Book Review: The New Six Sigma


April 2004

Book Review: The New Six Sigma

CIDMIconNewsletter Jennifer Linton, Consultant, Comtech Services, Inc.

“Continuous improvement requires continuous change, which in turn requires continuous learning.”
– Ed Bales
(The New Six Sigma introduction)

In The New Six Sigma, Matt Barney and Tom McCarty present an energetic, company-wide approach for managers and employees to achieve Six Sigma standards throughout their company. However, for this approach to be successful, it must be accepted by the entire organization and used consistently by all employees. Not only is the book a succinct guide to an improved view of Six Sigma, it presents innovative approaches to problems without using statistics.

Although Six Sigma methodology has been used successfully by a number of companies, until now, many organizations have found it difficult to use. The emphasis on statistics is a complication companies face when they integrate the traditional Six Sigma methodology into the everyday work environment. The New Six Sigma uses Six Sigma principles without the emphasis on statistics, thus allowing managers and employees to focus more on “strategy execution and value creation” than on the defects per opportunity.

Another factor that usually deters companies from working with the Six Sigma methodology is that it has typically been applied in a manufacturing context. The New Six Sigma describes the opportunities to incorporate Six Sigma in all parts of a company. Other negative factors that companies often mention when using the old Six Sigma are that Six Sigma projects continue for months with no clear gains, add to employee overhead, primarily focus on cost reduction, and require heavy investment with no clear line of sight to a return on investment. Solutions to all of these issues are also clarified throughout the book. McCarty mentions (pages 10-11) that, “the old Six Sigma was just a standard measure of goodness,” while “the new Six Sigma is an overall business improvement method.”

The New Six Sigma begins by giving in-depth background and listing key contributors to the development of Six Sigma. Motorola initiated Six Sigma to gain control of four major corporate aspects:

  • global competitiveness
  • participative management (Total Quality Management)
  • quality improvements
  • education

What company doesn’t want to have best practices in these categories throughout its organization? To achieve these goals, Motorola decided that all who impacted or were impacted by the development of new products and services needed to be involved in the Six Sigma approach, thus creating a consistent work environment that many companies lack today. Since Motorola began using Six Sigma, many companies, including General Electric, have adopted the methodology and made modifications to improve it. This book demonstrates how even after these modifications, Six Sigma can be improved and manipulated to meet every department’s goals.

The new Six Sigma is based around four leadership principles:

  • Alignment-using the scorecard process as a framework; creating relevant, line-of-sight improvement targets; creating stretch goals; and using appropriate measures.
  • Mobilization-using empowered teams and a focused project management methodology, and equipping the organization to enable people to take action.
  • Acceleration-bridging the gap between learning and doing, providing coaching/application support, and using campaign planning and clock management.
  • Governance-creating leadership team roles and responsibilities focused on selecting, managing, reviewing, and driving the completion of projects; including visible sponsorship; requiring rigorous review of projects; and supporting ongoing knowledge sharing and proactive communications.

Each of the principles is illustrated in a case study that includes examples of what the new Six Sigma method entails. Managers can use these principles to improve their product quality, department-to-department collaboration, and customer satisfaction, as well as to address a number of other key components necessary to effectively build a successful corporation.

For this specific case study, Barney and McCarty used the following structure. However, departments and companies can easily customize this structure to fit their own situations. The main idea is to implement the structure consistently throughout the groups.

Hear the voice of the customer

Develop a set of prioritized statements that accurately reflect customers’ expectations. Talk to your customers to test and validate these expectations, and then convert the expectations into requirements that you can measure. Finally, communicate the customer statements throughout your organization so that employees’ thoughts and actions are guided by the voice of the customer.

Develop a Mission Statement

Use a series of questions to gain clarity about your mission:

  • Who do we serve?
  • What services do we provide?
  • What is our unique competitive advantage?

Once you’ve developed a mission statement, use it to maintain your focus on key activities and communicate a consistent message to employees.

Determine Your Strategic Objectives

Develop a common set of objectives. To do so, identify the key business objectives your organization must achieve in the next three to five years. Ensure that individual and department-level goals flow from this common set of objectives.

Conduct a Situation Analysis

Analyze your business environment. The analysis should include several aspects of your environment, for example:

  • customer
  • internal
  • suppliers
  • competitors

Use the analysis to reach a common understanding of your company’s current situation and to build consensus about areas needing improvement.

Conduct a SWOT Analysis of the Company or Group

To complete your understanding of your company’s current situation, conduct a SWOT analysis (strengths, weaknesses, opportunities, and threats). For example, as the result of conducting a SWOT analysis, you may gain insight about your company’s vulnerability to emerging competition.

Develop Your Organizational Dashboard

Create a set of key metrics for accountability and behavior that improves business results. This set of metrics, or dashboard, identifies performance goals in such areas as internal business, customer and market, financial, and learning and growth.

Determine a List of Performance Drivers

Using the areas identified in the organizational dashboard (internal business, customer and market, financial, and learning and growth), identify the performance drivers-any process, system, or activity that causes each key metric to increase or decrease-for each area.

Conduct a Performance Driver Analysis

To maintain focus and identify which performance drivers are likely to have the greatest impact on the key metrics, analyze and prioritize your list of performance drivers if necessary. Doing so can help you decide which actions to pursue to achieve rapid improvement.

Once the study and consolidation of ideas are clearly determined through this structure, then project charters can be developed for each of the components that the group determines are critical to quality. These charters give teams clear targets for finishing the project, such as objectives, deliverables, metrics, and timelines. The charters also list who needs to be trained and what level of training they will participate in.

The last step in the new Six Sigma is to develop the “Business Unit Scorecard,” which consolidates all of the previous ideas and discussions into a one-page deliverable that can be distributed company-wide for everyone’s information. The scorecard contains two components:

  • Strategic Direction-strategies and objectives (“vision”), the current year initiatives, and the strategic objectives.
  • Performance Measurement-key projects and business results.

Using the new Six Sigma is primarily a matter of creating a team of employees with diverse experience to determine key improvement opportunities for the company and then putting into place an action map for the rest of the company to follow.

The New Six Sigma is not just for managers; the book presents much information that is beneficial to any person in any business because it is focused on customers.

Perhaps the most interesting part of the book is the final chapter that discusses the “future” of Six Sigma. Barney and McCarty begin by discussing how Motorola is using Six Sigma to identify leadership, innovation, and creativity among employees. Motorola decided (page 55) that this was a key concern to their future success because “a leadership shortfall

[due to shortage of employees who show potential] could cost a business as much as 10 percent return on the cost of capital employed.” Motorola started off by determining a common language to classify qualities of true leadership for their company. These qualities are the 4e’s, “FeNVISION, eNERGIZE, eDGE, eXECUTE, and eTHICS” (page 59). Based on these qualities, Motorola may implement a plan to hire new employees or promote existing employees who could eventually take leadership and management positions.

More examples of future Six Sigma uses include helping executives manage risk and improve shareholder returns, regain Wall Street’s trust through honest financial reporting, perform information integrity tests, and predict good performance and ethical behaviors in their employees. The New Six Sigma provides a business approach that will benefit everyone involved in a company, whether they are the CEO, department manager, project manager, customer, or third-party auditor. CIDMIconNewsletter

About the Author

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Jennifer Linton
Comtech Services, Inc.

Jen has a degree in Biomedical Engineering from Marquette University in Wisconsin. She earned a green belt in Six Sigma while working at General Electric Medical Systems. With Comtech, Jen consults in process improvement, Web design, and content management.