As a business owner, I want to build a great business. As a consumer, I want to support great businesses. Sometimes entrepreneurs or executives forget to step out of that role and be only a consumer.
We’re biased to our own business process because we’re in it every day.
We can’t see the forest through the trees then we have to build a system of processes to do it for us. It’s the most effective problem solving because you solve the root cause – not the symptom.
It’s the most efficient way to solve problems because you use data to speed up change. When we build processes we’re able to align and inspire change.
WHY YOU NEED LEAN SIX SIGMA
Building a business is overwhelming. Sometimes it’s easier to start with what you don’t need to do. You don’t need another management fad in today’s Harvard Business Review article.
You need to listen to your gut because it’s right. It’s telling you to get more feedback from your customers and employees. Because with every new insight, you make more profit and find better talent.
How you do this is through Lean Six Sigma.
Lean Six Sigma does NOT…
Focus on cutting expenses
Decrease jobs = fire employees
Blame people for problems
Lean Six Sigma is a change in mentality. It’s about realizing you have process problems – not people problems. You can put the most talented person into a bad system and they will fail.
Firefighters don’t rush into a burning building and start spraying water. They “read” the fire. They assess the situation to understand the risks and how to mitigate them.
The most “talented” people assess a situation and adjust their process to get to their goal. They “trial and error” to learn what works.
Lean process improvement accelerates the learning by reducing the “error” piece. Giving you more time to “trial”.
A Business Case for Process Improvement
The most important part of change is inspiring it. You need a solid why people can get behind. Sometimes change is all about timing. There are a few common timing outside factors that may be your why for change:
- For quality customers
- For high-quality employees
Growing fast – Want to self-manage instead of adding layers of management
Or you’re in control and you’re triggering the why by raising the bar:
Increase cash flow
Starting a startup or developing a product – want to get to a profitable product faster
Scaling a business – don’t want capital or outside investment
WHAT IS LEAN PROCESS IMPROVEMENT
When you do lean process improvement wrong it’s because you set the wrong goal. Creating a business process focused culture has common benefits or outputs.
Your goal is going to be specific to your company or firm.
Business Process Improvement is…
Business process management (BPM) is the newest term for Lean Six Sigma. BPM includes improving processes but no one seems to know how to do well. Most BPM projects result in making and managing process maps.
BPM misses the mark because people treat it as a tool instead of a culture transformation plan built on:
Management principles and philosophy
Lean Management Principles
Lean Methodology = DMAIC
Now that you’ve nailed down your vision you can get into tactics. This is the how behind the why. Every team member will use this same method to work towards your company vision.
This is what a high-performance culture does. It has clarity on where they’re going and they’re all working towards the same vision together. If you break down a high-performance culture into 2 things:
A system to refine them
DMAIC is both the habit and the system because it gets teams to:
Align and agree on what the problem is
Don’t waste time analyzing the wrong thing
Don’t solve using opinions
Lean vs Six Sigma vs Lean Six Sigma
Both Lean and Six Sigma has a long history that started in manufacturing.
The two were combined about 20 years ago to focus on predictable excellence. They both use the voice of the customer to understand what the customers value.
In Lean, we remove what customers don’t want (waste) to get to their value faster. This results in higher profits and greater customer lifetime values.
Like any tool is only as good as the process you have to use it. Focus on DMAIC, PDCA or some other version of data based process waste removal and you’ll get your results.
WHO USES CONTINUOUS IMPROVEMENT
Most of fortune 500 use Lean Six Sigma. As you move up the ladder to the Fortune 100, the percentage increases to over 80%. Continuous improvement is both industry and company agnostic. We use your goal and reverse engineer a process to get there.
You can use continuous improvement if you’re in:
Agile product development
LEAN SIX SIGMA ORGANIZATION STRUCTURE
To implement a Lean Six Sigma culture you need a department and the support of everyone else. The team includes unofficial members like:
- project champion or sponsor
- project owner
As well as official department members:
- black belts
- green belt
- baby belts (yellow belt, white belt, whatever your company wants to use belt)
HOW DO I START IMPROVING PROCESSES
A common problem is not knowing where to start. A great way to figure this out is to let the data tell you. Your financial statements are a great data source.
You’ll need a target KPI before you look at your balance sheet or profit loss statement so look at your competitor’s performance or your own strategic targets. These KPIs should answer the questions, “Should we have more cash?” “Are we spending too much on marketing or not enough?”
There are companies who start with a simple, emotional problem because it stops the bleeding and gets the culture changing. A good consultant will help you figure out which data to collect as your next step.
Whatever you do, improving 5% now is better than improving by 0%.