Sigma and More:
muses about jobs
David R. Schwinn
I recently led a
workshop on Six Sigma Strategic Planning at the annual American Small
Business Development Center conference. When the conversation
with participants turned to involving all employees in generating ideas
necessary to achieve Six Sigma targets, I was reminded of the early
continuous improvement planning we did at Ford World Headquarters in
the early 1980s.
At those sessions, we anticipated that employees’ improvement
ideas would lead to considerable cost savings due to less rework. Back
then, asking employees for ideas was highly innovative. Nonetheless,
it seemed like a good idea--until we realized that the result would
be laying off the very people who gave us the improvement ideas.
We concluded that this would not work – at least not for long—something
that seems pretty obvious today, but at the time, this whole line of
thinking seemed fairly transformational.
So we set about trying to figure out how to solve that dilemma.
First, we thought that if we did a more consistent job of meeting customer
expectations, sales would improve. Although we were a little skeptical
about that projection, we did, in fact, end up taking significant market
share from our nemesis, General Motors. We also noticed that most of
our costs were in purchased goods and services. Maybe the necessity
of laying off employees to gain the cost savings we needed might not
be as drastic as we originally thought. Finally, we realized that any
savings we needed would be taken care of by taking advantage of our
natural attrition rate and by simply not hiring replacements.
Taking advantage of attrition would require a lot of retraining, but
we thought it would be worth the effort. So we committed to the
union and the employees that no one would be laid off as a result of
our continuous improvement effort. Eureka! We had an approach
to improving quality and reducing costs without significant layoffs.
We all know that conditions are different today.Your competitors may
be improving too, at a rate that provides you with no edge from the
customers’ perspective. Your current costs may be much more employee-related.
Your natural attrition rate may not be adequate to achieve the savings
you need. We have also learned since then that the diminished hiring
associated with savings through attrition may begin to nurture a culture
with fewer new ideas and less willingness to take risks. So those
strategies from the 80s may not work so well after all. But one thing
remains the same. People will not provide improvement ideas that are
likely to result in loss of their income.
Another change has occurred since the 80s. Globalization has intensified
the export of jobs. Sending jobs overseas may seem to be a necessary
strategy for survival, but it entails some risks that a Six Sigma attitude
can reduce. Those risks were raised recently in an organizational ethics
class I teach. I am blessed to have several international students in
the class. They continually provide a perspective I don’t find
elsewhere. Our discussion of the impact of exporting jobs from rich
to poor nations naturally flowed toward the issues of child labor, inhumane
working conditions, and slave-like working agreements found in some
of Third World countries where these jobs are relocated. Besides
the pain to all of the workers involved, some of the companies, such
as Nike, have paid a price, at least in public relations. But one of
my students pointed out a risk that isn’t quite so obvious. If
Third World workers are paid too much, the results could be equally
devastating. In countries with 60 percent unemployment rates, for example,
people will literally kill for a job that gives them enough money to
feed their families.
So think about the implications of Six Sigma for jobs. If you can get
the results you need without job loss, go for it. If you need to lose
jobs, try to involve all of your employees in the planning, management,
and execution of the changes necessary to achieve your Six Sigma results.
If jobs need to go overseas, take the time to understand the implications
for all involved.
always, I welcome your thoughts. I'm at firstname.lastname@example.org