Stat Free Six Sigma – An Excellence InnovationIdeaConnection Interview with Praveen Gupta, Author of The Innovation Solution, Business Innovation in the 21st Century, The Six Sigma Performance Handbook, and Six Sigma Business Scorecard and Co-author of Stat Free Six Sigma, The Six Sigma Green Belt Handbook, Six Sigma Deployment and more
July 21, 2012. By Vern Burkhardt"Six Sigma does sound statistical in nature; in reality, however, it is a strategic initiative with a touch of statistics." Virtually Stat Free Six Sigma, page 112
Vern Burkhardt (VB): What is Six Sigma?
Praveen Gupta: It is a quality initiative where the approach is to achieve virtual perfection quickly, and to be the best in class in everything an organization does. Ultimately, it strives to realize powerful bottom-line results.
Six Sigma is applicable to all industries, and focuses on business performance objectives as well as return on investment – primarily on cost reduction.
Six Sigma is also a statistical term which means the variation in processes will not exceed 3.4 defects per million. It is a methodology for eliminating defects, for driving toward six standard deviations between the mean and the nearest specification limit in any process.
This is why it is considered virtual perfection. Excellence is achieving perfection, which means being on target and reducing inconsistencies relative to the target.
Six Sigma was developed as a methodology at Motorola in the 1985 to 87 time period for enabling the company to become the best in its industry. The goal was to be the world leader in business performance.
VB: What was unique about Motorola that led to its leaders wanting the company to become a world leader?
Praveen Gupta: Motorola had been a leader in the communications field but was not making enough money in the semi-conductor business even in the early years of semiconductor industry with less competition. Being the founder's son, Bob Galvin had a personal interest to make Motorola a better place, and recognized quality as a cause for business success. Quality became his focus. In 1981 he set a goal for the company to improve 10 fold in 5 years.
At the time it was recognized that if big companies like IBM, Western Electric, and Westinghouse weren't striving to be the best they would disappear. As we know many old, well-established companies no longer exist because newer companies captured the market with better quality and newer products. The goal of being the best and innovating new capabilities led Motorola to strive for Six Sigma performance.
VB: It must have been pretty exciting to be involved in this work.
Praveen Gupta: Yes, I joined in 1981, and this was when Motorola started its quality journey. At the time we didn't know exactly what was happening, but we knew something dramatic for the business was underway. I was lucky to be in the right place at the right time to be part of the development of the methodology before it was launched.
VB: How can Six Sigma be "virtually stat free?"
Praveen Gupta: Six Sigma was not designed to be a statistical methodology. It was designed to be a methodology to enable organizations to become the best or to be the market leaders.
In recent years many implementations of Six Sigma have been more focused on implementing the statistics component of the methodology with the result they have gotten lost in the process rather than addressing the intention of producing breakthrough improvements.
Some time ago I was teaching a class at a large insurance company, and every time I used the word 'statistics' people liked it less. They would slump deeper in their chairs! Reviewing the training feedback made it clear that people did not like the statistics part of Six Sigma. I thought there must be a way to teach this methodology without emphasis on statistics, especially knowing how the methodology was developed. It was December 16th when I examined this feedback, and by December 29th I had developed the concept of 'stat free Six Sigma'. And wrote the book. I had challenged myself to publish a book about this concept within two months. So the concept was developed in two weeks and the book was published on February 7, 2007.
VB: You must have worked around the clock.
Praveen Gupta: The funny thing was that I had been working for a long time on making the statistics part of the methodology simple, but I never thought I could do what I did in the Virtually Stat Free Six Sigma book. This was possible once I decided to innovatively replace all the complicated tests and hypotheses with some simple rules.
So the 'virtually' stat free Six Sigma is an innovation in Six Sigma where innovative thinking is applied to create something that the users want. They wanted it without statistics, and they were my customers.
Of course, the perception in a lot of companies is that unless you train employees in-depth with statistics related to Six Sigma it would not be good enough. This point of view has to change because Six Sigma was not designed to be a methodology for teaching statistics. It was designed as a methodology for business improvement and for achieving excellence with statistical thinking.
VB: Implementing Six Sigma is not an end in itself.
Praveen Gupta: In my experience most of the companies that deploy Six Sigma don't know their Sigma level. Many don't want to know their Sigma level because they are afraid they won't be able to show improvement. For them gathering statistics in the name of Six Sigma has become an end in itself rather than a means to accelerate performance improvements.
My intent has been to position the methodology in the right way so it delivers results rather than just getting people engaged and busy with the Six Sigma methodology.
VB: You say, "Data become facts, facts become information, information becomes knowledge, and knowledge becomes intelligence that is used to make decisions." Would you talk a bit about this?
Praveen Gupta: Recently the definition of Six Sigma has changed. I read a current definition of it as being a 'fact-based decision-making process and an improvement methodology', but often in real life you have to work without all the data you would like to have. The data is often not available, and sometimes it's useless when available. But you can improve the process without investing excessive amounts of money to collect difficult to obtain data.
Process improvement is beefing up your knowledge about what is lacking, and this leads you to look at gaps in the process. If you consider Six Sigma methodology as building your knowledge then you can ask the question, "What is the purpose of data?" Data begins as information and then you build on it, analyze it, and get a summary of it. From this comes intelligence, and when you apply intelligence you get experience. We cannot ignore the importance and value of experience. The data gives you intelligence and so does your experience. Experience is an intuitive collection of information that is not formally collected, but still highly valuable.
Based on working with many projects I have found that actual improvement comes from the process knowledge of the problem-solver and it is supported by data. Not the other way around. Knowledge of the processes is more important than a statistic. As is said, correlations do not guarantee causations but causations guarantee correlations. It is engineering and knowledge that improve the process.
Six Sigma integrates many tools to enhance the process knowledge that is lacking.
VB: You say that even though 80% of the tools of Six Sigma are non-statistical, 80% of the debate about the efficacy of this methodology revolves around the 20% of the tools that are statistical. Why do you think this is the case?
Praveen Gupta: It goes back to the fact that Six Sigma and problem solving require people to think. Some people resist thinking, and they hang onto statistical crutches.
Many people have been trained in statistics. There are so many qualified professionals who have learned statistics, but they have not been able to effectively use statistics for process improvement. For them they already have a hammer and they think they hammer out everything. In essence it becomes the easy way out. The existence of statistics becomes an easy target to grab onto and work with rather than spending time thinking, analyzing, and modeling the process and the causality issues.
On top of this, statistical software programs trivialize the whole process. As a result some people are now defending what a statistic means by depending on the output of statistical software, and when the software indicates something they think it is true. This is totally absurd. I've been in a company that did a multi-million dollar experiment using data from a statistical software package. I've also seen an argument between engineers when statistical analysis showed a correlation and problem solving experts believed the correlated variable be the cause. In response the engineering manager insisted, "If I do what the data suggests, it will burn the product. Its not physically possible." Sometimes people take statistics in the wrong way – in a literal way – rather than the way it was intended.
If statistics is used properly they are great assets. They can make you smarter and more intelligent and enable you to see the future. But you must recognize that statistical thinking is more important than the statistical tools. Statistical tools used without statistical thinking can lead to analysis paralysis.
VB: Statistical thinking is wise thinking about the available data rather than a continuous search for more data.
Praveen Gupta: Statistical thinking is understanding the nature of the variation in the business process. Once it is understood decisions can be made about what kinds of changes have to be made in the process.
Walter Shewhart developed the concept of control charts in the 1920s while working for Bell Labs. These 'Shewhart charts' are used as tools in statistical process control to determine whether a business or manufacturing process is in a state of 'statistical control'. If the data in the control chart indicates that the process is stable and therefore under control changes should not be made to the process control parameters, and future performance of the process can be predicted. If the control chart indicates that the process being monitored is not in control, an analysis of the data in the chart can help determine the sources of variation. These sources of variation can then be eliminated to bring the process back into control.
There are only two types of changes you can make to improve a process. Either you adjust the process or you redesign the process in order to reduce variability.
Some people say Six Sigma is all about reducing variability but I have noticed most projects are about adjusting the process rather than reducing variability. Reducing variability is hard, almost requiring redesigning the process.
VB: Some seem to think the Six Sigma methodology is most applicable to manufacturing processes. Do you advise it is applicable to all industries, including services as well?
Praveen Gupta: Yes, Six Sigma is a process-based methodology. The objective is to improve the process and it doesn't matter what industry the process is in. Service businesses also have sales, quality process, operations processes, management processes, and others similar to manufacturing businesses.
VB: In your experience does it appear that the Six Sigma methodology has become a passing fad with some companies?
Praveen Gupta: We read about success stories of many companies who have implemented Six Sigma – even those that have had sub-optimal successes – but a lot of companies have not seen the potential benefits. They have been pre-occupied with the methodologies and the tools rather than improvement and results. As with many management initiatives casually launched, Six Sigma can also become a passing fad.
It is the 25th year of Six Sigma. It was officially launched on January 1987. Six Sigma has diminished in its value because of a focus on statistics. One of the major detrimental factors has been many people think Six Sigma is all about reducing variability. Six Sigma is not about reducing variability; it's about dramatically improving processes.
If your paycheck is short by even a small amount, how fast do you want to get it fixed? You want people want to take care of it right away. Similarly, Six Sigma is designed to fix a process very quickly if there is a waste in the process. That's the intent of Six Sigma.
VB: Do you have any advice for those considering whether to implement such an initiative?
Praveen Gupta: As with any tool or methodology one should always first focus on intent. The intent of Six Sigma is not on gathering statistics. The intent is achieving dramatic improvement quickly.
If you want the fastest improvement in your company, focus on teaching your employees the intent of the change. They'll figure it out 'how'. They'll use tools that they already know.
In most cases people don't focus enough on intent. Their objective is often on learning something new such as the Six Sigma methodology, tools, and measurements. Instead of focusing on methods, tools and measurements, they should focus on the intent first in order to achieve improvement.
Six Sigma is still the best tool available for dramatic improvement.
VB: What are some of the key reasons Six Sigma initiatives fail to meet expectations?
Praveen Gupta: When I referred to knowing the intent of implementing Six Sigma, I meant setting an aggressive goal for process improvement.
Many companies have not set any expectations for their implementation of Six Sigma. They have treated it like a normal continuous improvement process. This means they have ignored the most critical aspect of Six Sigma, which is to achieve dramatic improvement quickly. In the absence of this intent, implementation is paced too slowly with the result that they don't see measurable benefits, much less dramatic benefits.
VB: W. Edwards Deming talked about continuous improvement but this is different. Six Sigma is about making dramatic improvement.
Praveen Gupta: Deming talked about continuous improvement using variability reduction. Six Sigma evolved after the frustration of sub-optimally using statistical tools independently in different departments of a company.
If you set a goal for 60%, 70%, or even 80% improvement within 3 to 4 months it forces collaboration across departments. It requires breakthrough improvement.
Without creativity and collaboration you cannot achieve breakthrough improvement. Creativity is a missing component in many of today's implementations of Six Sigma.
VB: How much emphasis do you place on a well-written project charter for Six Sigma projects?
Praveen Gupta: It's huge. In many companies people are busy working on projects that are not going to have any economic impact.
Six Sigma is not a silver bullet to achieve anything and everything. It should be applied to opportunities that have the potential to have a significant economic impact. It is designed to be a tool for improving a company's profitability. You want to use the Six Sigma methodology where there are opportunities to serve customers better.
VB: "One of the subtle aspects of a successful Six Sigma journey is driving out fear." Doesn't waste reduction increase the potential for job reductions and therefore the potential for fear?
Praveen Gupta: It's a good question. Deming said, "Drive out the fear" but he didn't advise how you do this.
A simple approach to driving out fear in employees in the context of innovation is achieved by bringing in fun. If you bring in fun it means you really care for people. This drives out their fear and will engage them.
One of the challenges for Six Sigma is to ensure it doesn't lead to job reductions. Recently it seems that most companies have been focusing on improving their bottom line. While focusing on profit they are not thinking creatively; they are busy doing things that have a negative undertone. When they do this the measure of success is lay-offs. This is a questionable approach for driving improvement because when people know this is how their company is operating they don't bring out their best. It is one of the main reasons why Six Sigma programs fail.
What I suggest to companies is go back to the fundamental strategy of focusing on growth, not on profit. Focus on growth, but profitably. Growth brings in positive thinking and right-mindedness, and Six Sigma properly implemented brings profit. When you save resources by achieving efficiencies the extra available resources must be used for growth.
One may notice that when companies focus on Lean and Six Sigma and keep downsizing they are either bought out or just go away. If companies focus on growth and Six Sigma concurrently, extra capacity can be used for growth rather than being eliminated through layoffs.
VB: "If an organization wants to maximize return on investment in Six Sigma, it must institutionalize the expectation of dramatic improvement quickly." Is creating a sense of urgency for Six Sigma projects a key for success?
Praveen Gupta: Six Sigma requires a dramatic improvement and you have to do it fast. The Six Sigma methodology includes three measurements. There is one measurement for customers, a second for process owners, and a third for leaders of the organization each. The Defects per unit (DPU) measure is for customers; they want zero DPU. The Defects per million opportunities measure (DPMO) is for the process owners; they need to reduce it to 3.4 per million or less. The Sigma level is designed for the executives so that they can set incremental improve targets in sigma levels for their people. For example improving from 3 to 4 Sigma level would require about 90% change, a large improvement in all business processes.
An example of the extent of improvement which Six Sigma programs can achieve is provided by the Motorola experience where between 1987 and 1989 the goal was attaining a 10-fold improvement, a 100-fold improvement by 1991, and achieving Six Sigma capability by 1992. This leadership expectation created a sense of urgency for change throughout the organization.
Executives of companies that have implemented the Six Sigma methodology often are not using the sigma levels as targets and measurements, and this is why you don't see use of Six Sigma growing in companies. Dramatic improvements are not being achieved due to leadership's lack of expectations and the measurement for monitoring Six Sigma programs.
VB: Would you explain the Six Sigma level? How did the allowance for variability become 3.4 per million?
Praveen Gupta: Bill Smith was the inventor of Six Sigma. To determine its goal for excellence, Motorola benchmarked its processes with outside companies in Japan, U.S., Canada and other parts of the world for defect rate. It was found that the best in class was around 3.4 defects per million – virtually perfect.
This small tolerance for defects was intended to have a big psychological impact. We weren't saying to people to do a perfect job but rather to do close to a perfect job. It takes the mental block out of the system because saying the target is absolute perfection can lead to indecisiveness, inaction, or prolonged analysis at the expense of getting the job done.
VB: Do you think given today's fine-tuned manufacturing processes in the electronic industry the variability target should be even less than the Six Sigma or 3.4 parts per million standard?
Praveen Gupta: That is a good question, because some people will say if you design for perfection why this 3.4 parts per million standard?
The goal is not to measure and be satisfied with 3.4. It is to measure your defect rate, identify opportunities for improvement in all processes, and move towards perfection. Never be satisfied with the status quo; always strive for perfection.
On the other hand, in today's environment where the product life cycle is shrinking you may never have time to be at the point of 3.4 DPMO. So you have to do excellent design to begin with, execute in the best possible manner, and be close to perfect at the outset in all business processes.
Six Sigma accelerated the move towards the target versus the quality movement that was intended to produce acceptable products. Today the goal is not to merely make acceptable products but rather to make virtually perfect products.
Apple is a good example in that its products are well designed, innovative, and almost perfectly produced. Apple's execution is close to perfect. And their production and manufacturing is excellent.
VB: Perfection has almost become the expectation for all products.
Praveen Gupta: Yes. It's funny that even though there's an expectation to be the best at the Six Sigma level, in the western and developed economies most companies are still using the same old methods. They are having the same old problems and the same old challenges versus newer companies and newer economies where people know that in order to survive and to make money quickly they have to be perfect.
VB: You describe a tendency for some companies to move to the next Six Sigma project after only achieving a 10% improvement in the existing project. You refer to this as "project-hopping and a missed opportunity for innovation." Would you talk about these missed opportunities?
Praveen Gupta: The value proposition of the Six Sigma methodology is often not clearly articulated upfront and that's what is causing this problem of project hopping. It's a leadership issue.
Many leaders don't have a goal and expectation for the Six Sigma methodology. They just do it because it's a fad and some people in their organization want to implement the program. These leaders do want to see some improvements, but they don't focus on getting the most improvement possible.
The issue is becoming the best or being satisfied with some incremental improvements. Most companies seem to be focusing on getting some improvement, not to be the best and get the most improvement out of the Six Sigma methodology.
VB: Executives don't always focus on one thing for a long enough period of time. They jump to the next 'fad'.
Praveen Gupta: It is partially true because executives jump off the wagon all the time, but a lot of it has to do with a lack of right understanding of Six Sigma. They do not take time to learn the way that Six Sigma should be implemented and practiced. They delegate its implementation to their juniors in the quality departments or to Six Sigma leaders.
If you notice the best implementations of Six Sigma such as at GE, Motorola, Whirlpool, Raytheon, and Samsung, their CEO's names have been interchangeable with Six Sigma. They, not their subordinates, were the best spokespersons for Six Sigma. Unless this happens you won't see the extent of improvement that is intended using Six Sigma.
VB: How does 'innovative thinking' fit with the Six Sigma methodology?
Praveen Gupta: I once heard a famous CEO say the Six Sigma methodology is about reducing variability and that it has nothing to do with innovation. Elsewhere I read an article that Six Sigma is not for new product development; it's for the manufacturing process.
Having worked with Bill Smith and understanding the true intent of Six Sigma, I learned Six Sigma was always about breakthrough solutions. This seems to often be lost when companies embark on their Six Sigma journey.
Breakthrough solution means doing things differently. Six Sigma was meant to change the way of doing business to achieve virtual perfection. Often people don't want to change the way they work so innovation has to be brought into changing the way of doing work.
While I was working on improving the Six Sigma process for my book Six Sigma Performance Handbook, I combined Eliyahu Goldratt's Theory of Constraints and Six Sigma. The analysis showed that one must possess four skills to achieve a dramatic improvement quickly: time management, process thinking, statistical thinking, and innovative thinking. Time management skills are necessary so the execution of any planned activity progresses on schedule. Process thinking enables us to understand how the process works. The third, statistical thinking, is about understanding random and assignable variations. Random variations are uncontrollable while assignable variations are the result of specific actions.
The question about innovative thinking required understanding what is creativity, and how you teach it to people. It turns out that innovative thinking implies doing things differently. In order to benefit from a Six Sigma initiative on an ongoing basis, leaders must systematize innovative thinking throughout their organizations. This means their people must have process knowledge, be capable of experimenting with various possibilities, and go beyond the obvious to come up with solutions that achieve breakthrough improvements.
VB: Would you share an example of Six Sigma 'breakthrough improvement'?
Praveen Gupta: Of course one example is developing Six Sigma without statistics. It requires totally different thinking.
Totally redesigning a process is always beneficial. I was asked by a company to improve a process that was many years old. Many hands and attempts to improve the process were not working. There was a mess all over the floor and they didn't know what to do to address the problem. When I looked at it I said, "We can improve the process, guaranteed, but we're not going to focus on only one aspect of the process. By analyzing the whole system, implementing Six Sigma methodology, and fixing all the processes the whole system was eventually made virtually perfect. The process yield improved from 45% to 99%. The area director's comment was, "You made this improvement process a science instead of an art."
VB: "Typically in a non-Sigma environment we jump to solving the problem directly without defining the problem clearly and understanding the process well. Without such an in-depth knowledge of the process, solving a problem becomes a luck of the draw." Is selecting the right problem also the luck of the draw?
Praveen Gupta: If people don't have adequate process knowledge, access to sufficient data, and use the right tools to set priorities, selecting a problem can become the luck of a draw.
Six Sigma successes depend on having process knowledge. In the absence of analytical work and process thinking, problems keep recurring because the underlying causes have not been addressed.
If you follow the Six Sigma methodology systematically you will solve the problems every time and you shouldn't be fighting fires. Success stories, where solving problems was by luck or trial-and-error, are not really stories of success. You can solve problems every single time if you follow the Six Sigma methodology correctly.
VB: You identify 10 tools for an executive's participation in the Six Sigma initiative. In your consulting practice do you find it is difficult to get executives to take the time to learn these tools and concepts?
Praveen Gupta: Executives are very busy and often don't feel they have the time to learn the 10 tools, but busyness should not get in the way of learning the necessary tools.
As we have discussed, the leaders' job is to build and grow their businesses and to create new opportunities. Leaders who are not thinking and learning are not truly leaders; they are more like administrators or managers. If any leader wants to create new opportunities, the leader needs to learn new skills such as Six Sigma.
Leaders don't have to become a master in all aspects of the Six Sigma methodology. They should gain basic understandings and insights of what it means, why is it designed the way it is, and how it works. And, as you said a moment ago, they need to become familiar with 10 key tools.
[Vern's note: The 10 tools which Praveen Gupta says an executive must become familiar with if they are to actively participate in a Six Sigma initiative are: Employee Recognition, Process Thinking, Six Sigma Business Scorecard, Management Review, Statistical Thinking, Six Sigma Overview, Pareto Principle, Process Mapping, Cause and Effect Analysis, and Rate of Improvement.]
VB: If they don't learn the basics they probably won't have a long-term commitment to the Six Sigma methodology.
Praveen Gupta: You're right. If they don't understand Six Sigma they won't commit to it or, if they are committed, it will be a half-hearted commitment. They'll want to abandon it at the first challenge or first failure. If they see a lack of results they'll kill the initiative because they won't understand what to expect and how to lead a Six Sigma initiative.
VB: "An engaging and challenging management review is the soul of implementing the Six Sigma initiative successfully." What should be the focus of such reviews?
Praveen Gupta: The leadership of an organization must be engaged in understanding Six Sigma, focusing on success, striving for improvement, and identifying causes if they're not seeing the expected results. If leaders continue accepting mediocre performance and poorly performing Six Sigma projects without adjustment they will have difficulty sustaining the initiative. If leaders are not demanding success it means they don't care for the Six Sigma initiative.
Leaders need to care for their companies and strive to build the business, rather than only focus on the company's profitability. Companies must be growing, and this should be the main focus of leaders.
VB: If a business is not growing, it's going to be unsuccessful. Is this the conclusion?
Praveen Gupta: There are only two choices. Either a business grows or it goes down. In the end if the business is not growing, it's going to shrink.
VB: When talking about Kano's Analysis, one of the Stat-Free DMAIC tools, you say that delivering 'love to have' features or services excites customers but over time these become assumed requirements. Is this a paradox affecting all customer service?
Praveen Gupta: Kano's model was first used to assess the quality of service in the airlines industry. His observations were that customers have many more unspoken than spoken requirements, and to address them it requires building relationships with your customers. Building relationships means caring about customers and customers' use of your products and services, and gaining insights from the challenges they face in doing business with you or using your product. Once you understand not only what the customers' spoken requirements are but also their unspoken requirements, then you can really deliver what customers would love to have and pay for.
'Love to have' means listening to your customers, paying attention to their needs, and creatively providing surprising solutions. Providing surprising solutions builds customer loyalty.
VB: And you have to keep doing it.
Praveen Gupta: Yes, today's love to have requirements become tomorrow's necessity because now it has become a known and spoken requirement! It becomes a new expectation and the new status quo. Companies need to continually develop and think of new ways to surprise customers.
VB: When talking about the 'Cost of Quality' you say, "The cost of poor quality should be examined as a percentage of profit instead of as a percentage of sales." Would this perspective likely lead to less tolerance for poor quality?
Praveen Gupta: Good quality is a given. There should be no tolerance for poor quality in an organization.
We should think of poor quality as being no different than if your were to be missing or short-changed on your paycheck. How long would you like to wait to get it fixed? Would you accept the company's reasons or excuses for your missing paycheck? Similarly, in case of poor quality there should be no tolerance for any error; we cannot have reasons for poor quality. If we accept reasons for poor quality, it is going to affect customers so we should have no tolerance at all for poor quality.
VB: "In statistical thinking… everything happens by chance. The degree of chance is what separates the random events from assignable events." What is the significance of this observation for process improvement?
Praveen Gupta: The significance of random variation and assignable variation is what type of solutions you will need to address the underlying business process problem. If it is an assignable variation, it is easier to address because it requires a processing adjustment. If it is a random variation it is more difficult to fix because it requires a process redesign.
VB: What does Six Sigma Master Black Belt mean?
Praveen Gupta: There are multiple levels: black belt, green belt, and master black belt. Green belt means you can work with Six Sigma process improvement projects. A Black Belt enables you to lead these projects, and a Master Black Belt qualifies you to train the black belts in the required skills.
VB: Would you talk about the other levels of training for Six Sigma?
Praveen Gupta: People add other colors such as yellow belt, brown belt, and white belt as part of their internal implementation process. These are more like awareness level training programs rather than actually being involved in the process improvement projects.
VB: Which Six Sigma project are you are especially proud of leading?
Praveen Gupta: I have done many but my first gave me the feeling of solving a puzzle. And it made a significant difference to the process performance, saved tremendous resources, surprised us in more than one way, and was a great learning experience. It answered the question, "How do you make a good process better?" A lot of companies have good processes and they leave them alone, but we should strive towards perfection.
My first project, which was published in Quality Engineering in June 1990, was completed in 1987/88 and involved improving the plating process at Motorola. We doubled the output capability of the process, eliminated quality inspection, and saved almost half a million dollars. The joy was in solving the problem and putting the pieces together. The Six Sigma process made it visual so it was a magical experience.
I did this project to validate the Six Sigma methodology before buying into the concept. We picked a process randomly – not an easy-to-analyze business process because it already had very few defects – and it generated results beyond our expectations. It was also used as a case study in a Motorola training program.
VB: No doubt cutting out words which begin with 're' such as rework, redo, revise, and remake is a beneficial consequence of Six Sigma.
Praveen Gupta: Absolutely, in the first Motorola project I just described we eliminated inspection and that's a real measure of improvement. If we improve the process and the process capability, verification activities must be reduced. If we are not willing to reduce inspection and tests it means we haven't really improved our process capability.
VB: What are some of the key aspects of implementing Six Sigma projects?
Praveen Gupta: You must enjoy working with people to solve process problems for your company. Six Sigma combines quality improvement and project management approaches. The combination makes Six Sigma a very potent business improvement methodology.
I like the aggressive goal-setting process needed for producing dramatic improvement. I also like the required collaboration and creative insights. All of these components make problem solving an exciting experience.
VB: In the 1980's when you were first developing and implementing Six Sigma at Motorola were you aware of how important it was to focus on people?
Praveen Gupta: We quickly learned that the people who were responsible for the business processes had enough knowledge and expertise that we needed to rely on them for the answers. They were the ones who intimately knew the business and could come up with creative ideas for change and improvement. All they needed was the tools related to the Six Sigma methodology and to be asked.
My background of being the youngest in a large family of 12 siblings prepared me to enjoy working with people. My early odd jobs working experience in the U.S. taught me that people have the answers. If you want to solve a problem faster it's usually best to go to the right person who will have the answer rather than trying to solve it yourself.
VB: So the tip here is try to be a member of a large family because you learn the value of social interaction!
Praveen Gupta: Absolutely. It worked for me. Treat everybody like they are your family. In this context social media appears to be growing your family virtually.
My tip for success is to understand the people at the bottom of the pyramid. The workers are the most knowledgeable about their process. I always listen to machine operators and other front line workers, and it works every time.
VB: We haven't talked about the Six Sigma Business Scorecard. Would you provide a brief description of this scorecard?
Praveen Gupta: The Six Sigma Business Scorecard was developed to assess a business performance for achieving sustained profitable growth. The purpose of this scorecard is to continuously identify opportunities for dramatic improvement, and therefore lead to improving the overall Sigma level for the organization, and thus its profitability.
When I developed the scorecard I was answering the question, "What comes after Six Sigma?" One of the basic tenants of Six Sigma is measure what you value. I developed a whole framework to assess corporate performance in order to get more benefit out of the Six Sigma initiative. The Six Sigma Business Scorecard should motivate the leadership to inspire their employees to engage in constant process improvement and positive change, managers to drive improvement in their department, and employees to strive for innovation in developing new solutions.
VB: So do our readers need to read Six Sigma Business Scorecard in concert with Virtually Stat Free Six Sigma?
Praveen Gupta: I would love them to read it. It should be required reading for leaders!
The Six Sigma Business Scorecard provides answers to help improve a company's performance and, interestingly, this is not accomplished by most of the outdated and historical corporate performance measurements. If these traditional performance measures were so good companies around the world would be less likely to be experiencing their current financial problems.
The Balanced Scorecard was a great breakthrough in the mid 90's and provided some useful measurements but it has not been adapted into the Internet Age and for a Six Sigma environment. The Six Sigma Business Scorecard is a hybrid of the Balanced Scorecard and Six Sigma.
VB: It seems the term Balanced Scorecard causes some people to feel anxious that it is somehow a reporting card, or that there is a lot of work involved in generating the data and therefore an expensive process. What do you think?
Praveen Gupta: The Balanced Scorecard is often used more as a show and tell of having it displayed in a timely manner on the executives' desktops.
Most often little use is made of the information for decision making about business directions and change. It is like having a dashboard without an algorithm, or a car body without its engine. So, I designed the algorithm for the dashboard making it an intelligent scorecard. It's a beautiful tool, and I believe it's the best work I've done. People seem to love it. It can help companies achieve a faster turnaround or easier road to sustaining profitable growth.
VB: Do you have any final advice about how to sustain a Six Sigma initiative in a company?
Praveen Gupta: Most organizations have one of two problems: too much data or unusable data to guide process improvement. If the data are useful the defects per unit (DPU) or defects per million (DPM) can be calculated for each process step and corrective actions taken where there are shortfalls. If limited or no data are available, rather than embarking on a lengthy process of collecting the data an interim step can be taken of estimating process performance based on best management judgment, experience, and feedback from customers.
To deploy a Six Sigma initiative well and to sustain it the leadership must clearly communicate the value proposition to all employees. If this is not clear then it will not have meaning and significance to employees. Once the value proposition is articulated the next step is to create incentives so people can be part of the success and also benefit from their successes. The leaders should demand improvement and ensure that improvements achieved are highly visible. If visible the accomplishments can be celebrated. Without strong leadership commitment not all employees will buy into Six Sigma.
Six Sigma is about quick improvement in a short period of time. Breakthrough improvement and continual reengineering should replace incremental and continuous improvement. Underlying Six Sigma, but often ignored, is the ultimate goal of breakthrough improvement in business processes which are creatively achieved.
It was been an honor to spend a half a day speaking with one of the originators of the Six Sigma methodology. Praveen Gupta is an engineer, expert in statistics and business process analysis, teacher, innovator, humanist, a person who cares about humanity, and a gentleman.
Six Sigma is designed to reduce inconsistencies in business processes, and this is increasingly a competitive advantage because more and more customers expect minimal inconsistencies from the stated targets and functional performance levels. The author advises, "To sustain the Six Sigma initiative, the corporation must create a culture that encourages a passion for excellence, motivates employees for continual aggressive improvement, and engages leadership in listening to employees." This is sound advice.
Praveen Gupta identifies the following as critical success factors for implementing a Six Sigma initiative:
Praveen Gupta's Bio:
Praveen Gupta is a Director at the Center for Innovation Science and Applications at IIT School of Applied Technology, and an adjunct faculty for teaching Innovation classes.
Praveen is an internationally recognized thought leader in Process Management, Corporate Performance, Six Sigma and Innovation. He is the author of many books including Business Innovation in the 21st Century (2007), The Six Sigma Performance Handbook (2005), and Six Sigma Business Scorecard (2003). He has conducted workshops and given keynotes frequently on business innovation. Praveen is the founding Editor of International Journal of Innovation Science, and co-editor of Global Innovation Science Handbook (2013).
Praveen is President of Accelper Consulting, an Operations Management consulting firm. He is leading the innovation change through education in innovation in academia and industry. Praveen has worked with over 100 small to large clients. His innovation training is being offered by AIAG (Automotive Industrial Action Group) starting 2012. He has developed Certified Business Innovator and supporting training programs offered by IIT for executives and professionals.
Praveen Gupta has a Bachelor of Science in Electronics and Communication from Indian Institute of Technology in Roorkee, and a Master of Science in Electrical and Computer Engineering from the Illinois Institute of Technology in Chicago.
Praveen Gupta is the author of The Innovation Solution; Making Innovation More Pervasive, Predictable and Profitable (2012), Business Innovation In the 21st Century: A Comprehensive Approach to Institutionalize Business Innovation (2007), ISO 9000: 2000 An Implementation Guide (2006), The Six Sigma Performance Handbook (2004), and Six Sigma Business Scorecard: A Comprehensive Corporate Performance Scorecard (2003). He is also co-author of Stat Free Six Sigma: Focusing on Intent for Quick Results (2007), The Six Sigma Green Belt Handbook (2009), A Complete and Balanced Service Scorecard: Creating Value Through Sustained Performance Improvement (2008), Improving Healthcare Quality and Cost with Six Sigma (2007), Six Sigma for Transactions and Servicee (2004), The Six Sigma Black Belt Handbook (2004), Six Sigma Business Scorecard: Creating a Comprehensive Corporate Performance Measurement System (2003), Six Sigma Deployment (2003), The Role of Board Members in Venture Capital Backed Companies: Rules, Responsibilities, Motivations of Board Members—From Management and VC Perspectives (2004), and The Ways of the VC (Inside the Minds) (2003).
The Innovation Solution is an abridged version of Business Innovation.
His published articles include "Innovation: The Key to a Successful Project" (Six Sigma Forum Magazine, August 2005), and "Innovation and Six Sigma" (http://www.qualitydigest.com, December 2004).
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