By Mike Loughrin, CEO of Transformance Advisors
Selecting an appropriate project for using six sigma can be challenging. You don’t want to find yourself in a multi-year galactic struggle with no hope of success. Alternatively, you don’t want to overspend on the power of six sigma just to reorganize the office supplies room.
Let’s look at a sensible five step approach:
- Establish Selection Committee
- Identify Strategic Priorities
- Generate Project Ideas
- Score Each Project
- Prioritize Projects
1. Establish Selection Committee
You should create a team that understands the power of using six sigma.
You want to avoid that temptation where “if all you have is a hammer, then every problem looks like a nail”.
A great selection committee would include champions and black belts bringing a sound understanding of six sigma.
You would also want representation from strategic planning, operational excellence, and customer relationship management.
Additional options include supply chain management, finance, and human resources.
2. Identify Strategic Priorities
Ideally, your leadership team has identified 3 to 5 strategic initiatives that are designed to achieve your organization’s vision and mission. These strategic initiatives would be the starting point for a vast majority of projects that will be funded by the organization. If you have this type of effective strategy execution program, then the selection committee should meet with the executive champion for each initiative to gain a shared understanding on how the six sigma approach can apply.
Now, if your leadership team has not done the hard work of setting priorities in terms of 3 to 5 strategic initiatives, then you need an alternative approach. Your selection committee should meet with executives (the ones who should have established initiatives) to discuss organizational goals and priorities.
Caution: you do not want too much input from lower level managers at this time. This step concerns strategic priorities and too many organizations have big disconnects between executives and managers. Now, you might think you are different and that would never happen at your organization.
Then, you need to consider that an astonishing 95% of employees are unaware of, or do not understand, the strategy for their organization, as reported by Robert Kaplan and David P Norton in the Harvard Business Review. This lack of understanding is a significant reason that a vast majority of organizations fail at strategy execution, with some studies suggesting that up to 70% fail due to poor execution.
Do your six sigma program a favor and commit to identifying the real strategic priorities.
3. Generate Project Ideas
Based upon the strategic priorities, generate a list of projects that support these priorities. In many companies, this list will already be known. For others, you may need to establish a brainstorming session with key stakeholders.
Remember your goal to hit the strategic priorities. You don’t want to get trapped with a long list of cost cutting projects when top executives want to see dramatic improvement in quality of products and services. A six sigma program can quickly be viewed as just a cost cutting program unrelated to organizational strategy. This is not what generated the great results at the early adopters
Work the list of projects to understand general estimates of their key characteristics such as scope, customer benefits, other stakeholder benefits, and resources required. It’s too early to know all the details; those come later when a project charters are developed.
One characteristic that usually needs greater understanding is scope in terms on how long you think it will take to complete the project. Seek to scope projects for 3 to 9 months. Work hard to cut larger projects into smaller ones. There is simple too much risk associated with long projects.
Speaking of risk, you can conclude your list of project ideas by adding a few that are not linked to strategic priorities. Perhaps, repaving the parking lot is the big need of the day. Hint: you can add a few crazy projects to the list; we will dispatch them later!
4. Score Each Project
Your next step in selecting six sigma projects is to score each project on your list from the prior step.
Use a “project priority matrix” that creates a quantitative analysis based upon key characteristics. One example of a project priority matrix is shown below:
The above matrix contains:
- Project Characteristic: An important aspect of the project that helps the team determine if this idea is a great fit for six sigma
- Priority: Ranking each characteristic; in this example, 3 is high priority, 2 is medium, and 1 is low
- Points: Quantifiable criteria and the points associated with each characteristic
- Score: The points awarded to each project under consideration
- Priority * Score: Multiply the priority points by the score for each characteristic – giving the weighted score
- Project Score: A total of the weighted scores for each characteristic
5. Prioritize Projects
You can now sort the projects by their scores and have a prioritized list.
For those high priority projects without a Champion identified, you will need to determine who would be the best person to assume responsibility.
At this point, the project selection committee needs to work with each Champion. These Champions need to accept responsibility to resource the project and move it to the Define phase.
Six sigma is a powerful improvement methodology. However, it is not an approach that should be used on every project that comes along.
Certain characteristics make some projects ideal for six sigma, while others indicate that a different approach would generate better results.
Sorting out which projects are best for six sigma requires a systematic project selection process as outlined in this article. A critical aspect is the use of a project selection matrix to score possible projects using quantifiable criteria.
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