Growing Your Business the Six Sigma Way
The well-known philosophy for pleasing customers and growing sales makes sense even for small businesses.
As a manager or executive at a small business, "Six Sigma" is probably not on your to-do list. Yet this proven methodology for quality improvement, developed at Motorola in the early 1980s and popularized by General Electric, provides a powerful framework for delivering better products and services and for being more efficient overall.
"It's really about breaking things down into steps, which is something most small companies don't do very well," says Rose Kasianiuk, president of Calgary, Alberta-based RK Business Solutions Inc., which provides marketing, process and project management services to small businesses. Kasianiuk, a former GE manager who holds a black belt in Six Sigma, says that small businesses without a process discipline are more likely to waste time and mismanage projects.
How a Six Sigma Mentality Can Help Your Small Business
Adopting a process orientation can also bring value to employees and customers, and it starts with documenting who does what, according to Kasianiuk. For example, if your business wants to implement a CRM (customer relationship management) system, first create a detailed map of sales and marketing processes. With an understanding of how these front-line workers do their jobs, you can establish systems that match your business. "There are so many options in CRM," Kasianiuk says. "The danger is that a small business will get something too complex with too much reporting. If the salespeople don't do the data input, the system will do nothing for you."
Another benefit of Six Sigma thinking is that it encourages people to work together better, according to John Wilkerson, vice president and consulting practice leader with Bellwether Services, an Atlanta-based operational consulting firm for small and midsize organizations that incorporates lean manufacturing and Six Sigma approaches with clients. For example, a federal contractor was experiencing problems getting paid by its client, so it hired Wilkerson and team to determine the cause. Bellwether analyzed the contractor's processes and discovered communications gaps among sales, operations and the client, resulting in unmet expectations. To prevent future issues with payables and customer delivery, the contractor changed its entire project management process.
What gets in the way of any sort of process improvement initiative is time. "Most small businesses are pretty lean, and employees are fully engaged in their jobs, so putting together a process improvement is really hard," Kasianiuk says. And if your company is in crisis mode, it's best to forget the exercise altogether until business becomes more stable, Wilkerson advises.
If you're able to get support from senior management -- a critical first step -- here are some ways you can start integrating Six Sigma tactics into your business:
Collect as much data as you can, and categorize it. "A lot of data to determine your challenge will be in your current systems, such as Excel," Wilkerson says. At GE, the formula for collecting data around a process covers the following categories, says Kasianiuk: Who are the suppliers, what are their inputs, what is the process, what are the outputs, and what is the impact on the customer?
Understand your company culture. Are your people individualistic or collaborative? A company of individuals may not care, nor understand, how to work with others; you'll need more time and incentives to gain their participation in process improvement.
Get more clarity with software tools. Use a homegrown system or something like Minitab -- quality-improvement software that graphs challenges statistically and provides useful details during a project. "We use this for every engagement," Wilkerson says.
Commit the necessary time, staff and resources. Identify a point person inside the company who has a strategic viewpoint on your business, Wilkerson advises. A process expert can come in and help educate the troops before your first project, or you can have someone inside your company get formal training. You'll also need to support any employees significantly involved in a quality-improvement program with temporary workers who can take on some of their regular workload, Kasianiuk suggests.
Above all, focus on the customer. The point of any process improvement methodology is to improve your output to satisfy customers, and therefore grow your business. Impact on the customer should be a critical part of any process documentation.
Six Sigma or any other process improvement methodology is in itself a long-term effort. Don't expect results tomorrow, or even next month -- but regular commitment to quality improvement will pay off over time. "What you will get long-term in business results will more than outweigh your investment," Kasianiuk says.
Sidebar: Six Sigma Defined
Six Sigma measures a process in terms of defects or errors. The ultimate goal is to reach a level of only 3.4 defects per million opportunities. From a benefits standpoint, Six Sigma can help you run your business or organization more efficiently and profitably. Developed at Motorola and deployed broadly under famous CEO Jack Welch at General Electric, it focuses on reducing waste, eliminating defective products and fixing inefficient services, and can help increase customer satisfaction and empower your employees.