Large-scale lean and six sigma transformation projects are notoriously difficult to make work and, with boards still wary of a fragile economic recovery less likely to sign off on major expenditure, the situation is more challenging than ever. The reason is simple: lean and six sigma are traditionally focused on solving small problems bottom up rather than the bigger, more strategic issues that generate breakthrough performance.
A different perspective and approach is needed to create longer-lasting change or ‘lean transformation’. By following a few guidelines, firms can coordinate their lean and six sigma efforts to unlock the full potential of the company and achieve genuine transformation.
As a first step, it is necessary to connect the lean transformation to the company’s business goals. Doing this successfully requires a clear articulation of the strategy and future vision for the business using measurable objectives that can be accomplished in a two- to threeyear timeframe. Given that lean transformation can be powerful when applied correctly, senior leaders should not shy away from making their chosen objectives challenging. After setting the objectives and timeline, senior leaders need to develop a set of linked annual objectives that line up the entire organization behind the strategy.
This process breaks down big objectives into smaller, more manageable chunks.
At any time, an organization will have a certain number of initiatives in the pipeline. Once the breakthrough objectives are established, it should re-examine these initiatives in light of the objectives and determine those that align with them. It is imperative at this stage to identify those initiatives necessary to meet annual objectives and the critical processes that support them, in order to make sure the corporate strategy and objectives can be executed.
Companies that go through this exercise often discover two things: First, after adding up the expected results of those initiatives, a significant gap still remains for meeting the actual breakthrough; second, many initiatives don’t align well with the overall objectives and, subsequently, are better off being stopped. These findings can lead to heated internal debates, as every initiative has an owner being asked to make a sacrifice, and different parts of the organization will have different views on what is important.
At the same time, to make this successful it is important to link in with the budgets. To make sure the right targets and behaviors are being encouraged, the budgeting process must be connected to the strategy. This will help remove some of the sentimentality from the discussion and enable everyone in the company to view the bigger picture.
What should come out the other side of this process is a new list of initiatives. Reviewing these will allow the leadership team to develop a range of scenarios examining how aggressive it might be possible to be in terms of pursuing each one, while still ensuring that customer expectations are met and critical processes are performed over a range of operating conditions.
Once the steps above have been performed, normal lean project management can take effect and provide the skills needed to deploy lasting change, including robust metrics to monitor results. The right metrics will help to determine how well initiatives are being executed and whether breakthrough change is being delivered.
Lean transformation can lead to significant operational improvements at many companies. The key is for lean transformation to contribute to companies’ strategic agendas. The lean transformation approach provides a framework for ensuring that initiatives on the ground floor can be aligned with the business strategy at the top levels and, in doing so, deliver their expected value.
