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Conclusion

The people who have contributed to this book all use terms like “significant” or “huge” or “substantial” to describe the amount of work needed to successfully mobilize resources throughout their organizations. In short, it’s hard work. And the impact of the decisions described in this chapter, and all of those we didn’t have space to address, are truly important—meaning the choices you make have a significant impact on whether Lean Six Sigma becomes THE best way for your employees to achieve their business goals or whether it will be here-and-gone like so many of its predecessors.

“The biggest single difference in this part of the journey from all the other continuous improvement efforts that I’ve made is having dedicated resources.”

—Lou Giuliano, CEO, ITT

The main weakness in those predecessors, as Giuliano indicates, was that they lacked infrastructure. There was no way to coordinate the results of diverse projects, to standardize methodologies in order to accelerate learning and improvement, to compare value-creation potential across diverse sections of your organization. Few people worked on improvement full-time , and any efforts were diluted by the everyday pressures to get the job done. (This is why we express caution in relation to part-time Black Belts.)

The good news is that you don’t have to invent the infrastructure wheel. There are hundreds of companies out there deploying Six Sigma or Lean Six Sigma, some of which are likely similar to yours, and all of which you can learn from. Use their lessons—whether they’ve succeeded or failed—to better inform your own decisions and jump start your own learning curve.

Chapter 9: Phase 4—Performance and Control

Overview

You’ve identified, selected, and trained Champions and Black Belts. You’ve communicated with the organization about what Lean Six Sigma is and how it will be used strategically. You’ve developed project charters and sent teams off on their journeys. What comes next ? Let’s hear again from Lou Giuliano, someone quoted often in this part of the book because he has such excellent advice:

What it takes is constant attention . Every time I visit units we talk about this, in our business reviews we talk about these efforts. I go to the training classes, I go to the Best Practices symposiums, and I get other people talking about it.… You’ve got to have some other people in the organization who can pay attention to what’s really happening, figuring out who’s getting it and who’s not getting it, figuring out who’s backsliding and deciding, ‘Well, I’ll send people to training but I won’t let them work full-time ,’ and go out and confront those issues and get the process working.

—Lou Giuliano, CEO, ITT

That’s what this chapter is about: how you pay attention to your Lean Six Sigma deployment, and what you should be paying attention to.

Planning Ahead: What will happen when you start getting results?

Throughout this book, we’ve said that even though Lean means “cutting costs,” you shouldn’t equate that with “cutting people,” though there have been some companies who have had to use it for that purpose. To truly get to excellence, you have to capture the hearts and minds of every employee, as well as their hands. If you have to lay off people, do it before Lean Six Sigma is deployed. People will have to work harder and longer to compensate for the staff reductions, but finding they can often cut out 20–40% of their work (the non-value-add portion) is a great incentive for adopting Lean Six Sigma.

This issue is just one of several that can appear once your Lean Six Sigma is up and running, but that can be prevented or minimized by up-front planning. Let’s look at:

How to adjust to requiring less time to do the work (and perhaps fewer people)
What to do about rotating Black Belts into management positions

Issue 1: What happens when you can do the same work in less time?

“You have to be careful because a lot of companies use value-added analysis as a rationale for laying people off,” says Mike Joyce of Lockheed Martin. “There are two sensibilities here. The first one is that is just pure business, and I think most people understand capitalism . If there is no business out there, I’ve got to shrink. It has nothing to do with the work we do or how we do it, or the people or how good or bad they are. It’s just the reality that this market is nonexistent anymore at the size that we need it. So if it’s a market-driven thing, then yes, you’ve got to lay people off to survive.

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“But that’s a completely separate issue from ‘I need people to help me get better,’” says Joyce. “The more distance you can put between those two realities, the better off you are. At Lockheed, we said, look, LM21 is definitely going to change the distribution of work and where people get deployed. It’s going to happen, especially in areas like materials management, where we know our stockrooms are targets for eliminating idle inventory… we’re going to have people that can be redeployed. The key is that we know this a year in advance of its happening. So it’s management’s job to decide how we are going to redeploy those people, and what we have to do to get them ready for redeployment.”

A similar issue was faced at Stanford Hospital and Clinics, though in the early years , says Karen Rago, she was more concerned about getting enough staff to provide good care for Stanford’s patients . She’d spend her evenings and weekends making emergency calls to staff trying to get them to work even more overtime. But then the improvement efforts starting paying off… and many areas were wildly successful in reducing the hours of care. Unfortunately, that happened at a time when patient loads were dropping, so she suddenly found herself overstaffed—and Rago was now making calls telling people to stay home. Fortunately, at that time she had enough staff who didn’t mind losing the hours so she could let attrition take care of reducing the workforce without needing to lay off anyone . In fact, throughout her more than two decades at Stanford, there were very few layoffs thanks to proactive planning and attrition.

In other organizations, people freed up are used on teams to produce further improvements. Often, when demand outstrips available resources, the new improved processes are able to deliver more revenue with the same cost, but with much greater efficiency combined with greater job satisfaction. Where headcount reductions are unavoidable, careful upfront planning and instituting early retirement programs can be used to address these reductions.

Issue 2: Can you really rotate Black Belts into management positions?

One tradition associated with Lean Six Sigma is that the people chosen to be Black Belts are being groomed to segue into leadership positions after two or three years. The question you have to ask yourself is whether you can afford to make that promise to people.

The answer is yes. Caterpillar, for instance, went through a down cycle that started in the late 1980s and continued for six or seven years, where they simply didn’t hire many new people. To them, using Lean Six Sigma experience as a way to quickly raise the professional skills of highly qualified people is a godsend that will allow them to more easily fill leadership vacancies that will open in the coming years. The Lockheed Martin SMEs (subject matter experts) are in a similar position: their intensive experience with Lean Six Sigma is viewed as an asset, and they are, indeed, being rotated into managerial positions. Experience has shown that the major problem is that Black Belts are promoted into management positions before their two-year assignment is completed.