10. Organizational improvement - Six Sigma approach

As a manager, one of the critical part of the job is to identify and fix the problems which can improve business/customer satisfaction. It is important for you to involve your team in identification and resolution of the problems. This would ensure their long term commitment towards the identified mission.

There would be numerous problems that your team members would have identified individually which they may want to have improvement on. As a manager, you would first have to find the problem(s), which has the highest impact to the business success. Solution to each problem can be treated as a Project. Here is a systematic approach that can be used for problem solving at a team level, divided into 5 phases:

1. Problem Definition (Select the theme of the problem):

• The theme has to be selected by the team and you should act as the moderator. This ensures team commitment. Remember, that the theme should have an impact on the business, i.e. the goals of your organization.
• It would not be easy to arrive at a consensus on the theme selection, so you can start with narrowing down to about 5 themes. I leave the decision up to you as to how you come to such a list, but I would propose usage of <>.
• These themes should then be put through the "Test of Significance", which can be done with a technique as simple as voting.
• Research on "Theme Selection Matrix"
• Deliverable: Project Charter containing the Project theme.

2. Measurement of the problem:

• Collect data: Collect data on all aspects of the theme and the expectations/ valid requirements of the customer.
• Interpret the data: Measure the gap between "What Is - Current Situation/Baseline" and "What should be - Reasonable/Valid Requirements of the customer". This is also known as "Quality Indicators"
• Deduce the problem statement: State the cause not the effect, i.e. 'what' is wrong not 'why'; focus the gap identified; measurable - 'how often', 'how much', 'when'; specific - should not be an ambiguous or a broad category; positive - not a question; focus on the pain - impact on customer. AVOID: Why; Lack of; Due to; etc.
• Derive the mission statement: The Goal that the team wishes to achieve. Should take into consideration the constraints of the project - Time, Budget, Resources etc.
• Deliverable: Problem Statement and Mission statement
  

3. Analysis:

• Identify the root cause of the problem till you get actionable root causes. Do not look at the symptoms. You can use any technique for this but I would propose usage of Cause and Effect Analysis
  
• Select the root cause with maximum impact
• Deliverable: Root Cause of the problem
  

4. Improvement:

• Develop/brainstorm solutions (countermeasures) attacking the root causes
• Measure their effectiveness in eliminating/reducing the root cause, at an optimal cost i.e. which requires minimal changes in existing setup
• Create an action plan which answer 'who', 'what', 'when', 'where' and 'how'. Also add the aids required and constraints, if any
  
• Get management approval
• Implement the solution(s)
• Measure if the root cause has been reduced/eliminated after solution implementation
• Check if the mission statement has been met after countermeasures have been applied, using Quality Indicators
  
• Deliverable: Proposed solution approved and implemented. Achieved mission statement
  

5. Institutionalization:

• Prevent the problem and it's root cause from recurring, by standardizing the solution as part of daily work
• Train the participants of the process/workflow 
• Document the Learnings
• Deliverable: Revised process/workflow; updated Learning Diary

At what level in the organization are the problems best solved:

Following factors determine the level at which the problem should be solved:

1. Solution at the source of the problem
   
2. Shortest path of communication
   
3. Data not distorted
4. Best for future prevention of the problem
5. Least 'political' involvement
6. Most timely
7. Lowest cost
8. Provides direct satisfaction

What Analytical tools you can research and use:

1. Checksheet: Gather variety of data in a systematic manner.  Get answers to questions : What, Where, When, Who, How. It does not venture into Why.
2. Stratification: Breaking the whole into smaller related sub-groups.
   
3. Histogram: To check the dispersion or spread of the data at hand. Caters to just one variable. Similar to a column graph but having 6-12 touching bars.
4. Scatter Diagram: To show the relationship or correlation (positive or negative) between two variables. Driving factor is mostly on the X Axis.
5. Graphs: Bar Chart, Column Chart, Line Graph (Solid lines for actual data and dotted lines for projections), Pie Chart, etc.
   
6. Pareto Chart: Is a search of significance. Pareto Analysis implements the famous 80-20 rule. Bars are arranged in descending order from left to right.
7. Cause and Effect Analysis (Diagram): Used for getting to the root cause of a problem. Ask Why till you get absurd, or political answer or no answer at all. The diagram is also known as Fish-bone diagram/Ishikawa diagram. From left to right it reads, c3 has caused c2, which has caused c1 and so on. 
8. Countermeasure Matrix: The column structure is: Problem; Root Causes; Counter Measures; Practical Methods(Task level); Effectiveness;  Feasibility;Overall(Impact=Effectiveness X Feasibility); Action(Yes/No).
9. Control Chart: A Trend chart (typically line graph) which tracks an ongoing process to see if it is within the limits or is under control. Typically X Axis tracks time and Y Axis tracks the factor being studied. The factor is plotted for average, Upper Control limit and Lower Control limit. When fluctuations occur at a non-random pattern or go outside the control limit, it creates an opportunity for improvement.

While dealing with data, you need to understand the kind of data:

1. A Zero-base problem - Ideal situation is to reduce it to Zero. e.g. Defects, troubles, error, calls.
   
2. An increase problem - e.g. Sales, reliability.
   
3. A reduction problem - Should be less, but we cannot do without. e.g. Inventory, cost, staffing.
   

What Team management tools you can research and use:

1. Theme Selection Matrix: The column structure is: Themes; Impact on customer; Scope of improvement; Total Score (Impact X Scope of Improvement).
2. IN/OUT SCOPE: Answer What, When, Where, Who for the scope.
3. Elevator Speech: To align the team to bring common understanding of the purpose. Each team member has to write and speak out a short note on what is involved in the project and how the success will look like, as if he will meet a key stakeholder in an elevator for 90 seconds. Team members brainstorm and arrives at a common final speech which is rehearsed by each member in front of the team.
4. Force Field Analysis: To assess the forces in the external and internal environment that will make the change (project implementation) last or the ones which will hinder the change in the long run. Working space is divided into 2 parts - Enablers & Restraints and the marked as high, medium and low. Match the enablers and restraints which balance each other and prepare the action plan for the remaining restraints. Unaddressed restraints become the constraint of the project.  
5. Activity Chart: It has the following columns: S.No.; Activity; Responsibility; Support; Deadline; Actual Date of completion; Comments.  
6. Story Board
7. Cost Benefit Analysis

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Derived From DMAIC (a basic component of the Six Sigma methodology):

DMAIC was developed by Edwards Deming and is useful in improving an existing business process to reduce defects. The DMAIC methodology includes five steps including; Define, Measure, Analyze, Improve and Control. Here is some information regarding each step.

Define: Define is the first step in the process. In this step, it is important to define specific goals in achieving outcomes that are consistent with both your customer's demands and your own business's strategy. In essence, you are laying down a road map for accomplishment.

Measure: In order to determine whether or not defects have been reduced, you need a base measurement. In this step, accurate measurements must be made and relevant data must be collected so that future comparisons can be measured to determine whether or not defects have been reduced.

Analyze: Analysis is extremely important to determine relationships and the factors of causality. If you are trying to understand how to fix a problem, cause and effect is extremely necessary and must be considered.

Improve: Making improvements or optimizing your processes based on measurements and analysis can ensure that defects are lowered and processes are streamlined.

Control: This is the last step in the DMAIC methodology. Control ensures that any variances stand out and are corrected before they can influence a process negatively causing defects. Controls can be in the form of pilot runs to determine if the processes are capable and then once data is collected, a process can transition into standard production. However, continued measurement and analysis must ensue to keep processes on track and free of defects below the Six Sigma limit.