September 2003  

Vol. 5, No. 9


Six Sigma and More: 
Setting goals, arbitrary and otherwise.

by David R. Schwinn

"States fail child welfare test" was a headline in a recent edition of the Jackson Citizen Patriot. The article noted that of the 32 states evaluated against the Federal Child and Family Service Reviews, none passed the reviews. This is a new, rigorous test of each state's ability to protect  children from child abuse and to find permanent homes for kids who often languish in foster care. If the states do not pass the reviews soon, they will lose federal funding.

This reminds me of Dagwood Bumstead, who once said something like, "It sounds like a great idea until you think about it." A likely net result, of course, will be a nice reduction in the federal deficit, states that are in even more financial trouble than they are already, and little or no improvement in the fate of disadvantaged children. How often do we do things like this with schools and other public sector grantees? No wonder W. Edwards Deming advised, "Eliminate numerical quotas for the workforce and numerical goals for management."

Of course, we never really do things that are this absurd in business—right? We never set arbitrary goals that compare the performance of department A against the performance of department B and, finding department A's performance a little better, channel a little more of next year's budget to department A and a little less to department B. This process, of course, helps increase the performance gap. This cycle continues until department A is doing well, but wasting untold resources because it cannot possibly spend its entire budget intelligently. At the same time, department B is rendered almost useless, if not extinct. Another re-organization must follow.

By understanding that the difference in performance was due to natural variation, we could have gone on to intelligently improve the system in which both department A and B were embedded. Or, had we understood that department A or department B was outside the system, we could have used that information to change the whole system. Unfortunately, what we “never really do” has become commonplace.

The implications for Six Sigma are obvious. Goal setting should be done participatively. No, I mean really participatively. This means participation where the players don't think their next promotion is dependent on the aggressiveness of their self-proclaimed goals whether they make them or not; participation where the players consider the unanticipated negative effects on themselves and others of achieving their goals.

Goal setting cannot be intelligently done without concurrently developing the plans to achieve those goals. And the resources to achieve those goals better also be in place.

Here's one more tool that you might find useful for goal setting. Last week I was reminded of Robert Morris Associates (RMA). Remember all the ratios we calculated over and over again in accounting and finance? Well RMA is now Risk Management Associates. In the class I attended last week, we were encouraged to check all of our company ratios against the RMA standards for the median firms in our business. Fine. But this is Six Sigma, so we could also check how we're doing against best in class. Your accountants have probably already done all the work and are waiting for someone to listen to them. If not, enlist their assistance and get the word out. How you stand financially against your competition may be a useful way to prioritize your goals. I can't think of a single financial ratio that a Six Sigma approach could not be used to improve.

As always, I welcome your thoughts. I'm at support@pqsystems.com

 



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