Phase 2 Engagement (Creating Pull)

Overview

If you ask the leaders at many companies what they’ve done to make sure their improvement efforts feed into strategic priorities and contribute to key financial goals—and that these links are visible within the organization—you’ll see light bulbs going off. “We haven’t really done anything like that.”

One of the fundamental secrets of success is publicizing the link of Lean Six Sigma to business strategy because doing so…

• Gives people—especially P&L managers—a compelling personal reason to support the Lean Six Sigma initiative (the “What’s In It For Me” factor, or WIIFM)
• Removes reasons for them to actively resist Lean Six Sigma, or worse, simply comply
• Shows the link between shareholder value and Lean Six Sigma projects

Not all firms have coupled Six Sigma to strategic objectives:

Trying to survive in a market where customer needs change quickly, one company decided to use Six Sigma as part of its core business strategy. They hired a Champion who had extensive experience with Six Sigma, trained several waves of Black Belts, launched a number of critical-to-quality projects. But still the results weren’t what they hoped it would be.

Two years into the effort, they did a diagnostic review, including interviews with key decision makers throughout the organization. One of the more revealing interviews came from the VP of Product Development—a key role in this organization.

First, this VP said, he had not been invited to attend any Six Sigma training, nor had any Champions or Black Belts sought him out to understand his priorities. Second, he and his staff were keenly aware of the money and effort being devoted to the Black Belts, especially now that the company had created performance incentives based on the Black Belt’s average return per project. “Don’t these people realize that what we do here in Product Development has a much greater impact on our customers and our financials than anything the Black Belts do?,” said the VP. “Why don’t my engineers receive bonuses when they develop a really great product?”

This VP and his employees had absolutely no reason to actively support Six Sigma, and instead had grown to view it with some resentment. By ignoring the importance of their commitment and support, the organization missed a prime opportunity to capitalize on all its resources. The product development staff were very comfortable with several key pieces of Six Sigma, including the scientific method and data analysis, and could have worked well on project teams. Some also had the people skills necessary to make effective Black Belts. Getting these people involved could have been accomplished rather easily in the beginning of the deployment; now, it would take a huge amount of effort to overcome the built-up skepticism and even antagonism towards Lean Six Sigma. (This process was accelerating through use of Design for Lean Six Sigma, which will be discussed in Chapter 14.)

Like most companies, this one spent nearly all its improvement budget on the people directly involved in deployment, the newly formed cadre of Champions and Black Belts. Only a small fraction of time and effort was spent communicating with others and explaining the what, why, and “what’s in it for me” (WIIFM) to those not directly involved. This strategy essentially ignores the fact that any changes made as a result of Lean Six Sigma would have to be sustained by those who live with that job every day, and who aren’t part of the Lean Six Sigma infrastructure. A sustainable Lean Six Sigma initiative needs to engage both those directly involved and non-direct resources in the effort.

By narrowly defining who it designated as “involved” in the Lean Six Sigma initiative, the company described above limited what it could achieve—and overlooked some resources that could have made valuable contributions. Companies who follow this path often have some initial success, emanating from projects that represent low-hanging fruit or that are supported by a small but vocal minority. But results typically tail off quickly and are hard to revive.

If your P&L managers don’t identify with Lean Six Sigma, if they view it as taking away from their resources rather than adding capability and helping them be more successful in achieving their goals, as eating up vital budgetary allotments rather than investing in what will soon be significant financial payback and activities that help them achieve their goals, they will never fully support your Six Sigma efforts.

This ain’t your grandfather’s change management

Traditional approaches to introducing Lean Six Sigma or other initiatives have stressed a traditional form of “change management.” You’re supposed to identify everyone involved in or affected by an effort and classify them as a resistor or supporter, or something in-between… then come up with strategies to “overcome resistance.” The approach to change management described in these chapters is very different. While no change of any significance is going to be implemented without any resistance, you can avoid much of the resistance that occurs when changes are implemented from the top by

• Fully understanding your organization (through the readiness assessment)
• Engaging people in shaping the initiative in ways that support their personal goals (as well as those of your organization)
• Making sure Lean Six Sigma resources are devoted to priority problems
• Positioning Lean Six Sigma resources (Black Belts, etc.) as support for line management
• Recognizing that resistance to change is a way that people defend current good performance; what Lean Six Sigma offers is the opportunity for great performance
• Training all top managers, creating enthusiasm rather than compliance

The same is true at other levels of the organization. There are numerous studies showing the positive effect of employee satisfaction on both job satisfaction and retention—with the critical “by-product” being the ability to deliver recognizably superior customer service. Employees who feel ownership by being part of your Lean Six Sigma deployment will be empowered to make many other self-directed small improvements daily without making every thing a project.

Examples of Engagement Strategies

For Lean Six Sigma to become the way you do business, the majority of key influencers must truly believe Lean Six Sigma will help them in the portion of corporate strategy that they are held personally accountable for—in other words, they must have a clear answer to the WIIFM question (“what’s in it for me?”). As the companies described in Part I demonstrated, there are a lot of different ways to engage key influencers, to help them discover their own WIIFM:

• Bank One’s NEO division is using a one-year demonstration phase where internal consultants guide Focus 2.0 improvement events on target areas selected by management (see their Story in Part I). This approach puts minimal demand on employees (no prior training required) but brings substantial results. As senior VP Mike Fischbach puts it, “Nobody [was] going to pay attention until [we] had proved success with real examples, with real gains.”
• Lockheed Martin and the City of Fort Wayne are using a more traditional approach of relying on a more formal infrastructure to create engagement in their initiatives. At Lockheed Martin, the widespread leadership education has created a large group of managers who understand Lean Six Sigma and how it can be used effectively to push their agendas and make their numbers. Frontline staff in Fort Wayne are seeing how becoming educated in Lean and Six Sigma gives them more power in performing and improving their jobs and work processes. In both organizations, strong leadership at the top is key. Lockheed Martin’s Vance Coffman has not only stated but also demonstrated his support of the LM21 initiative. Fort Wayne Mayor Graham Richard is famed for practicing what he preaches; asking for data, reviewing projects, emphasizing a customer-oriented mindset, and using data-based thinking.
• Stanford Hospital and Clinics integrated improvement into their annual planning and budgeting process. Given their competitive environment, managers knew they would be given budget cuts every year—what was in it for them in participating in the process was a chance to control where those cuts occurred and even gain additional resources in key areas by making improvements in others. Key leaders also worked hard to engage others in creating a new vision for the organization.

Convincing with Evidence

Mike Fischbach of Bank One’s NEO group says, “In our group, our focus is on operational efficiency. We are striving to drive every last penny out of the unit costs that we can.

“Firsthand experience is important to us. We’re not a conceptual group that will draw conclusions based on concepts somebody puts on the table; we draw conclusions based on experience. When a question comes up, people say, ‘Do I have experience with this?’ So we must create the experience.

“For us to tell people that we’re going to send everybody through five days of training… it’s just not feasible. At least not until we’ve created momentum and people are saying ‘I want to get involved now.’ They have to recognize that they’re better off with Lean Six Sigma as part of the culture.”

What does it take to convince people to get involved? “The pilot effort is the proof of concept,” says Darryl Greene. “For example, we’ve done several projects in the areas run by Doug Hartsema (senior VP of Remittance and Information Processing), who sits on our leadership team. Whenever someone brings up the subject of Lean, he can sit there and say with confidence, ‘This stuff works, guys.’ That’s a lot more effective than just asking them to trust me.“

Education, Communication, and Involvement How to use key influencers to your advantage

Knowing who your key influencers are is a good first step, but how can you leverage their influence to build support for Lean Six Sigma? Timing is critical. You have a short window of opportunity to proactively shape people’s perceptions. If you leave communication up to word-of-mouth, you lose a once-and-for-all opportunity to shape the perception of (and ultimate outcomes of) Lean Six Sigma.

As noted in Chapter 6, you can start building key influencers’ engagement from the first interviews or other contact you have with them, if you make it clear by deed and word that Lean Six Sigma is being used to support their business goals. It will continue in how you frame required training or education for managers and other key influencers. Such training should be structured to build towards true internalization of Lean Six Sigma, not just an intellectual understanding of principles or concepts.

For senior management and other key influencers to use Lean Six Sigma as a powerful performance engine, they must be familiar with its basic precepts, tools, and requirements. Only then will they be able to effectively guide Lean Six Sigma efforts and allocate sufficient resources to guarantee a reasonable chance of success. As Lou Giuliano puts it, “If the executive team doesn’t understand the language, doesn’t understand the potential and what could happen, it doesn’t work very well.”

Hearing a presentation is a good first step if the presenter is seen as credible (such as a CEO who is actively practicing Lean Six Sigma), but a deeper understanding of what Lean Six Sigma can and cannot do is essential. Every management member also participates in a three- to four-day Lean Six Sigma training course that includes a simulation (or other “live experience” in application), and participates in chartering a project. Such an approach immerses these key influencers in project discovery and selection, and creates an emotional connection with Lean Six Sigma that will carry them far into deployment. Richard Sullivan of Xerox once said, “When I participated in the Lean Six Sigma simulation, the lights went on… I could see I could use this.”

Rules of Engagement

Much of the information throughout this book will help you truly engage key influencers (and others) in shaping and deploying Lean Six Sigma in your organization. But here are three rules of engagement to provide you with a starting point.

Rule #1 You need a clear burning platform (aka You can t ask people to commit to something whose purpose you can t explain)

Every successful deployment is based on a “burning platform,” some major challenge or risk which, if overcome, will push the organization towards greatness. One of the commonalities in the organizations profiled in this book is their clarity on why they are adopting strategies based on Lean Six Sigma principles. At the National Enterprise Operations division of Bank One, the initial directive was to bring the chaos under control. In Fort Wayne, the Mayor clearly articulated the need to use Six Sigma to support his goals of creating a safer city, a city with more good jobs, a city that provides excellent service to its citizen.

Lockheed Martin saw the need not just for a common company identity and culture (after the major defense industry consolidations) but a tool to become more competitive. At Stanford, everyone was aware of the changing environment of healthcare and the need to really push cost savings while improving patient care. Having a clear strategy that is well-communicated allows people to guide their own actions: “Will doing this support or detract from our goals?”

Above all else, the CEO and other executives must speak with one voice about the burning platform for their business. It could be a need to regain competitiveness in the market, a need to introduce new services, attract new customers, retain existing customers, or simply improve profitability.

Whatever the platform, it is often articulated in one or more 2- to 5-year goals. These goals must be specific to your company, and should be driven by your corporate value creation strategy. The issue here is to make sure that goals reflect the types of gains you need to get from your Lean Six Sigma effort—not what you can safely achieve using the same systems you have in place today. Here are some examples of typical multi-year stretch goals and financial performance:

• Improve gross margin 5–10%
• Increase ROIC by 5–15%
• Increase revenue growth to 10% per year
• Gain 4% in market share each year
• Win 12 new major clients/customers
• Increase capacity 12–18%
• Reduce the number of overhead employees by 12%
• Cut time-to-market and redesign in half
• Generate an average return of $500,000 per Black Belt per year (judged in operating profit)
• Generate 80% of our capital needs from operating profits

Once the CEO and P&L executives understand the power of Lean Six Sigma, they will be in a position to select a set of goals appropriate to the business and market conditions. The actual process of refining and achieving these goals will require the contribution of many minds, which are usually formed into a Design/Deployment Team described in Chapter 8.

Rule #2 Create a concrete picture of how people s lives will be different

One reason that people often resist change is because they can’t envision how they will operate under a new set of rules. The key influencers in an organization can help overcome this obstacle by demonstrating the new way of thinking and acting in their own professional lives. For example, Roger Hirt, the Master Black Belt with the City of Fort Wayne who “came of age” in an improvement sense while he was with GE, has noticed a big difference in how leaders act before and after their exposure to Lean Six Sigma. “Before, emotion carries a lot of weight in people’s evaluation of a situation,” he says. “They look at something, remember what happened before, and the results they got. And if it worked, once, they’ll try it again.

Building partnerships with key influencers

“Part of it is coming up with a strategic vision of a highly delivered program,” says Nick Gaich, the Vice President of Materials Management and Customer Service at Stanford Hospital and Clinics. “With the vision in front of you, it’s essential that you establish a very personal relationship with key stakeholders who (1) are receptive to the vision, and (2) help contribute to the vision by bringing their team to the table. That’s where I spent some time. It’s not so much about how things are done today, but more importantly—if you take a look at it from an optimistic perspective—what would it look like if given the opportunity to create a world class program.”

“What changes,” continues Hirt, “is that people start separating their emotional responses from what the data is telling them.” He can see a big difference in the questions that managers start asking: “Yes, I feel like that’s the right thing, but what data do we have? Is there any information that could indicate this is the correct thing to do? How are we going to measure it? What’s going to change?”

Such changes are pervasive as a manager’s mindset changes from “protect my turf” to “do everything possible to serve our customers better.” The more a manager learns about and experiences Lean Six Sigma, the more data-driven and self-confident their responses and questions become. When presented with an idea or suggestion or even complaint, the first questions out of a Lean Six Sigma manager’s mouth are usually “What do our customers say?” or “What does the data tell us?”

When faced with a new problem, they’ll delve into whether it is caused by special or common cause variation (“does the data show that something like this happens all the time, or is something special going on?”). Simply asking those questions helps managers avoid one of the most deadly of all managerial sins: overreacting to common cause variation—or “tampering” as it was called by Dr. W. Edwards Deming. Tampering usually increases variation and makes the problem worse than it was originally.

When walking through a work area, a Lean Six Sigma manager looks for evidence of process management and Lean techniques: process flowcharts, data on process speed and defects, visual management tools, and so on. As much as possible, demonstrate these skills through your own behavior, and give people a safe environment in which to practice them on their own.

Changes in the daily life of an organization

For most of its 100+ year history, Caterpillar was a very structured, very buttoned-down organization. To demonstrate that the old ways were changed, CEO Glenn Barton appeared at their Six Sigma kickoff meeting dressed in Karate uniform and accompanied by several world-class Karate experts. Geoff Turk, the 6s Corporate Deployment Champion, describes a host of other changes: “We’ve got Black Belts talking to the CEO about their storyboards. We’ve got line managers who had built a facade over the years of ‘I don’t make mistakes’ who are now open to discuss the data and facts about how things could really be better. The interaction of people, the common language, removing the emotion, basing most decisions on data and facts—all of this has done wonderful things for the development of our people.”

Rule #3 Change your management meeting agendas

There’s another truism of business that has a big influence on whether your Lean Six Sigma initiative will be successful: what gets covered in management meetings gets paid attention to. Take a look at your management team agendas. If Lean Six Sigma projects and results aren’t a big part of those agendas, then either you’ve got the wrong agendas or the wrong focus for Lean Six Sigma.

Mayor Richard of Fort Wayne carves out time on his agenda to meet with project team leaders. Manny Zulueta, Vice President of Lockheed Martin’s MAC-MAR procurement operations, has a standing, weekly one-hour staff meeting dedicated to Lean Six Sigma for team reviews, project completion status, and re-alignment planning. You can bet that people in these organizations view Lean Six Sigma (or their version of it) as important to their personal success.

Placing Lean Six Sigma work front-and-center in management’s eyes is a way to increase visibility of the effort and reinforce to all the key influencers how important it is.

Conclusion Starting off on the right foot

Lean Six Sigma will reach its full potential only when all key influencers (and eventually the rest of the organization) view Lean Six Sigma as a vehicle for them to achieve personal success in their roles. But, as human beings, we tend not to change entrenched patterns of behavior unless we see that where we’re standing right now is going to get a lot more uncomfortable than where we’ll be if we change. The purpose of engagement is to help make it easier for people to change than to stay the same, to generate support by finding ways to make sure Lean Six Sigma is seen as an asset—that is what’s going to create the pull. As Lou Giuliano says, “I spent a lot of time and energy trying to convince people this wasn’t just some Machiavellian trick to try to cheat everybody out of their bonus, and that this really was a serious effort to try to change the way we do things, and if we were successful we’d all have higher bonuses.” And that is what happened.