the elite Six Sigma vanguard. Alternatively, depending on the size and nature of your organization, one or more key people might be chosen to attend a public course, to get a feel for Six Sigma.

SAI Global has developed its own training methodology, tools and materials based on years of experience, including association with the Six Sigma training programs of major organizations including PricewaterhouseCoopers and IBM. “A major feature of our training methodology is applied learning, using live projects that are first submitted to us to ensure they are suitable for Six Sigma. We then work though the DMAIC* steps as applied to each particular project,” explains Joe Barckett. “This approach has myriad benefits. Clearly, from a participant perspective it is a richer, more meaningful learning experience than working with abstracts. From the corporation’s perspective, it means they’re getting the benefit of a Six Sigma project from the get-go."

SAI Global also uses a ‘Just in Time’ training model which involves ongoing, one-on-one coaching support in the periods between the four one-week intensive classroom-based training ‘blocks’ that the company’s black belt training typically involves. to Barckett, such are the rigours of certification that a relatively small number of total black belt course participants submit to it. The rigours are, however, rewarded. There is high demand for black belt skills across corporate America, which translates to high salaries and bonuses. Importantly, broader, deeper skills often mean a higher level of work satisfaction for these ‘achievers’.

Green belt training involves training to a different level, generally requiring one or two weeks’ classroom training, again over a period of months. A trained green belt is able to complement the skills of a black belt or may perhaps run his or her own smaller, often more departmentally oriented, projects.

“The coaching helps the client use the correct tool when they need it,” says Barckett. “This accelerates not only the learning, but also the project, hence savings to the company. It means more projects in less time.”
Barckett goes on to say that it would be rare, although not unheard-of, for a participant to undergo black belt training without a specific project in hand.

The time spent away from the office required by the rigours of black belt training is an issue for some companies considering adopting Six Sigma. SAI Global is currently exploring a variety of blended learning techniques that can be undertaken to limit absence from the workplace. These include online and interactive learning options. However, a genuine Six Sigma training program is serious business and will always involve a number of dedicated classroom hours.

Many companies have lived to reap the very public benefits of investing so much resource time in Six Sigma training. One case in point is 2004 Malcolm Baldrige National Quality Award recipient, Bama Cos., a food manufacturing company based in Tulsa, Oklahoma. With over 1000 employees and a revenue base of over $200 million Bama supplies Taco Bell, Pizza Hut, Wal-Mart and McDonald’s. Winning the Baldrige – an award so prestigious that it is enshrined by an Act of Congress – is just one of the goals set by visionary CEO, Paula Marshall-Chapman.

In 2000, Marshall-Chapman (who has been described as a ‘quality fanatic’) pulled her eight top managers out from their day-to-day duties for two years to learn Six Sigma. According to reports relating to the 2004 Baldrige Award recipients, this move saved the company $17.3 million between 2002 and 2004.

The Malcolm Baldrige Awards were created by the “Malcolm Baldrige National Quality Award Act of 1987,” to encourage American business and other organizations to practice effective quality control. They arose out of recognition that American business – manufacturing business in particular – had reached a crossroads. On the one side were clear warning signs of potential shortcomings against foreign competition (a la the CBS vision of seven years earlier). On the other, however, lay a clear vision of the possibilities for improvement offered by effective, management-led, customer-oriented quality improvement programs. Since their inception, the Award categories have been expanded in line with increasing understanding of the imperatives of effective quality and business improvement.

Six Sigma companies make up a more-than-representative sample of Baldrige recipients – including, in 1996, a State category winner in the Service category, MicroAge Computers – for whom Joe Barckett was Director of Quality.

At its rawest, most often quoted (and perhaps most arcane), Six Sigma finds expression in a number of equations involving the rate of standard deviation from a sample size (or population) of one million.

The Greek letter ‘sigma’ s is the statistical symbol for the standard deviation of a population. The number ‘6’ represents the s value when this deviation rate reaches 3.4 per million: hence 6s. Thus, at tintacks, a ‘Six Sigma’ organization could be described as one that has 3.4 million defects per million defect opportunities per critical customer requirement. For example, a plastic cup can be defective for several reasons: a hole, wrong shape, wrong size. Each is a defect. Based on those three defects there are three opportunities. The CCR (critical customer requirement) might be zero defective cups. The science behind the Six Sigma formulae gets the nod from those in the know as a true quality metric, in the same realm as capability indices, because it describes ‘how well’ the process is performing.

The most rigorously analytical and data driven management discipline around, only clearly defined, quantified and measurable factors make the Six Sigma cut. These definitions and measurements form an integral part of perhaps the best known Six Sigma methodology: Define Measure Analyse Improve Control (DMAIC). This is a Six Sigma process. At each step along the process map, the most appropriate of the many ‘tools’ now so familiar to the quality and management professional can be used as part of the process.

For some, Six Sigma’s results-driven focus on formulae, data and the strictly measurable and quantifiable – generally in dollars and cents – gives rise to a question about whether such a ‘rigid’ sounding system can truly both meet and reconcile various stakeholder interests.

Where results are typically judged with reference to costs cut, revenue raised, for example, where does customer satisfaction come in? How does Six Sigma accommodate such apparently competing aims?

As Joe Barckett explains, it’s all in the equation. And in the Six Sigma equation, customer is king. “Six Sigma entails using a measure of true quality,” he says. “And that involves both process – say, in the manufacturing world, how a product is made – and performance – how well it meets the customer’s need. In Six Sigma, the two are inextricably linked. In the measure at the endpoint, it is not possible for one to compromise the other. If customers are not satisfied, then as a measure – and it’s all a measure – it has failed. So the only solutions are those in which all are taken into account.”

Another common criticism is that Six Sigma defect rates are so low as to be either unachievable or otherwise meaningless in the context of certain organizations. However, in his white paper, “How to complement ISO 9001:2000 with Six Sigma”, Patrick L Dey points out that low defect rates are not mandated by Six Sigma. Rather, he says, “realistic assessments of return on investment, and in some cases, commercial survival, will mandate Six Sigma quality levels more often than many might think.” In short, it involves running your business in such a way that defects are reduced to the very minimum possible.

So, years down the quality track, are businesses savvier? Have we learned from the mistakes of the past – and let’s face it, there have been enough to build a whole country full of PhDs.
Not necessarily, says Joe Barckett.

“There is still a ‘management by bestseller’ type attitude in some quarters,” he says. “We can be looking at entrenched systemic problems that took decades to develop and there is still an expectation that there is that same old silver bullet or holy grail – something that will solve their problems without requiring all hands on deck, delving into the details, some serious effort and yes, some time involved in getting it right.”

To sum up? From a Six Sigma perspective, if you’re after sustainable success, you’re still going to have to go the whole nine yards. Six Sigma can rebuild you: make you better, stronger, faster – but it requires commitment, resources and way more than a passing glance at the details. That said, there’s a whole world of help out there – you just have to reach out for it.

Kaitlin Walsh is a business writer specializing in management systems and business improvement.

Do a web search on Six Sigma and you’ll come up with close to 30,000,000 responses. Some good starting points include:

As one who’s had a 3-D view of the inner workings of some of our major corporations: from client, consultant and training perspectives, Joe Barckett has a number of tips
and insights that may help organizations intent on achieving the unmistakable gains that Six Sigma can deliver.