Lean Six Sigma and the Balanced Scorecard: Moving Tool Usage Toward Achievement of the 3 Rs of Business

A system for problem solving, which focuses on project creation and execution, is Lean Six Sigma. The tools of Six Sigma focus on defect reduction and Lean focuses on the reduction of waste. Described below is an article which leads into a four book set which describes how to take Lean Six Sigma and the Balanced Scorecard to the next level to address the 3 Rs of business; i.e., everyone doing the Right things, and doing them Right, at the Right time. This Integrated Enterprise Excellence (IEE) system is business governance management.

In a Lean Six Sigma deployment, a steering committee traditionally selects projects with focus being given to improving a process where total amount saved from all projects is the primary measure of success and/or employee certification. However, what often happens with this traditional Lean Six Sigma approach is that there is a “push” for project creation; e.g, people hunt for projects because they need certification or because the the Lean Six Sigma project steering committee are compelled to report to the business how much they have saved.

This project selection system can have initial successes because the first project improvement needs are often obvious without any enterprise analyses. However, later it can become hard to find projects. In addition, many of the completed project savings might sound good but have questionable reported savings; e.g., 100 million dollars was reported in savings but nobody can find the money.

Typically after a period of time, people have a hard time defining and/or agreeing on which projects should be undertaken. In addition, typically Lean Six Sigma deployments do not analytically examine the organization as a whole during project selection. Projects may be selected by the company without overall enterprise constraint identification. This can lead to counterproductive behaviors and process sub-optimization. In the end, the company, as a whole, can be worse off as a result of a Lean Six Sigma project. An increased risk for this occurring is when there is a Lean Six Sigma deployment project selection functional entity, where this entity is separate from operational scorecards and business units with a metric for success of dollars saved.

In contrast, the framework of IEE blends analytics with innovation in the Enterprise process Define-Measure-Analyze-Improve-Control (E-DMAIC) analyze phase. This is accomplised in the analyze phase when examining an organizational value chain for improvement opportunities. In this enterprise analysis effort, theory of constraint, Lean, and Six Sigma tools are used to help the company develop specific targeted strategies that help the business, as a whole, improve. These strategies then yield value-chain performance metrics improvement needs, which results in manager’s performance-measurement-improvement-need pull (rather than push) approach for project creation. This effort can result in either process improvement or R&D design projects, which focus on the development of new, innovative solutions.

These objectives can be accomplished in both government and businesses through a 9-step 21st century Integrated Enterprise Excellence (IEE) system. More information can be found about IEE in:

- Quality article describing “The 3 Rs of Business”

- The American Management Association (AMA) describes the IEE system in a 2008 winter issue article. The system described in this article can become a guiding light for management to make good, healthy decisions for their organization.

- An IEE 4 book-volume series is available at book resellers such as Amazon.com: