Merging Past and Present
With Neil DeCarlo
Quite understandably, the rise of Six Sigma has caused some serious consternation among old-school quality management professionals. Having received their values and training from the likes of Dr. Deming and Dr. Juran, and having obtained such professional designations as “certified quality engineer” (CQE) from the American Society of Quality (ASQ), these groups and individuals are historically and operationally vested in the principles and practices of Total Quality Management (TQM).
In their dedication to the religion of quality, and in their zeal for preserving it, many have made the claim that Six Sigma is nothing more than repackaged TQM. While so many of these individuals prophetically speak the language of Six Sigma, so as to project an air of contemporary thinking, their actions do not stray far from the philosophical boundaries of TQM – in spite of the overwhelming body of evidence that now stands as a testament to the business success of Six Sigma.
Many practitioners of Six Sigma emphatically acknowledge that, in many ways, Six Sigma looks, feels and smells like TQM. In fact, it is conceivable that about 80 percent of Six Sigma could be overlaid on TQM (fully or partially), and you couldn’t tell the difference. What we are concerned with, however, is the 20 percent of Six Sigma that cannot be superimposed on TQM. It is in this portion of the larger field of quality that we can clearly see the reason Six Sigma is a business powerhouse compared with TQM.
Yet many quality professionals tend to ignore this 20 percent because they are highly vested in the puritanical practice of TQM. They think of Six Sigma as a simple linear extension of the past, only because they have not immersed themselves in or practiced the other 20 percent. But when we examine the points where TQM and Six Sigma diverge, we realize Six Sigma is not a logical extension of TQM; we realize that Six Sigma truly is a discontinuous break from the past in terms of both quality management and business leadership.
If one was to carefully define certain criteria of a highly restrictive but yet comparative nature, even an antique Model T Ford could sustain an equal footing when compared to a modern day Ferrari. Under such comparative circumstances, any set of observed differences will look minor and insignificant when, in reality, those seemingly small variations would account for huge differences in performance. So it goes when TQM is compared to Six Sigma. When the basis of comparison is defined by ASQ, there is little doubt that the observed gaps will be declared insignificant. Quite naturally, this leads us to the contrived conclusion that Six Sigma is merely TQM in a new set of clothes.
Andrea Gabor wrote in her book, The Man Who Discovered Qualify, that “Deming’s modest goal in formulating his well-known Fourteen Points was to create the management equivalent of the Ten Commandments.” (Gabor, 1990) For those who espouse and practice Deming-like quality management, the fourteen points are their bible, and they adhere to the scripture with zealot-like fervor.
Gabor explains the fourteen points like this in her book: “They [fourteen points] do, in fact, crystallize the key quality management practices that have come to be accepted at most high-quality companies in the United States and Japan. None of the commandments stands on its own. Each is part of a holistic guide to building customer awareness, to reducing variation, and to nurturing constant change and improvement throughout a corporation.” (Gabor, 1990)
When Dr. Harry engages with a global corporation, he never fails to insist that, as a general rule, the current quality professionals must not be recruited for positions of leadership in the context of a Six Sigma thrust. Taken together, the under girding principles of TQM introduce the unnecessary risk of watering down the power of Six Sigma. While the whole of TQM was about quality management, defect reduction and continuous improvement, the whole of Six Sigma is about business management, value creation and breakthrough improvement – to the concurrent benefit of the customer and the provider.
Today, far too many quality professionals wave the flag of Customer Satisfaction and largely disregard the banner called Provider Prosperity. When placed in a corporate profit-and-loss role, the typical quality professional tries to practice what they have historically preached. In short, they often tend to reinforce the business of quality rather than improving the quality of business – a big distinction indeed.
Perhaps it was said best by GE’s Six Sigma champion and CIO Gary Reiner, when he was quoted in a Report on Business article. “TQM sounds like fluff and we had seen lots of companies pursue TQM and get nowhere,” he said. “Six Sigma is attractive because you know whether you are making progress or not. It isn’t anecdotal. It is quantitative.” (Walmsley, 1997)
Nevertheless, Dr. Harry readily acknowledges the many areas in which TQM and Six Sigma overlap. He himself has been greatly influenced by the teachings of Dr. Deming. But while Six Sigma is a natural extension of TQM in some aspects; it is a distinct re-vectoring of the past in others.
Stripped down, Dr. Harry thinks of Six Sigma as “business management on steroids.” The standard quality thinking and practice that dominated the seventies and eighties was not an evil poison; it was a major step in the right direction of getting corporate America to own its terrible cost of poor quality. In the third millennium, however, we have moved far beyond the notion of defects and the cost of poor quality.
The critical difference between Deming’s 14 points (TQM) and Six Sigma is that TQM is espoused and encouraged at the global level of a corporation but most often practiced and reported only at the local level. Six Sigma, on the other hand, is espoused, deployed and implemented at the global and local levels, but it is unambiguously driven and controlled from the top. As well, Six Sigma is relentlessly practiced in a consistent and coordinated fashion such that there is no disconnect between local process and operational goals and global business aims. This is why Six Sigma drives to the control function of a corporation and produces measurable results: because it is lead and managed in a disciplined, methodological, top-down driven, bottom-up reporting way.
In this sense, Six Sigma has moved the business world into an era that can be characterized as the quality of business. In today’s climate – 50 years removed from when Dr. Deming presented the first version of his 14 points (fewer at the time) – the world is most definitely a different place. Technology, organizations and, most importantly, values have changed. Yet some still look into the past, into the business of quality, to find the future.
Deming’s Points and Harry’s Thoughts
If you are concerned with the business of quality, you need only to focus on Dr. Deming’s 14 points, if you are concerned with the quality of business, you will focus on the precepts of breakthrough in the context of Six Sigma. It’s about as simple as that. Yet the temptation to address Dr. Deming’s points is great, because in scrutinizing them we gain visibility into which ones are consistent with Six Sigma and which ones are not.
For this reason, it should be helpful to run through Dr. Deming’s 14 points, sharing Dr. Harry’s view of each. By doing so, we will form a clearer picture of how TQM and Six Sigma are alike, and how they are different. We will, in other words, sift through Deming’s points to determine which ones should be revered and which ones should no longer be considered. ( Messina, 1987) (Deming, 1986)
1. Create constancy of purpose toward improvement of product and service, with the aim to become competitive and to stay in business and to provide jobs.
Dr. Harry: Nobody can argue with constancy of purpose when it comes to making improvement, depending upon the focus and locus of the prerequisite changes. However, an organization should seek more than just simple improvement – they should strive for constancy of breakthrough. For example, an enterprise should continually seek to minimize transformational cost – in a quantum way, every day.
To focus on the continual quantum reduction of transactional cost means that, sooner or later, an organization will be forced to make substantive quality improvements. When this happens, the idea of quality becomes a business issue. Without such an overarching goal, quality is often practiced merely for the namesake of quality. It is my opinion that quality should be pulled into an organization by virtue of business need rather than pushed in by individuals touting an agenda of continual improvement. Lets face it, the contents of a business dictionary can be eloquently summarized – money and time.
From this perspective, the super-ordinate goal of a business enterprise is to provide more money for shareholders in the form of dividends and stock appreciation. If a company is run well, with a constancy of purpose related to the continual, rapid minimization of transformational cost, then it will be super-competitive and will provide a multitude of returns, including but not limited to additional shareholder value. Just becoming more competitive and striving to simply stay in business is too low an aim – right target, wrong sighting point. Such a goal is at the bottom of Maslow’s hierarchy, analogously speaking. Merely staying competitive is to run with the pack, so to speak.
Corporations must embody stretch goals with a vision of the seemingly impossible, not the type of goals that support lackluster progress or appear “realistic.” A business enterprise should be more than simply “competitive.” It is my personal belief that if you are going to do something (like business), then be the best – strive to become world-class as quickly as your inventiveness, ingenuity, and adaptability will allow. Don’t just push the envelope – create a new one. Don’t just improve to the point of being competitive; go beyond competitiveness into the domain of best-in-class.
A corporation is much like a piece of farm equipment. If that equipment is designed to harvest wheat, where the wheat is cash, then we service the machine because we want it to run as effectively, efficiently and long as possible during the phases of planting and harvesting. A byproduct of all this is the economic resources for planting new seeds of technology, of new jobs for the future. But we must always remain short-term focused with a long-term aim if we are to achieve such a vision. Look at the wheat in front of you today, get it into the wagon, then get it to market as quickly and efficiently as possible so you can “put the money in the bank.” Only when you have money in the bank can you purchase seeds to sow the next year’s crop. Worry about next year’s harvest while you’re concurrently harvesting what is in front of you right now. It’s a parallel and concurrent path.
It is interesting to note that different versions of Dr. Deming’s 14 points are published in various books. While all are similar in their wording, there are some subtle but yet potentially significant differences. As well, the order in which his 14 points are presented varies from publication to publication. We have extracted the points as they appear in Statistical Quality Control for Manufacturing Managers, a 1987 book written by William S. Messina and published by John Wiley & Sons. Also, Dr. Deming’s 14 points were published in Out of the Crisis, written by W- Edwards Deming and published by MIT, Center for Advanced Engineering Study, 1986.
2. Adopt the new philosophy. We are in a new economic age. Western management must awaken to the challenge, must learn their responsibilities, and take on leadership of change.
Dr. Harry: When Dr. Deming said this, what was the new philosophy? Was he alluding to TQM or its antecedents? And at that time TQM was narrowly focused on product quality. When you looked at TQM as an initiative, it had no hard hooks upon which to hang business initiatives or specific imperatives. TQM was an end-all, do-all, be-all set of principles. TQM had no practical way of being operationalized – no targets, goals, roadmap, or system.
In this sense, TQM did not (and does not) serve as a guide to business improvement – it only stood (and stands) as a testament of what “ought to be,” much like a set of religious proverbs that promote a higher quality of life. TQM is not inherently dynamic or expandable from an organizational, time or evolutionary point of view. It does not spell out how to achieve synergy with other initiatives, or how it can be transformed into a business tool. In and of itself, TQM is not capable of being transformed into a system of business management. To this end, explicit roadmaps or assembly diagrams are nonexistent – even after decades of trial-and-error implementation efforts.
I do agree that we are in a new economic age, more true now than in Deming’s time. But now, world management must awaken to the new global challenge, and fully close the door on Western-style quality management. Today we recognize the global economy and its interdependencies. And the new challenge is to achieve quantum change in short periods of time. We have to awaken to the challenge of breakthrough, not continuous improvement or slow, gradual change. And breakthrough is no longer limited to just products and services. The horizon has expanded to include such things as events, transactions, and activities, just to mention a few.
The goal of breakthrough should drive the way we do everything in legal, finance, marketing and so on. Furthermore, it’s not just management that needs to awaken. It’s shareholders, workers –everyone needs to awaken to the challenge presented and opportunity provided by Six Sigma. In short, Six Sigma is to a business as the jet engine was to aviation.
As for learning responsibilities, this is always true. But this assumes that management knows what their responsibilities are. This may sound insane, but there are many executives that secretly hold uncertainty about their roles and responsibilities. With the neck-breaking pace of change in today’s business environment, many executives become lost in their own myriad of corporate initiatives and imperatives. Corporate initiatives appear and disappear virtually overnight.
Independently, each initiative usually makes perfect business sense (at the conceptual level); and is most often founded upon some set of specific operational needs. Yet when these improvement imperatives are deployed and inevitably commingled with other such initiatives over time (in the namesake of operational efficiency), the interactive effect often results in competing goals, turf wars, and operational sub-optimization. Without saying, this eventually leads to the modification, downsizing, or abandonment of at least one of the entangled initiatives. In such cases, it is discovered (after the fact) that the whole is less than the sum of its parts – inverse synergy. Of course, this necessitates corrective action of an executive nature; thereby resulting in yet another cycle of reactionary changes within the organization. After a few cycles of such change, the leadership roles and responsibilities becomes obscured – to those that must lead, their management, and the organization at large.
Perhaps now is the time to define new corporate roles and values. Classic or historically important responsibilities support the old structure, along with its aims, standards, systems, processes and methods. The same question invariably produces the same response. To change the response is to change the question. As questions change, responsibilities change. There are new responsibilities continually emerging and Six Sigma takes root and works its magic.
I certainly agree that we must take on leadership of change, but not just of change. We must also lead renewal. It is true that a corporation can implement Six Sigma and get big benefits in the short-term. But on the other side of the horizon is a different landscape – the long-term. Sooner or later you have to renew your effort. You have to renew your constancy of purpose, and renew your philosophy. And you must have initiatives that are dynamic and modular, not static and disconnected from the demands of business. You must have initiatives that are scaleable over the long haul. Only then can constancy of purpose be realized from an operational point-of-view. Only then can an organization develop a constancy of message.
3. Cease dependence on mass inspection to achieve quality. Eliminate the need for inspection on a mass basis by building quality into the product in the first place.
Dr. Harry: I totally agree that we must eliminate the need for inspection on a mass basis by building quality into the product in the first place, but I don’t read anywhere in Deming’s work a strong methodology for how to do this. As a matter of semantics, I don’t think you really “build quality in.” Rather, quality must be “designed in.” This is what design for Six Sigma ( DFSS) is all about. And it is not just about designing a product. It is about designing a process, a service, a system, a transaction, an operation, a business. The idea of quality must be pervasive in everything we do to fulfill customer needs and increase shareholder value, and the only way to make it pervasive is to design it in.
4. End the practice of awarding business on the price tag. Instead, minimize total cost. Move toward a single supplier for any one item, on a long-term relationship of loyalty and trust.
Dr. Harry: In principle, I would agree with the idea of not awarding business on price tag alone. You have to keep other metrics in mind. How is the quality? Does the supplier have sufficient capacity? Does the supplier deliver on time? It is the total cost between the supplier and the provider (company) that should be of utmost concern – not the initial price tag.
Now among those who do Six Sigma, it has been discovered that the lowest-cost producer is always the highest-quality producer – simply because it takes resources to detect, analyze, and fix defects. If an organization does not produce defects, then its cost-of-poor-quality (COPQ) should be zero. So I would strongly agree with Dr. Deming that the focus should be on total cost – specifically, the minimization of transactional cost. With a better cost structure, a corporation can then enjoy the advantage of more pricing power. But this only applies in Six Sigma corporations – not in those that practice quality for quality’s sake.
As far as loyalty and trust are concerned, I do not believe in developing long-term relationships with single suppliers. I simply move toward any supplier that can give me the highest quality at the lowest possible cost on time, at any time. Trust is the active commission or omission of information. That’s why contracts were made – to plug these holes. I used to say that I trusted my company two weeks at a time – paycheck to paycheck. If I can continuously provide increasing value through my work, and my company continuously rewards me, we will have a long-term relationship; otherwise, the relationship will come to a screeching halt. To me, the same principle should be applied to the supplier base of a corporation – pay for performance.
As for awarding business based on a long-term relationship, I can’t buy into that. If I can purchase a part at a lower cost and a higher level of quality, more dependency, I don’t care if I’ve had a supplier for 50 years – they become a footnote in history. Business is about making money, not holding sanctified, longitudinal relationships. A business relationship is not like a marriage. Nowhere on any purchase order, request for proposal or business contract have I ever read the words, “for better or for worse, for richer or poorer, in sickness and in health, I will keep thee.”
5. Improve constantly and forever the system of production and service, to improve quality and productivity, and thus constantly decrease costs.
Dr. Harry: I can’t argue with that – but I would focus on the systems of business, not just those of “production and service.” Through a business focus, we are forced to also improve such items as capacity and capital, not just capability.
It is interesting to notice that four out of the five points covered thus far have something to do with money. The first point Dr. Deming talks about (the drive to become competitive) is about money. The second point says we are in a new “economic” age. Money. The third point only indirectly relates to money. The fourth point is about awarding business on the basis of price tag. Again, money. And the fifth point is also pretty closely related with money. This is why I aligned much more with Dr. Deming in my formative years than I did with the other quality gurus like Dr. Juran. To me, Dr. Deming seemed to be more business-minded.
Yet still, I didn’t see a repeatable roadmap for achieving the connection between quality and cost on an organizational scale. There was a theory, but there was no scientific strategy. Today we have a scientific strategy for breakthrough in the critical performance parameters of a business at all levels. And we have coupled that strategy with the systematic deployment and implementation of Black Belt projects. Beyond this, through the experience of exemplars like GE, DuPont and other fine companies, we have mechanized Six Sigma to the point at which its leadership and managerial aspects can be repeated by other corporations. In this sense, we not only achieve process-level breakthrough in systematic fashion, but we systematically achieve business-breakthrough as well, but in a hierarchically connected way.
6. Institute training on the job.
Dr. Harry: I agree. But I would add that all training must be accountable back to the business. It must produce clearly visible and immediate benefits to the corporation. So, yes, you institute on-the-job training. But you do so in a way that is rooted in economics. It goes back to the simple relationship: Y = f(X), where Y is the effect and X is the cause. If an organization conducts leadership training (X), then what is the linkage of that training to the bottom line (Y)? Anything short of such line-of-sight accountability is simply unacceptable.
We must always remember that a corporation is in business to make money – not to train, educate or otherwise enrich the workforce, unless such activities can be traced with a hard line back to the income statement. While this may sound somewhat Darwinist, it must be remembered (at all times) that the very nature of a capitalist venture is a dog-eat-dog proposition. Thus, sustained prosperity requires a “hunter” mentality that says if the hunt is not successful, no one eats today.
7. Institute leadership. The aim of supervision should be to help people and machines and gadgets to do a better job. Supervision of management is in need of overhaul, as well as supervision of production workers.
Dr. Harry: I can’t disagree with the idea of this one, but it can be pointed out that some other factors be considered as well. While the ultimate aim is to institute leadership, there are several milestones you pass through on the way. At every level of a corporation, you define what a leader is. Then you identify those who meet the criteria. After this, you still have to install them, train them, develop them, coach them, mentor them and empower them. Only after this can you institute leadership.
As well, it appears Dr. Deming is really talking about supervisor-ship and not so much about management-ship or leadership. Such a supervisory focus does not address the need for leaders and managers who are capable of instituting quantum change as common practice. If we institute anything, it should be the ideas of breakthrough and leadership. Yes, we need the very strongest leaders to do this. Six Sigma methods and supporting enablers alone are not sufficient for changing the performance vector of a corporation. We need to enlist the strongest leaders in addition to applying the Breakthrough Strategy.
My position is clearly about the need for strong Six Sigma leadership, and the reasoning that leads to breakthrough. Therefore, we provide a roadmap for selecting, developing, empowering and rewarding Champions, Master Black Belts and Black Belts, as well as Green Belts and White Belts. We have gone to great length and depth in articulating why such Six Sigma practitioners are not quality professionals but leaders. We must be absolutely crystal clear that business breakthrough demands the strongest of leadership throughout the hierarchy of an organization.
Inasmuch as the call of TQM was to involve everyone, to achieve “full participation,” Six Sigma demands that we have a critical mass of empowered leaders (with the right ideas) at all organizational levels and across all organizational functions. In this sense we really don’t need leaders “everywhere,” we only need the right leaders in the right places at the right times. A properly configured and strongly led Six Sigma deployment thrust ensures this happens, and ensures that uncommon leadership becomes common.
8. Drive out fear, so that everyone may work effectively for the company.
Dr. Harry: I don’t totally agree with this point. Like it or not, fear is part of the human experience, and it exists for a purpose. It was a famous psychologist who once said learning cannot occur unless a little anxiety is present. Anxiety is often just another manifestation of fear.
You better fear your competition. You better fear your customer. Fear can be a very healthy tool in the fight for survival. A lack of fear can lead to deprived respect, which in turn can lead to a lack of vigilance, urgency and motivation.
A consequence-free environment is not healthy in a capitalist enterprise. You had better fear what’s up the food chain from you. You had better fear what’s on the lateral sides of the food chain from you, and potentially what’s underneath. Remember, in a Darwinist system, it may look fuzzy and harmless, at least until it decides to eat you. Dr. Deming talks about the aim to “stay in business.” Why stay in business? Because the common fear within a business enterprise is the continual possibility of not being in business. The trick is to learn to embrace fear and harness it in a positive way.
When we fear, we fear consequences. Without consequences, we have lost a major driving force in the human experience. The key is to make fear a driving force, not a restraining force. While too much fear can inhibit progress, the right types and amount of fear can catalyze forward momentum. In other words, positive reward alone is often not enough to build and sustain business inertia; it is the proper mix of consequences (positive and negative) that optimizes the chance of survival and that creates the environment for breakthrough.
In this sense, the right types and amounts of fear are good. On the other hand, when fear is used as a short cut, or substitute for sound leadership, it is not positive or productive. It is difficult to prescribe the right amount of anxiety that should be present to optimize performance. That is the job of a leader-creating the right blend of positive and negative consequences and knowing where to draw the line. In this sense, I don’t want to drive out all fear. I just want to create and maintain the right amount, call it “entitlement fear” – the kind of fear that induces productive anxiety and drives a learning organization.
9. Break down barriers between departments. People in research, design, sales, and production must work as a team to foresee problems of production and in use that may be encountered with the product or service.
Dr. Harry: I agree for the most part. Research, design, production, sales – all people and departments must work as a team. This is the only way to solve cross-functional problems. And it’s not just those who are internal to a corporation but customers and suppliers as well. All these should be part of a relatively seamless whole, as much as is rational. However, if organizational boundaries become too transparent (virtually seamless), job roles and functions can become blurred and ambiguities can rapidly accumulate, thereby setting the stage for chaos, unclear accountability and loss of momentum. Strong leaders are able to address the issue of cross-functional teamwork while also retaining clear lines of accountability.
10. Eliminate slogans, exhortations and targets for the workforce, asking for zero defects and new levels of productivity. Such exhortations only create adversarial relationships, because the bulk of the causes of low quality and low productivity belong to the system and thus lie beyond the power of the work force.
Dr. Harry: Slogans can be good from an internal marketing and sales point of view, especially when they carry a worthwhile message. A good one: “cost of quality versus quality of cost.” Such slogans, because of their simplicity and wisdom, have an important role to play in communication and in transferring the aims of Six Sigma. When they are powerful and meaningful, they become part of a person’s mental wiring and vocabulary – especially after continual exposure and usage.
Although there does exist a body of research that shows little correlation between slogans and productivity, such a lack of correlation has little to do with the communication of intents and aims. In today’s global corporations, the delivery of a consistent message can often be a daunting effort. To this end, posters, slogans and the like can be used quite effectively. The intent is not to increase some performance aspect of the business but, rather, to simply facilitate the effective communication of a vital message.
Yet certain slogans, like asking for zero defects, are void of meaning. Insisting on zero defects is like asking a married person to go through the rest of life without ever having an argument with the spouse. It’s unrealistic. So we don’t want slogans that ask for the impossible and have no line-of-sight connection between what people’s goals are and what they actually do.
I agree, sometimes exhortations create more harm than good, because they make workers think they can solve problems that are far beyond their realm of influence. While workers can do a great deal to improve their part of the process, they cannot be held responsible for systemic shortfalls and management errors. Furthermore, workers must always be empowered with the targets, tools and methodologies for realizing the exhortations, whatever they may be. Without such empowerment, exhortations become counterproductive because, in the end, they only give management a chance to blame workers for not fulfilling them.
From my perspective, I don’t just want slogans and exhortations; I want repeatable, bottom-line, verifiable, quantum results. Here is a point where Dr. Deming is on the mark. You can’t “poster” your way to better quality. You have to design your way, and lead your way. Your workforce cannot do this for you; you have to do it, and you have to pull them into your design. That’s what Six Sigma Champions do. They are an elite force that leads the penetration of Six Sigma. They establish targets, inject methods, make resources available, and ensure the application of new tools.
As for eliminating targets, absolutely not. Six Sigma is a target – a stretch goal. That’s like saying, “Gee, I want you to go out and practice marksmanship and never use a target.” When targets are ever-present and operationally meaningful, a reward and recognition system can be developed around them in a very direct, substantive, accountable and connected manner. By doing so, the management is then better able to reinforce the underpinning values.
11. Eliminate work standards (quotas) on the factory floor. Substitute leadership.
Eliminate management by objective. Eliminate management by numbers, numerical goals. Substitute leadership.
Dr. Harry: On this point, I couldn’t disagree more. On all accounts, I disagree. You cannot run a corporation without numbers, and measurements. You must have stretch goals, and you must have capability-driven work standards (quantifiable expectations) to facilitate breakthrough and gauge the gaps. You must constantly measure performance and focus on improving margins, earnings growth and profitability.
As Dr. Deming says, if you fix the system, then better numbers will flow out. But you surely need objectives (goals) to guide your fixing of the system. You need a dashboard by which you can fly the jet of corporate breakthrough. Imagine a jumbo-jet pilot trying to fly the machine without a dashboard. Now imagine running a global corporation without a dashboard. You need defined, quantified, financially-oriented stretch objectives at the highest level of a corporation. Then you need a tightly correlated system of metrics at the business, operations and process levels. Finally, you need the people, system, training, software, etc. to realize the stretch goals.
In all of this, the most important message is to live by the principle of measurement, especially when it comes to goal setting. If we can’t express what we know in the form of measurements, we really don’t know much about it. If we don’t know much about it, we can’t control it. If we can’t control it, we are at the mercy of chance. And you can’t lead random chance. You can’t improve what you don’t measure. Deming’s point about goals and numbers is in direct contrast and violation of Six Sigma.
A final word on work standards is that they should be eliminated when and where they impede forward progress. There are times when you need productivity standards and times when you don’t need such standards. The more important point is to nail down your goals and targets, and your system for achieving breakthrough. Work standards are a tool to support this drive and should be employed mainly in the interest of controlling and standardizing processes that have already realized breakthrough – until the next cycle of breakthrough. In this sense, the application of standards helps us “sustain the gains.”
12. Remove barriers that rob the hourly worker of their right to pride of workmanship. The responsibility of supervisors must be changed from sheer numbers to quality. Remove barriers that rob people in management and in engineering of their right to pride of workmanship. This means, inter alia, abolishment of the annual or merit rating and of managing by objective.
Dr. Harry: A significant part of this point relates to the elimination of annual rating or merit systems for evaluating and rewarding workers. Here again, this flat-out flies in the face of the capitalist and Darwinist principles upon which we have built Western business culture. I want clear annual merit reviews based on clearly defined and unambiguous financial and operational targets. I’ve never seen a Second Lieutenant yet that’s told to “go win the war.” I do hear him told, “that hill, tomorrow morning, 6:00 AM, be on it.” The next day, “that other hill over there, five in the afternoon, be on it.”
It’s not workmanship we rob people of, it’s innovation. We rob them of participation. We rob them of the chance to implement their ideas. We rob them of their ability to lead and contribute in meaningful ways. Modern technology and engineering has already largely automated or otherwise eliminated much of the “workmanship” issue. Today’s workers are involved in checkman-ship, put-in-here-ship, management-ship, execution-ship, task-ship – that sort of thing. Because of this, pride of workmanship is no longer a central issue – because we have smartly “poka-yoked” a large portion of what we do.
What we need to develop in the workforce is pride of leadership. Leaders are empowered by
a meritocracy, not intimidated by it. Give me a goal, give me a powerful way of achieving that goal (Six Sigma), and my pride will drive me to produce what I promised, and even more. I will be glad to subject myself to quantitative scrutiny and accountability, because the essence of business quality is numbers. Without valid and reliable numbers, all you have is wishful thinking and unsubstantiated bragging. But with numbers, I can show the impact of my work and demonstrate my ability to add value. In short, numbers-oriented thinking applies to people as much as it applies to processes and products.
13. Institute a vigorous program of education and self improvement.
Dr. Harry: The bell curve applies for motivation around self improvement. Given this, we
can say that 50 percent of the workforce will be above average in their motivation for self improvement, and 50 percent will be below average in this regard. Therefore, one can easily conclude, based on the principle of the bell curve, that half the organization won’t have the motivation necessary for a self-imposed drive for breakthrough. That’s why we have Champions and Black Belts – because they are drawn from the upper tail of the bell curve, and they possess the greatest leverage in creating breakthrough.
Everyone thinks they are a good worker. Just ask. I can’t recall ever hearing a worker say “I am not a good worker.” Many people don’t believe education or self improvement is essential to do a better job – because they believe they are already doing the very best that can be done.
Beyond this, I believe a business enterprise should not be focused on educating its workforce. However, I do believe that corporations should be obsessed with continually training their workforce. Why do I say this? Well, when your daughter comes home from high school and says she received a course in sex education, what do you say? It is likely that you would respond: “Wonderful.” But when she comes home and says she had sex training? A little different meaning there. My point is that training should be purposefully designed with the aim of impregnating the product with quality – impelling the organization to higher levels of productivity and lower transactional costs.
Once I walked into a facility at ABB and asked the general manager to bring in the head of training and education. I had noticed “Training and Education Department” on the marquee when I walked through the building. So the head of the department walked in, and pointed out that his sign said Training and Education Department, and that it had a little arrow pointing down the hall. I asked him how many people worked for him, and he told me “about 10.” I asked him to provide me a list of all those who were trainers and all who were educators. Some discussion ensued. I then suggested that the education department be eliminated and sign be changed to read “Training Results Department.” Of course, the message was clear. Following this, I turned to the facility manager and said, “What percentage of your total cost is in training?” He told me the number, and I then showed him the correlation between training and cost of quality. This naturally begged the question: How will you ever lower your cost of quality if you don’t increase your quality training budget?
Evidence shows that you can get a ten times return on investment if your training is focused on Six Sigma. My next set of questions went as follows. Why are you putting forth such a small training budget? Are you telling me you don’t want better productivity, you don’t want a better cost structure? You don’t want more satisfied customers? You raise your financial and productivity goals, then cut back on your training budget to help realize those goals. Is there a problem here?
If you want better productivity and performance, you have to increase your training budget. So now the facility manager asks where he will get the money for this increased training, and he finds out it will not be provided to him. Instead, the resources will be allocated from savings in scrap and hard productivity improvements. And oh, by the way, the facility manager should also be able to return a greater profit to the corporation.
So the scrap goes down, productivity goes up, the training head gets a bigger budget, the facility manager gets his bonus, the corporation makes more profit and the customer experiences greater satisfaction. This is the cycle of breakthrough. I then asked the facility manager if this was an OK plan. “Is there a reason why you, as a leader here, can’t make that happen? Or do we need somebody with a vision who can? I assume you have that vision, Mr. Facility Manager.” “Absolutely, I have that vision.” “Well good,” I said. “We are looking forward to your increased returns now that you have the roadmap. If this is too harsh for you, just ask the shareholders which part of this cycle should be deleted or otherwise ignored.”
14. Put everyone in the company to work to accomplish the transformation. The transformation is everybody’s job.
Dr. Harry: Deming was clearly referring to the idea that everyone in a company must work toward accomplishing transformation – that transformation is everybody’s job. Yes this is true, but so what. This point embodies my impression of TQM in general: it is a nonspecific, platonic-like, ideologically-based mantra with no specific aim or direction. That’s why TQM has failed to deliver its promises. What a corporation needs is a defined process by which to transform the ordinary into the extraordinary in a highly accountable, results-driven manner. Six Sigma, in conjunction with the Breakthrough Strategy, provides the roadmap for doing this.
Furthermore, we might consider that while transformation is everyone’s job, it is only led by a select few. It is the people at the right tail of the bell curve who possess the greatest capability and capacity to drive change. It is these people, those who become Champions, Master Black Belts, Black Belts, Green Belts, and White Belts. These are the people who drive quantum change. The masses in a corporation tend to vacillate back and forth, depending on what happens at the extremes.
The corporate change agents move toward breakthrough and transformation, while the anti-change agents at the other end of the bell curve resist such change, sometimes with equal or greater force. The job of the Six Sigma leader is not so much to focus on moving or influencing the masses but to disable those who actively resist beneficial change. By doing so, resistance to change is disabled, and the population as a whole moves in the desired direction.
Looking in the Rearview Mirror
Of interest, the Breakthrough Strategy opened up the gearbox of Six Sigma at the process, operations and business levels of a corporation. When you look inside the inner workings of Six Sigma deployment and implementation, you see a money factory, constantly repeating its cycle to generate more and more cash. What you also see is a few strong leaders pushing and pulling and backing the fluid execution of the Six Sigma machinery.
Perhaps Deming’s 14 points should have all been about leadership, not about quality. Perhaps quality is common, but leadership is uncommon. Perhaps the new goal isn’t Six Sigma but “enabled leadership.” Six Sigma enables leadership, while leadership empowers Six Sigma. While the two are intertwined, leadership is the key. Therefore, an organization should strive to develop leaders, vertically and horizontally – those who carry a common set of economic aims, goals, metrics, vision of infrastructure, principles, practices, processes, tools and language.
That’s the way Six Sigma was formed. When developing Six Sigma, Dr. Harry fully considered and factored Dr. Deming’s reasoning and experience-based lessons, as well as those of many other recognized and respected leaders.
With these elements in hand, Dr. Harry created a dynamic, cohesive, highly-focused, leadership-based, data-driven, management-by-fact system for bringing more money to the shareholders and the corporation, while also enhancing customer satisfaction. And he reinforced that system with hard objectives, visible metrics, intensive leadership training and monetary reward. That’s how you get breakthrough. That’s how you achieve quality of business and avoid the business of quality. That’s how you turn a corporation in a bold, new direction.
Business Phone: 480.515.0890
Business Email: Mikel.Harry@SS-MI.com
Copyright 2013 Dr. Mikel J. Harry, Ltd.