What is Six Sigma?

What is Six Sigma?

Six Sigma is a quality program that, when all is said and done, improves your customers’ experience, lowers your costs, and builds better leaders. – Jack Welch¹

Definition

Developed by Motorola, Six Sigma became popular when it was successfully adopted by GE in 1995.  Jack Welch’s definition is profound, because even though he uses the unexciting term “program,” he juxtaposes that term next to benefits that differentiate Six Sigma from ordinary, run-of-the-mill programs.  Furthermore, he rightfully refrains from calling Six Sigma a strategy.  Indeed, a strategy can be defined as a “set of rules the firm follows to be able to deliver on its mission and should be geared to maximizing returns to shareholders.”² Strategies are typically unique, and difficult to copy.  Six Sigma, on the other hand, is easily replicated.  Six Sigma belongs in the realm of “Operational Excellence.”  In an increasingly competitive business landscape (some have even called it hyper-competitive³), Operational Excellence plays more and more of a “permission to play” role, rather than an opportunity for differentiation. Indeed, “the process of competition forces firms to offer a line of high-quality, low-priced goods that eventually make high quality and lower prices a necessity for survival.”³ Six Sigma is ideally suited to help firms meet that end.

So, what is my definition of Six Sigma? Six Sigma is a problem solving methodology that rigorously aims to identify problems, and to solve them, once and for all, in a way that delights your customer. Delighting the customer enables Deming’s chain reaction to unfold and results in increased profitability for the firm.

Six Sigma and Culture

We’ve already mentioned that the concept is easily copied; however, Six Sigma has the uncanny tendency to take on the attributes of the culture in which it is deployed.  As such, it is critical to identify areas where a firm’s culture and Six Sigma may appear to be in conflict, and to address these from the get-go.  In a culture that values creativity and individuality, the structure that Six Sigma brings, if not properly framed, could lead to an ultimate failure of the methodology.  But it does not have to be that way…  3M is often considered as one of the world’s most innovative company, and it has successfully been developing and leveraging its Lean Six Sigma capabilities since its initial deployment in 2001.  “Today, Lean Six Sigma is routinely used in 3M globally as a natural part of the way we do business. We use the tools and methodologies to systematically respond to customer needs, launch new products through perpetual innovation, streamline our manufacturing and supply chain processes, create speed and eliminate waste, drive overall operational excellence, and help enhance our financial performance and yours.”⁴ On the other hand, when a firm’s culture is founded on Deming’s philosophy, it is driven by a “constancy of purpose towards continuous improvement,”⁵ and Six Sigma finds itself in an environment where it can thrive.  The main point here is that it is dangerous to ignore the cultural element in a Six Sigma deployment.  A firm’s culture can and must be deliberately created to enable the stakeholders’ vision.

 

References

1.     J. Welch, “Winning,” HarperCollins Books, 1^st Ed., 2005

2.     M.C. Scott, “Value Drivers,” Wiley, 1998

3.     R.A. D’Aveni, “Hypercompetitive Rivalries,” Free Press, 1995

4.     3M Lean Six Sigma, “Building Value for Our Customers,” 3M Center, 2007

5.     W.E. Deming, “Out of the Crisis,” MIT Center for Advanced Engineering Study, 1982