In a tough economy, Six Sigma Masters have to demonstrate that they’re more than unnecessary overhead, says Gene Rogers, a Continuous Improvement Program Manager at oil & gas services firm Baker Hughes, Inc. Rogers looks at how to demonstrate the value of Six Sigma in a challenging market.
In the now famous exchange from the 1996 American romantic comedy-drama Jerry Maguire, fictional American football star Rod Tidwell (played by Cuba Gooding Jr.) demands his sporting agent to demonstrate that he’s really worth paying for:
ROD TIDWELL: This is what you are going to do for me.
JERRY MAGUIRE: What can I do for you? You just tell me.
TIDWELL: Are you ready, Jerry?
MAGUIRE: I'm ready.
TIDWELL: Here it is. Show me the money. Show...me...the...money...! Say it with me, Jerry.
MAGUIRE: Show you the money.
TIDWELL: No, you can do better than that. Bob Sugar's on the other line.
MAGUIRE: Show you the money
TIDWELL: No, show me the money.
MAGUIRE: Show me the money!
MAGUIRE: Show me the money!
TIDWELL: You've got to yell that $#@% !
MAGUIRE: SHOW ME THE MONEY!
TIDWELL : Louder, Jerry.
MAGUIRE: SHOW ME THE MONEY! SHOW ME THE MONEY!
TIDWELL: Congratulations, you're still my agent.
Businesses have started to speak to its quality practitioners like Rod Tidwell: "show me the value," they demand. "Make the value shout at me! – don’t make me have to look for it."
Demonstrating business value is the critical imperative for quality practitioners in 2011. In the new economy where training, travel, discretionary spending, projects and people are being trimmed or cut altogether, many companies are backing away from quality initiatives, especially Six Sigma projects.
Why would companies do that? Aren’t Six Sigma initiatives the ones that are supposed to be saving the company money? If deep cuts are being made in your Six Sigma program, you may be wondering, "Is Six Sigma being considered overhead?"
We all say a resounding, "Of course not". We have professional societies, monthly publications, and annual awards banquets. We have an entire "Six Sigma" industry built around consultancies, conferences, and software. We have quality-related activities that keep us busy year-round!
True, true and true. However, none of that really matters if we don’t demonstrate and communicate value. In reality, the busy-ness of our quality-related activities has become a yoke around our collective Six Sigma necks. We continually pull at the business as if we are horses pulling a plow. We should be cultivating the field, not plowing it! So, how do we move from plowing to cultivating? We have to change the very nature of how we demonstrate and communicate value.
In truth, we are adding business value all the time; reducing cycle time, increasing productivity, creating new processes, analyzing data, inserting controls to sustain performance, etc. But collectively, we do a poor job of demonstrating and communicating the value to our most critical stakeholders, our executives.
Demonstrating and communicating business value is not a one-time activity. It is a combination of activities that need to be done in concert. These activities, in essence, will change the nature of your projects and the culture of your Six Sigma organization.
Begin these activities:
• Go faster. No more six-month projects.
• Communicate only in business terms. (If you don’t know the difference in OPEX and CAPEX, you have some homework to do.)
• Be proactive. Actively seek out and solve business problems that are hindering the success of the business strategy.
• Start evangelizing Six Sigma as a Service.
Start Going Faster: The typical green-belt level project is 3-6 months. Black-belt level projects average 6-18 months. Today’s economy will not wait that long for a return on investment. Projects must start delivering measureable results within 3 months, and continue to deliver results throughout the lifecycle of the project; monthly at a minimum. No more "big-bang-at-the-end" projects. Businesses conditions are changing too fast to wait until the end of the project to deliver the value.
Communicate in Business Terms: In 2011, successful Six Sigma practitioners will learn to fluently speak the native language of business. This inherently assumes stopping the use of Six Sigma-specific terms. DMAIC and COPIS are not business terms. Instead, substitute our terms-of-art with the results they bring; quicker inventory turns, better cash flow, lowering fixed costs, and increasing profit margin.
The same is true for presentations. Stop showing and discussing statistics. Business leaders don’t care about the stats. They care about what the stats represent and how they affect the operations of the business. The presentation must "stand on its own", meaning, a business leader can understand it without your commentary. Don’t use any stats that need detailed explanations.
Be careful to avoid the same mistake when presenting your findings in person. For example, don’t show a linear regression and discuss the calculations, "I used the least squares method to determine the equation using a procedure that minimized …. Blah, blah, blah". Instead, discuss the business value of your analysis. "Because there is a strong relationship between these items (whatever they are) we can reduce defects, or increase production, lower cost, etc." And remember, if and when you discuss the cost savings of a project, do not, repeat do not, discuss "Six Sigma-bucks" (soft saving that can’t be measured). If you do, proceed at your own risk.
Avoid these self-defeating activities and your value, along with the credibility of your projects, increase.
Be Proactive: Actively seek out and solve business problems that are hindering the success of the business strategy. One of best skills a Six Sigma practitioner has is the ability to solve complicated issues. Do not wait for others to come to you with project ideas. Put a business case together, include a return on investment section, and state your case. You will be surprised at the receptiveness of your leaders, especially if the issue you are solving is tied to the success of the business strategy. (As an aside, if you can’t tie a project to a critical business initiative, don’t do it.)
Use your skills to start facilitating problem solving sessions for other departments. Don’t underestimate this activity. Not only are you creating value outside of your own department, you are also creating a network that you can reach out to in a crisis. The payback from two or three successful sessions is enormous, both for helping the business succeed, and also for your credibility and value to the organization.
All of these activities are, in essence, evangelizing Six Sigma as a Service to the business. In a declining business environment anything perceived as overhead gets cut. Items considered valuable to the business do not get cut, or get cut less. So, start referring to your Six Sigma program as a business service. Demonstrate the value by providing a faster return on investment, and communicate the value in pure business terms. Doing so will change the perception that Six Sigma programs are overhead.
And if you’re in any doubt about how to proceed, perhaps it’s best to take a lesson out of the Jerry Maguire textbook:
EXECUTIVE: Are you ready?
YOU: I'm ready.
EXECUTIVE: Here it is. Show me the money. Show...me...the...money...! Say it with me.
YOU: SHOW ME THE MONEY!
EXECUTIVE: Congratulations, your project is funded!