Almost every organization can be broken down into three basic levels:
The highest level is the business level — the umbrella level that encompasses everything related to the company. The next level is the operations level, while the lowest level is the process level.
The success of Six Sigma is defined as the extent to which it transforms each level of an organisation to improve that organization’s overall quality and profitability. The fluidity of the methodology allows it to work up and down the different levels of the organization.
In this post I’ll be focusing on the business level:
Business Level: The business-level application of Six Sigma focuses on making significant improvements to the informational and economic systems used to steer your business, such as customer feedback or supplier quality. It requires a three- to five-year commitment from executive leadership to consistently do the following:
- Recognize the true states of your business. Do you really know the states (or conditions) of your business — for example, how well your company is doing in customer service (see box below)? You cannot improve what you do not measure; identifying the various states of your business help you properly focus on what must be improved.
- Define what plans must be in place to realize improvement of each state. Creatively consider how to achieve a higher level of performance and relate those things to customer satisfaction.
- Measure the business systems that support the plans. Know what you need to measure and how to properly measure it, and get executive commitment to pursue the correct measurements.
- Analyze the gaps in system performance and benchmarks. Diagnose capability measures and assess performance gaps, through analyzing benchmarks and uncovering the “secrets” of how businesses operate at higher sigma levels.
- Improve system elements to achieve performance goals. Define your measuring system, collect the necessary data, analyze that data and prioritize your efforts
- Control system-level characteristics that are critical to value. Monitor those efforts and their elements over a period of time, conducting regular “audits” of performance and controlling these critical-to-value characteristics.
- Standardize the systems that prove to be best-in class. Compare the optimal performance of your business systems with similar examples elsewhere. When appropriate, apply these findings to other business units, capitalizing on the potential savings of your system level analysis and control.
- Integrate best-in-class systems into the strategic planning framework. Roll the improvements out to all pertinent business units, folding these improvements into critical business strategies and tying the initiative to compensation as an incentive for full cooperation.
This Benchmarking Worksheet provides a good way of measuring your progress [xls download]
In the next posts I’ll be looking at the Operations Level in the organisation and how Six Sigma can be applied there.
How have you implemented continuous improvement at a Business level? Leave a comment below: