Organizations in a lean Six Sigma deployment often work at prioritizing Six Sigma projects from a pipeline list of potential undertakings; however, should there be other considerations?
Considerations when Prioritizing Six Sigma Projects within an Organization
This is a common reason people attend our Master Black Belt Class, two of the students in today’s class shared that as their expectation. Why do you think this is an issue almost 20 years after Six Sigma was introduced?
Probably because the current recommendations you read are not working to generate the project pipeline. Do you agree? I believe the current methods preached by the books and consultants are similar, get the leadership together and then brainstorm a list of potential projects. In these sessions, most suggested projects are in areas outside the organization of the person making the suggestion. In other wards, fix the other people’s groups.
After the list is made, then they discuss which ones to work. They decide this with a political discussion rather than a needs discussion. Every group gets a project that is acceptable to the leadership. Now, do you believe this is the right way to do it? Most organizations find that this method feels good but does not provide a good method.
When Six Sigma was new, at least when I was a black belt in the early 90’s. Everyone used the Motorola method. You started the system by building performance quality measures, at that time it was DPMO and sigma levels, and then targeted the improvement projects where you had the most significant quality issues. If that is where it started, what happened.
In my view, as Six Sigma moved away from manufacturing and into the transactional world. Which coincides with the General Electric roll out. There was data with no specifications or a general lack of data, so people fell to using opinions to prioritize the projects. I propose this shift caused the project pipeline to be filled with popular issues, but not the tough ones that need to be done. Back when I worked in Six Sigma (at Texas Instruments) in the early 90’s, the projects were all important and the drove significant gains in cost and business success. We had just finished a roll out of quality circles where we had lots of feel good, but don’t matter projects, so we avoided them.
How should you do it today? I believe that the project selection should derive from the organization performance. I teach the method proposed by Forrest Breyfogle in his Integrated Enterprise Excellence (IEE) system, which is quite derives from the original methods, not the current practices. He says to start with the business mission and vision, then identify the key business functions required to execute the mission along with the key financial metrics (a satellite metric) needed to be met. Each key function is examined to find a performance metric (a 30,000-ft-level metric) or two that measures the success of that function. Each of these metrics is evaluated for its representation of functional performance. Forrest calls this the generation of the organizational value chain.
For each functional performance metric, you assess performance to goal or expectation. This assessment is performed with a control chart over the typical long term business cycle. Every place that you determine that the performance is not what you expect, you develop a strategy to change performance. From this strategy you determine the organizational areas that you will apply the strategy and what will the the project to drive a change in the performance. This system works!
What is the down side of this method, everyone may not get to participate. But so what! Do you believe every organization does not need to improve. As an equivalency, it is no different from deciding to cut staffing or cut budgets by a flat 5% staffing cut or a 5% cut in everyone’s budget. This method penalizes the good parts of the organization and is no issue with the poorly run groups.
So the message is: To be successful in building a Project Pipeline, use the functional business performance to derive the projects and rank them by the potential gain.
There is more to it, such as using the theory of constraints to find the success constraint and work there first. Read about all of this in Volume 2 of Forrest’s Integrated Enterprise Excellence series.
Contact Us to set up a time to discuss with Forrest Breyfogle how your organization might gain much from an Integrated Enterprise Excellence (IEE) Business Process Management System Lean Six Sigma 2.0 implementation.