Vol. 6, No. 10
This month’s column comes from two seemingly unrelated experiences. I recently read “Six Sigma and the Bottom Line,” by Soren Bisgaard and Johannes Freiesleben in the ASQ’s September 2004 issue of Quality Progress. They make a nice case for the financial complications of Six Sigma. They responsibly point out that the more consistent product and/or service quality resulting from a Six Sigma effort are, the more this might improve sales, but that costs would almost surely be reduced. Those cost reductions can come from reduced material, reduced labor, or both. Here’s where my second experience comes in.
In one of the management courses I am currently teaching, we are using metaphors as a way to examine management ideas. This week we were using flash cards and I drew a card with a cow on it. The connection I made began with my observation that cows seem peaceful. The peaceful cow image reminded me of India, where I spent time several years ago becoming convinced that “I am a peaceful soul,” and beginning to understand the value of that belief. I then proposed that being peaceful may be the most important state that a manager can attain. By being peaceful, a manager can model that behavior for his employees, creating a peaceful team.
Even as I considered the value of a peaceful team, I was reminded that some management consultants advise that a manager should create a positive tension in the workplace. I’m not sure about that, but I am sure that a fearful workplace is not desirable. As we all know, fear takes people to their reptilian “fight or flight” brain. It’s pretty hard to be productive, much less creative, from that place. All that takes me back to the Six Sigma article.
What Bisgaard and Freiesleben did not cover was the difficulty getting employees (and suppliers, for that matter) to be creative about reducing waste when they fear the result will be losing their jobs (or their businesses). Ford Motor Company in the early 1980s was able to commit that no employee would be laid off as a result of process improvement efforts. Savings were generated simply by not hiring new employees. Our natural attrition rate gave us plenty of real dollar savings. That may not be possible or desirable these days. Some firms may not have adequate attrition rates.
Some people believe that hiring new people from outside the company is required to keep the company’s creative juices flowing. I personally think a creative culture can be nurtured without hiring new talent. Encouraging people to take risks, learning from instead of punishing mistakes, researching best-in-class practices, conducting creativity training, and bringing in consultants or coaches are just a few of the many nurturing approaches that do not require new employees.
So what do you do to avoid the fear of job loss if attrition savings won’t cut it? I think you must first be financially transparent. Your financial reporting must be understandable and useful to all employees. Their personal contribution to the bottom line must be apparent to them. That is likely to require new and revised financial reporting. It will also likely require training in financial literacy. John Schuster, I believe, provides the best guidance toward doing these things.
Then, mobilize your folks to not only reduce variation, but to create new products and services. There may still be enough “low hanging fruit” to permit Six Sigma to work in a culture of fear but, even if there is, it won’t last long. Significant improvement requires the very people whose jobs are at risk to be creative. That’s why we need a way to avoid that risk.
As always, I welcome your thoughts. I’m at firstname.lastname@example.org
2004 PQ Systems.
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