The Six Sigma Shotgun
By Jack & Suzy Welch
Do you still think it is necessary to implement Six Sigma throughout an entire organization? Can't it just be spot-applied to the routine processes where it belongs? — Arthur Mok, Cambridge, Mass.
In a perfect world, your question would make perfect sense. Six Sigma, the intensive quality program used by thousands of companies around the world, should just be selectively applied to the kinds of routine operations that benefit from its effects. Credit-card processing is a great Six Sigma target, for instance, as are many manufacturing activities, while creative endeavors such as producing TV shows and crafting one-off investment banking deals most definitely are not.
So why do so many companies still stuff Six Sigma into every nook and cranny?
Because they have to, especially if they're large operations. Small companies, because of their relative informality and ease of communication, can sometimes implement change programs here and there as needed. But when it comes to introducing radical change across divisions, departments, layers, and even countries, employees rarely respond with gusto. They don't say: "Hey, this new program that's going to screw up my job sounds just great! Bring it on!" Instead, they mutter: "Here comes the new flavor of the month. If I can just ignore it long enough, it will pass." Such resistance is natural; sometimes it can even be justified. But if a company lets those responses play out, it will get nothing in return.
By contrast, consider what happened when General Electric (GE ) decided to implement Six Sigma in 1995. The rollout had plenty of bumps, but the company made sure the initiative wasn't one of many floating around. Similarly, a strong case for it was made over and over again. Everyone was told that if the company could reduce its ship-and-fix mentality there would be enormous market share opportunities and significant cost savings. That's why it was urgent to install Six Sigma, a statistical approach originally developed at Motorola (MOT ), to wring out variation and ensure that products were built right the first time and delivered according to expectations.
Now, when we say "everyone was told," we don't mean a handful of senior executives stood on a stage once or twice a year and intoned: "Quality is good. We like quality. Let's all work toward better quality together." No, we mean managers throughout the company were in something of a frenzy. Their message was more like: "Six Sigma is all that matters. You can't get promoted or get a raise or stock options unless you become involved in a project."
Extreme? Of course. And yes, that initially intruded on the activities of employees it shouldn't have, like marketing types designing an ad campaign. It also spawned more "look-what-we-can-do!" presentations than were necessary. Indeed, in Six Sigma's early days, the projected gains put forth in these kinds of presentations were roughly equal to the free world's gross national product. Six Sigma did end up delivering billions of dollars from market share gains and productivity improvements, but not that much!
Yet if a company has any scale, we'd still make the case that Six Sigma demands a total-organization approach. Yes, sometimes you make more noise (and work) than necessary, but when it comes to radical change, if you want to move the needle even a little, you have to holler a lot.
Our company hires the best and brightest, mainly right out of college, to join our sales organization. We then provide them with world-class training for three to five years—only to lose them to our competitors one after another when it's done. What are we doing wrong? — Anonymous, Atlanta
Our best guess is that your great talent is "graduating" from your great training program into a company that hasn't put nearly enough energy into great job content. After all, top performers who are all fired up to conquer the world—or at least the marketplace—don't want to be told they have to wait in line before they can make an impact. Or that they're being placed in a small job that will lead to a somewhat less small job, and so on. They want to be told that their future will come as fast and be as big as they can make it. Could it be your competitors are saying that more loudly than you are?
Don't get us wrong. Talented young people can't expect to burst out of a development program into a corner office. But unless you give them a way to move up quickly, with fun and challenge along the way, you'll have to be satisfied with something it seems you already have: a reputation for being the best training ground around.
Jack and Suzy Welch look forward to answering your questions about business, company, or career challenges. Please e-mail them at thewelchway@BusinessWeek.com For their podcast discussion of this column, go to www.businessweek.com/search/podcasting.htm