Six Sigma: Use the tools, don’t aim for perfection

By | March 15, 2014

Six Sigma.  You will hear about this a lot in operations consulting. It is the idea that a process is very consistent and repeatable.  Six sigma means there are only 3.4 defects per 1 million units.  Essentially, it is almost perfect.  Motorola coined the term in the 1980s and GE made it famous.

Jack Welch, ex-CEO of GE, took six sigma to a different level.  Just look at these 8,000+ six sigma related GE web pages and press releases here.  If GE makes an engine, they want it just like the one before it.  They do this by continually whittling down the things that create different outcomes until it is “six sigma” reliable.  With Six Sigma, the consultant should constantly think about reducing variability. Same. Same. Same.

Six Sigma

Variability is bad (most of the time).  The idea that processes should be consistent is not a radical or untrue notion.  If you know that something works, you should repeat it.   After all, why spend time and energy re-inventing the wheel?  Best practices are built on the idea that there are time-tested, and successful, processes that can replicated with little controversy or alteration.  This is why enterprise resource planning (ERP) exploded in the 1990’s in advance of the Y2K systems upgrades.  Companies bought into the idea that they could standardize their most routine operational and financial processes inline with what SAP, Oracle had designed for hundreds of other companies and competitors.

Checklist Manifesto

Standardization works.  One of the most famous examples of this in recently history is the adoption of the pre-flight checklists in aviation, and surgical checklists in hospitals.  Historically, pilots and surgeons were alike in that they felt like rulers of their kingdom. In a New York Times article (2006) here, a University of Texas professor was commenting on a physician’s initial resistance to standard processes, “I had one surgeon tell me that checklists are for the lame and weak.”  This attitude is changing.  Atul Guwande wrote the Checklist Manifesto (affiliate link) about how something as simple as a checklist was being used to save patient lives at John Hopkins, one of the most premiere hospitals in the world.

At a high-level it completely makes sense to standardize the boring, low value-added parts of your business.  If it is not something that actually makes you better than your competitor, why spend any time or money on it.  Generally speaking, process variability is bad.  It causes mistakes, rework, and client frustration. All waste.  TIMWOOD.

Does six sigma thinking apply to consultants?  Yes.  Do you have boring, low-value added parts of your business that need to be standardized?  If yes, then this applies to you too:  Lawyers, accountants, digital marketers. . . everyone.  By squeezing out the variability (read “craziness”) out of the process, you will be more efficient.  

Action: Brainstorm through the activities that are a part of your work day which are better when done exactly the same way every time.  Those are the things that you want to apply some angry six-sigma vigilance to.

Why are we doing that stupid thing 5 different ways?

This could be a list of simple, mundane things which waste time and lead to poor quality:

  • Different filing nomenclature, so your associates are scrambling to find things
  • Poor version control, so you don’t know what is most current version
  • Lack of templates to reinforce routine work
  • Unclear instructions to new hires of company branding and formats 
  • Inconsistent expense tracking which leads to budgeting issues
  • Irregular interview process leading to staff with inadequate skills

Limitations of six sigma.  For all the hype and uses of six sigma, it has its detractors. There are several real criticisms of six sigma including:

  • Analysis paralysis. If done poorly, or not scoped correctly, it encourages over-analysis using a host of tools to document how bad things are.  Regression models, and other statistical tools that only the geekiest of MBAs really enjoy.
  • Steady-state assumptions.  Six sigma tries to control a process that it assumes is steady.  As most disruptive thinkers will agree: we live in a non-linear world where average does not mean a lot.  Things are usually growing or shrinking.
  • Short-term focus. Six sigma is about reducing variance and getting a process under control.  Same. Same. Same.  In the competitive world we live in, “sameness” definitely provides dependability, but it is discourages breakthroughs.
  • Process dogma.  Andy Stanley – a pastor, and super leadership speaker – says in his podcast that an organization’s purpose should not change, but processes should always change.  When processes don’t change to adapt to the environment, that is bureaucracy.  Purpose should not change, processes should.

In professional services, few things are six sigma reliable.  Maybe the pressure in an oil pipeline, or the number of stitches in a pair of Gap jeans, but not professional services. We are not robots – nor should we be.  Our clients pay us to solve problems that are not easily solved by technology, outsourcing, or inaction.  

As a lawyer, if you are competing with Legalzoom, you are in trouble.  As a consultant, if you are putting together mindless powerpoint, you are in trouble: people on Fiverr will do it for only $5. We are paid to solve complex problems, not merely control a process. Reduce the variability in the boring parts of your work to allow more time, freedom, and margin to innovate and deliver real value to your clients.

All consultants use Lean and Six Sigma tools.  Bain notes that in a recent survey here that 3/4 of Six Sigma projects were unable to reach their savings targets.  By linking Lean with Six Sigma, consulting firms try to have the best of both worlds, focusing on value through simplification (Lean) and focusing on quality through repeatability (six sigma).  The real questions is whether we – as professionals serving customers – have the same diligence with our own proposal creation, and client delivery as we push our clients to take.  In other words, are we eating our own lean six sigma dog food?  Do we practice the lean six sigma that we preach to clients?

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