4 MINUTE READ

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.

firefighting process

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:

  • Increasing competition

    • 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 profitability

  • 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:

  1. Management principles and philosophy

  2. Methodology

  3. Tools

 

Lean Management Principles

 

There are 14 management principles used by Toyota which have evolved over time.  These are the foundation behind why you want to improve processes. 
 
Without this foundation, you push change on people. You improve processes because your boss, parent company or investors made you.   You don’t improve them because you believe it’s the best way to solve problems.
 
Any manager can push change but great leaders inspire others to greater achievements.

lean six sigma philosophy

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:

  • Habits

  • 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 six sigma DMAIC Guerrilla Analytics Private Equity Consultants

 

Lean vs Six Sigma vs Lean Six Sigma

 

Both Lean and Six Sigma has a long history that started in manufacturing.

lean vs six sigma process improvement

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.

 

process wastes DOWNTIME

 

Lean Tools

 

There are over 70 different tools in Lean Six Sigma.  You don’t need all of these tools.  The easiest to use and fastest to learn tools are ones you may have heard of:

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:

  • Sales

  • Marketing

  • Finance

  • Startup

  • 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:

  • executives
  • 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)

lean six sigma organization structure

I get a lot of questions about certifications for belts.  Belts are like any other certification, depends on who does the certification.
 
It’s pretty common to see someone certified by a previous company. You don’t know if this training applies to your company so focus on their results instead.

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%.

Ashley Asue Guerrilla Analytics Private Equity Consultants
At 26, she was asked to create a new department to grow their Fortune 300 company using Lean Six Sigma continuous improvement.
While working with consultants and experts, she saw a common thread among their challenges and failures.
With this insight, she created a custom process to create a high-performance company.
As the only CPA and business architect in the US, she helps others use creativity instead of cash to efficiently build their businesses.