Mulbury Six Sigma

Mulbury Six Sigma

Six Sigma · Lean · TRIZ

• Financial - the investor and shareholder viewpoint
• Operational - the internal quality and effectiveness viewpoint
• Organisational - the company learning and growing viewpoint
• Customer - the (external) customer satisfaction viewpoint

The reasons for using a balanced scorecard are to share corporate strategy and provide a balanced measure across all the above views. Traditionally organisations have concentrated on Financial measures, and then Operational measures together with perhaps Organisational measures, and Customer measures coming a poor last.

The failure of such a narrow and unbalanced measurement system is that the financial impact of strategies within areas such as personnel and information technology are often entirely missed and thus not acted upon. Since customers often come last in a typical measurement and reporting system, their viewpoint can be totally missed, often to the acute detriment for the organisation. In the diagram above, traditional and principle metric areas are show in navy, with secondary metric areas in blue. To balance the measurement system, each area should be effectively monitored where it has direct impact on the corporate strategies and vision. The customer and employee have a key role to play in achieving corporate vision, and it is necessary to include performance in these areas, and to enable feedback for improvement and proactive implementation.

The path for developing a balanced scorecard is to move from vision and strategy, to identifying key targets for success, and from these devise measurements that effectively track strategy outcome. These measurements need to be collated and evaluated, and then presented in such a way as to gain maximum feedback in vision and strategy implementation.

A typical scorecard could include such measures as those shown below. For each measure and result it is necessary to indicate current performance, past trend (perhaps over the last quarter), which way is better (up or down), and what is an acceptable level of performance.

A valuable tool in the implementation and monitoring of corporate strategy

Six Sigma - customer focused quality, corporate strategy, and a balanced scorecard in one!

Six Sigma is based on total customer focus, both internal and external. Customers include internal customers such as employees, shareholders and other process owners. It is a methodology for continuous process improvement, and engages everyone in the organisation as a valued employee.

• Reaching corporate vision by satisfying all customer needs
• Satisfying customer needs by driving processes for perfection
• Identifying core processes that drive customer satisfaction
• Measuring performance through the Sigma Quality Metric
• Involving and empowering employees as part of this process

The key metrics are the Critical To Quality process characteristics, which identify the critical, measurable and actionable factors that lead to customer satisfaction and quality. Using statistical measures and process control theory, these metrics can all be converted to a common value - the Sigma-Value. It is this commonality that allows all process metrics to be combined in to one single performance figure. Simple, engaging and effective.

• 1 sigma  - very poor
• 2 sigma - poor
• 3 sigma - average
• 4 sigma - good
• 5 sigma - excellent
• 6 sigma - World Class

External or internal scorecards (or dashboards) operate in Six Sigma Quality in much the same way as for Balanced Scorecards, and there are many common features, such as the need to evolve suitable metrics and ensure that they are reported and acted upon. However, Six Sigma Quality goes a lot further, in that it focuses attention on all the customers (internal and external) and proactively promotes a culture of continuous improvement.

Whatever tool a company chooses to use to monitor and promote corporate strategy, it is important to

• Capture the Corporate Vision, aims and objectives
• Develop appropriate Strategies to achieve these objectives
• Implement, monitor and adapt such strategies and respond to change
• Keep a balanced view, strive for customer satisfaction, and engage every employee

Mulbury Six Sigma

Publisher and reseller of Six Sigma books

© 2001-2008 G Tennant Mulbury Six Sigma