Six sigma in action

Overcoming barriers to organizational change

Abstract

Purpose – The purpose of this paper is to review the latest management developments across the globe and pinpoint practical implications from cutting-edge research and case studies.

Design/methodology/approach – This briefing is prepared by an independent writer who adds their own impartial comments and places the papers in context.

Findings – The paper finds that organizational learning and continuous improvement (CI) are both linked to organizational change, which is currently one of the most widely discussed organizational phenomena. The implementation of organizational change – the practices of CI – requires supportive structures of organizational learning. However, it is not well-known how organizational learning and continuous improvement work dynamically and mutually.

Practical implications – The paper provides strategic insights and practical thinking that have influenced some of the world's leading organizations.

Originality/value – The paper saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Article Type:

Literature review

Keyword(s):

Six sigma; Learning organizations; Continuous improvement; Knowledge sharing; Finland.

Journal:

Development and Learning in Organizations

Volume:

22

Number:

1

Year:

2008

pp:

32-35

Copyright ©

Emerald Group Publishing Limited

ISSN:

1477-7282

Organizational learning and continuous improvement (CI) are both linked to organizational change, which is currently one of the most widely discussed organizational phenomena.

The implementation of organizational change – the practices of CI – requires supportive structures of organizational learning. However, it is not well-known how organizational learning and continuous improvement work dynamically and mutually. Six sigma is one approach that can be used to examine the dynamics of these two concepts. In the pursuit of organizational effectiveness, six sigma is currently gaining more and more ground in high-performance organizations aiming at the highest level of quality.

Process improvement

Six sigma is a process improvement methodology that aims to increase business performance through a solid and accurate business focus. It is a systematic approach to achieving continuous process improvements.

The six-sigma approach incorporates five stages of implementation in process improvement, which are called the DMAIC-cycle of define-measure-analyze- improve-control. These steps guide the improvement process and help detect root causes of the failures in a single improvement project. The key steps in six sigma are:

1. Defining product characteristics that affect customer satisfaction.
2. Using a failure mode and effect analysis to identify and control parameters to meet customer specifications.
3. Employing a reproducibility and repeatability study to measure the control parameters.
4. Estimating the process capability of the prototypes and thereby being able to correct individual defects immediately.
5. Developing the quality control plan and training material.

Implementing six sigma

The application of six sigma is progressing steadily in Finnish business life. The following companies, operating in Finland, have all begun implementing six sigma.

Company 1

This leading Finnish company is one of Nokia's suppliers. In implementing the six-sigma philosophy, it aims to establish the six-sigma culture in the organization through an extensive employee-training program for the key actors in the implementation process.

The outcomes of the training program were found to be positive and significant financial benefits were attained. However, the start-up phase in using and implementing six sigma was not straightforward.

One reason for this is the nature of production. Production life cycles are so short that there is no time to finish the defined improvement projects of specific manufacturing processes before the manufacturing is finished. Therefore, the company decided to set-up processes using design for six-sigma methodology in order to be able to meet more and more demanding customer requirements and save costs of poor quality.

Company 2

This leading international supplier of housing and environmental technology offers a wide selection of systems in the areas of heating and cooling, water and energy supply, indoor air and wastewater management, as well as various utility-pipe solutions. Furthermore, the company invests in product and systems development, and due to that is known for many innovative solutions within the industry.

The company divided a learning process into the following five main aspects:

1. Setting up the goals for development activities.
2. Criteria and methods for decision-making.
3. Resource allocation for development activities.
4. Development of new follow-up and reporting procedures.
5. Setting up a new control system.

The start-up phase is still in progress; however, there have been some initial findings:

• top-management learned to lead in a more accurate manner due to development of the on-time measurement and reporting systems. This is linked to a decision-making process on an operational level and in development activities which have become more effective so far;
• training for employees increased their understanding of the nature and efficiency of systematic development; and
• the organization's awareness and understanding of the processes also increased. They are now able to define the capability of their operations in a more precise way. Moreover, they are able to identify new learning opportunities.

Company 3

This company provides ground up trucks and industrial vehicles in any size and configuration, which have one thing in common – they need axles to run on, and, in a word, axles are the business. The expertise of the company is in knowing how to convert the forces generated by a vehicle into effective work on the ground. And the company pursues providing an optimum solution for every customer's needs. One of the company's competitive advantages is that, as a medium-sized flexible company, short lead-times with responsive, top-quality service can be offered.

The company took a quality standard-oriented approach to six-sigma implementation and organizational development. Although the company – like the second company – is at the start-up phase, a few conclusions can still be drawn.

Even though the company has trained several people in six sigma, both on the management and process specialist level, their ability to carry out single development projects is not on the same level as in the first and second case companies. This relates to the HR development and practices for generating know-how, i.e. organizational learning.

Despite a successful pilot project execution, organizational learning did not make the same progress as it did in the first two companies. Thus, when aiming to enhance organizational learning the approach taken was not practical enough. This is not to say that a quality standard-oriented approach cannot create organizational learning. However, implementing the six-sigma kind of methodology for pursuing easy gains in the development of business operations may not occur fast and effectively enough.

Steps for implementation

A few key steps for a procedural implementation process can be drawn from these case companies:

1. Top management education and training – to understand the core of six-sigma methodology.
2. Definition of the organization's key processes and their measurement. The key measures are aimed to form an integrated and on-time reporting system that supports managerial decision-making.
3. The experts and operators were trained by a ten to 20 day training program and through a number of training-related improvement projects.
4. The clarity of the roles of different actors involved in the improvement process; actors may play a crucial role in supporting organizational learning and continuous improvement.

Continuous improvement

Managerial commitment provides the foundation for learning and improving continuously. Top management needs to define, promote, and launch the six-sigma philosophy in the entire organization, and investments in executive training should be made on a continuing basis to overcome crucial barriers.

Organizing and resource allocation are some of the key managerial responsibilities. Management should invest in, and allocate resources to staff training in order to promote learning and CI. On the level of operational leadership, the roles of the leaders need to be clearly defined and leaders should be empowered.

The development of information systems is initially a managerial responsibility. As the ultimate goal is the best possible utilization of existing information in monitoring and decision-making, the development of information systems is a necessity for supporting CI structures and for progressive learning. The organization may enhance learning and support to continuous improvement by organizing a forum for knowledge dissemination where successes and failures are shared. Sharing of knowledge would lead the organization towards collective, social learning and a more advanced level of development activities.

Comment

This is a review of “Dynamics of organizational learning and continuous improvement in six sigma implementation” by Savolainen and Haikonen (2007). This article presents examples of three multinational companies based in Finland, which are implementing six sigma. From these examples, the article applies four key steps for implementation. The article is clear and concise, and employs an interesting and readable style. It is of benefit to managers and consultants interested in the dynamics of organizational learning and continuous improvement.

References

Savolainen, T., Haikonen, A. (2007), "Dynamics of organizational learning and continuous improvement in six sigma implementation", The TQM Magazine, Vol. 19 No.1, pp.6-17.

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