New philosopy can eliminate mistakes, waste and rework

It is not the magic bullet, but a US strategy claims to improve both top and
bottom lines of a business.  By Dr James
B Rieley

Running a company today is much like driving a car on a foggy night on a
winding road through the woods at high speed. Quite often, business leaders and
HR practitioners struggle to keep their car on the road. To make better
decisions, they look for "magic bullets" – management practises or
methodologies – that will ensure their organisation can survive.

As leaders constantly look for the "latest thing" in prioritising
decisions, "buzz-words" become attached to the decision-making
process. Some of these refer to a way to look at business philosophy. One of
these is called "Six Sigma", which focuses on eliminating mistakes,
waste and rework.

Six Sigma is not a magic bullet and is not even that new. The author is
based in Michigan, USA and the philosophy has been picked up by many of the
Fortune 500 companies, including General Electric CEO Jack Welch. It claims it
carries on from TQM and ISO 9000 "with a powerful philosophy for the new
economy".

It does have a certain sense of mysticism about it, but it will not cure all
of an organisation’s ills. It is hard work and requires a business discipline
that few organisations have today. But it can enable an organisation to do
several things.

When implemented effectively and appropriately, Six Sygma can improve both
the bottom and top lines of a business. An organisation can reduce the time and
resources that are deployed in manufacturing and service rework. Rework,
whether it is in a manufacturing process or in a service-based decision
process, is a major problem in that it wastes valuable time and resources that
could be applied to moving an organisation forward to achieve its goals.

The philosophy can help to instil a level of discipline in the
decision-making process in an organisation as it forces decision-makers to
examine how they make their decisions. The pay-off is excellent, both in the
short-term and the long-term. There is increased employee satisfaction (they
clearly understand the decision process and can see that their efforts are not
in vain) and customer satisfaction (they understand the meaning of having their
needs met – the first time).

Supporters of the philosophy claim that it enables an organisation to
differentiate itself from its competition in both emotional and effectiveness
areas. As competition in all industries and sectors is constantly increasing,
either in real or perceived terms, the ability to increase effectiveness, while
at the same time reducing costs, is a real differentiator in any marketplace.
Being able to differentiate an organisation, especially in today’s business
world, can quite often make the difference between being good or being the
best.

Six Sigma can help to ensure that an organisation can realise its potential
to be sustainable over time. As organisations who have embarked on this route
have found, the management philosophy instils in an organisation a common
language that helps to ensure that there is a solid understanding of what is
truly important in the company. Additionally, it can have a major impact on an
organisational culture and instil a feeling of cohesiveness in "why"
an organisation has embarked on the road it has.

This latest management philosophy requires commitment and high levels of
training in both the philosophy and the methods. And it requires a strong
vision of what an organisation can be.

It is not the magic bullet, but it can enable senior business leaders to
keep the car on the road and help the drivers to see through the fog, in the
dark, around the curves.

Dr James B. Rieley is the vice president for leadership development with
Celerant Consulting and author of Gaming the System.
The power of Six Sigma by Subir Chowdhury is published by Financial Times
Prentice Hall, £12.99

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