Lean Six Sigma is one of the most demanding, comprehensive and data driven methodologies for process excellence and business improvement, so it can be unclear why some are more successful than others. If everyone has the same toolkit, surely we should be seeing the same results. Lean Six Sigma is all about standardisation after all.
And while the recent PEX Network’s 3rd Biennial State of the Industry Report found that the majority of process excellence initiatives are successful, some 13.5 per cent are considered unsuccessful or highly unsuccessful.
So what are the factors that influence failure? And what can businesses do to make their initiatives highly successful?
Set the right objectives
Setting the right goals is invaluable to the future success of a process excellence initiative. According to the PEX report, almost two-fifths of businesses consider the purpose of their process excellence programme to be a way to help the organisation deliver its strategic objectives. A similar number want to use it to improve customer satisfaction through better quality and efficiency.
Although the majority of process excellence programmes were considered successful, around 5 per cent were considered ‘highly successful’. These can be viewed as the best in class.
Interestingly, of these best in class functions, more than half had aligned programmes with strategic objectives and a fifth of said customer satisfaction was their main motivation. This means around three-quarters of the very best process excellence functions were motivated by strategy and end-users.
Don’t make cost the only factor
That said, cost savings are a key motivation for all process excellence functions. However, the report illustrated the importance of not making this the sole focus for Lean Six Sigma projects. Less than a quarter of those polled by the PEX said they considered the purpose of their programmes to be cost cutting.
Indeed, just 5.7 per cent of the best in class, highly successful, outcomes were motivated by cost cutting. More than a third of the highly unsuccessful, the industry laggards, had this as their core incentive for process excellence.
In all cases the primary measure of success was cost savings – illustrating that broader, more strategic goals for process excellence can increase the potential for positive financial outcomes. Although this seems counterintuitive, Mark Nestle, Director of Global Productivity at Praxair, explains:
“Cost cutting alone is only part of productivity. If you downsize the business you may look good from a short term cost perspective but eventually you shrink until you have no business! You’ve got to be able to grow revenue, cut costs, automate, and make things more reliable and simpler.”
It’s not just objectives that impact the chances of success, however. Those businesses that made a long term commitment to process excellence were also more likely to see their projects become increasingly successful.
More than a third of best in class functions were in businesses that had been dedicated to process excellence by way of a formal programme for 11 years or more, over a quarter had been running the functions for seven to ten years.
But, while this was a factor, it does not mean that only those who have been dedicated to Lean Six Sigma and other methodologies for a long time were capable of the best in class results. Around five per cent of best in class, highly successful, functions had been in place for less than a year.
Make it immersive
One of the biggest trends found in the report was the realisation that the toolkit for process excellence is expanding. Businesses can no longer rely on a handful of Belts utilising traditional skills associated with specific methodologies. Now organisations want holistic change, and that means a whole new focus on soft skills like change management, coaching, customer experience and strategy development.
Rajan Nagarajan, VP Business Transformation at Kraft Foods, said:
“Unless you worry about changing the hearts, souls and minds[of your employees], it’s going to be very difficult to achieve sustainable change.”
The most effective programmes – those that deliver the greatest cost savings – rely on long-term investment, objectives aligned with the wider business goals and, crucially, a change in the culture to one of continuous improvement.
What has helped make your Lean Six Sigma programme successful?