If you’re like 99 percent of all businesses today, you’re losing 25 to 40 percent of your profit margins to mistakes, rework, errors, omissions, defects and delay. Spending that kind of money to deal with, remedy, resolve and mitigate problems does more than just drain your bottom line; it also adds undo stress to your employees, customers and stakeholders.
Even if you’re among the 1 percent of companies that has perfect employees who never make mistakes and perfect processes that are error-proof, chances are there’s still some sort of daily crisis management you wish didn’t exist. Perhaps you have too many customer complaints, too much firefighting, or too much employee heroism on a daily basis.
No matter what your company’s particular challenge is, consider these questions: “If you had 25 percent more staff, what new and interesting customer-serving projects would you undertake? What new products or services would you create? What possibilities would you embrace?” That’s the power of Lean Six Sigma – having more profit from streamlining your existing processes, which will then free up resources to do the things you simply don’t have time to do.
Lean Six Sigma is a proven methodology for reducing cycle time, defects and delay, and for boosting profits. It’s a results-oriented, project-focused approach to quality, productivity and profitability. Lean Six Sigma has simple goals, such as:
- 30 to 60 percent reduction in turnaround time
- 20 to 40 percent reduction in floor space requirements
- 20 to 30 percent improvement in equipment capacity
- 20 to 50 percent improvement in productivity
- 30 to 60 percent reduction in inventory
These reductions and improvements translate into cost savings, profit growth and competitive advantage.
Unfortunately, many companies have barriers that keep them from executing a Lean Six Sigma approach. What follows are some of the common barriers to executing Lean Six Sigma and some suggestions on how to overcome them.
Barrier No. 1: People don’t like being measured.
One of the secrets to getting better, making improvements and increasing customer satisfaction is to realize that your employees don’t like being measured. Typically when companies measure their employees’ work or productivity, they use the information to reprimand employees or make them wrong. While measuring key factors in your company can indeed be useful, you need to use the metrics you uncover to identify how the processes or systems you have in place fail, not how your people fail.
For example, a call center may measure how long their customer service reps are on the phone with customers. The stated goal is to complete all calls in two minutes or less. As employees strive to stay within the parameters of that measurement, they don’t give customers all the information they need, resulting in the customer calling back multiple times. In this case, the number of customer callbacks may be a more important metric than how long employees spend taking care of a customer. After all, what good are short phone calls if you have too many repeat phone calls?
Therefore, look at what you’re measuring and decide if it’s providing useful information. Is what you’re measuring addressing your customers’ real concerns? After this analysis, you might need to totally change what you’re currently measuring. Or, you might find that you are measuring correctly, but you shouldn’t use the information to blame your people – blame your process instead, and then change the process.
Barrier No. 2: Having a “macho man” complex.
Sometimes managers think they know all the right answers. These “macho men” (and women) of the organization think they’re golden. They don’t want to be driven in a direction to improve because they think they’re doing a great job already. They believe they’re great managers and don’t need to change. To them, changing something is an admission that something they did or implemented didn’t work. These are the people who truly hold a company back.
To rid this mentality from your managers and employees, you need to let them know that all techniques fail at some point for a variety of reasons – a changing economy, a new industry development, a more diverse workplace, etc.
Explain that all companies need new processes, approaches and techniques to find the hidden goldmine in the company. Help them realize that the goldmine is already there in the business – they just can’t see it the way they’ve always been looking at it.
Barrier No. 3: Getting achievers and problem-solvers to work together.
You can group all of your employees into one of two categories: Achievers or Problem-Solvers. Here’s the difference: If you ask people what’s important to them about their job, they will say one of two things:
1) It’s about what I can do, achieve or accomplish (the Achievers), or
2) It’s about avoiding difficulty, solving problems and avoiding mistakes (the Problem-Solvers).
Achievers are not cut out for finding and fixing problems. Their focus is to sell more products or services and to grow the business. Problem-Solvers, on the other hand, are great at fixing problems, but they don’t have a visionary mind-set. Without a problem to solve, they lack direction. As a result, in many companies there’s conflict between the two mind-sets.
Therefore, you need to encourage the Achievers to go to the Problem-Solvers to help reach goals. Likewise, you need to encourage the Problem-Solvers to look to the Achievers for direction (although the Problem-Solvers will be the ones who ultimately solve the problem).
To identify the Achievers and Problem-Solvers in your company, ask people two simple questions:
1) What’s important to you about your work? And,
2) Why is that important?
Let’s suppose you ask everyone the first question and they all answer that serving the customer is important. When you ask them why that’s important, Achievers will give answers like, “We get more business,” “We get better raises,” and “We gain a greater market share.” To them, it’s all about achieving and what they get. Problem-Solvers will give answers like, “We avoid having irate customers on the phone,” “We don’t have as many warranty claims,” and “We don’t have to do rework.” To them, it’s all about avoiding pain. Once you know which category everyone fits into, you can bridge the gap between the two mindsets so everyone works together efficiently.
Lean Six Sigma for Your Future
Finally, with all the barriers removed, be sure to give your employees permission to make things better. While the leadership team should ultimately pick the things that need to be improved, let your employees know that they have permission to change how those aspects of the business work. Give each employee ample face time to help ensure that they come up with good solutions everyone can live with. Nine times out of 10, their suggestions will amaze you.
Unfortunately, many of today’s companies are addicted to fire-fighting and crisis management. As such, they tend to worship the “hero” who is always saving the day. But when you overcome these common barriers and effectively execute Lean Six Sigma in your company, you don’t have fires anymore. Your business just runs the way it should. It’s like a village where everyone contributes to the village’s overall well-being.
When you make these changes happen in your business, you’ll experience a reduction in defects, increased quality, financial savings, and a predictable and manageable workload. At that point, you’ll be able to reclaim all those lost profits and grow your company to new heights of success.
About the author:
Jay Arthur, the KnowWare Man, works with companies that want to double their profits by plugging the leaks in their cash flow. Jay created the “Lean Six Sigma System”, a collection of audio, video, books and software. He is the also the author of “Lean Six Sigma Demystified” and created the “QI Macros SPC Software” for Excel. For information about how to plug the leaks in your cash flow, sign up for free lessons online at https://www.qimacros.com/excel-spc-software.html or call 888-468-1537.
