"Lean Six Sigma Leads Xerox"

Arthur Fornari and George Maszle

Six Sigma Forum Magazine

August 2004, pp. 11-16

Xerox has long been a leader in Total Quality Management. In the late 1990's, Xerox tried out Lean and Six Sigma approaches in a number of local manufacturing and supply chain operations. Then, in mid-2002, Xerox corporate leaders committed the resources to deploy "Xerox Lean Six Sigma" corporate-wide. This deployment has three dimensions: projects and results, cultural change, and leadership development.

Xerox leadership feels that the key differentiators of success are the following:

• The ability to achieve full integration into the business and how Xerox employees work
• Project selection linked to business strategies and customer value
• The ability to change culture and leadership behavior
• Engaging the full value chain in all geographies and operations
• Ability to track results using a robust tracking system

In implementing Xerox Lean Six Sigma, Xerox followed the following approach:

1. Select projects based on value-creation opportunity such as return on invested capital and economic profit, with control of the number of projects in process
2. Use a consistent financial results tracking approach established by the deployment team and financial organization
3. Consistently deploy and train full-time black-belts, full-time deployment managers, sponsors, and green-belts
4. Assign demonstrated top performers to the full-time roles
5. Adopt the organizational structure necessary for success
6. Engage operations leadership in the process and integrate lean Six Sigma into daily business operations
7. Achieve critical mass by training at least 0.5% of the employee population as black-belts in 2003 and another 0.5% in 2004.

(Note: Xerox has 36,000 employees, so 0.5% is 180 black belts.)

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"Diversity as Strategy"

David Thomas

Harvard Business Review

September 2004, pp. 98-108

IBM has a long history of progressive management regarding civil rights and equal employment. However, when Lou Gerstner took over as CEO in the mid-1990's, he launched a 1995 diversity task force initiative that has become a cornerstone of IBM's HR strategy. The effort continues today under current CEO Sam Palmisano.

The initiative was aimed more at reaching a broader range of customers than at treating everyone in the company "equally". In fact, the initiative emphasized differences rather than similarities. The initial task forces were composed of senior executives who were members of the following constituencies: Asians; blacks; gays/lesbians/bisexual/transgender; Hispanics; white men; Native Americans; people with disabilities; and women. Each task force was also assigned a sponsor who was not necessarily a member of the constituency.

The task forces focused on the following areas for evaluation and improvement: communications, staffing, employee benefits, workplace flexibility, training and education, advertising, marketplace opportunities, and external relations.

In 1997, others in the company were encouraged to participate in the effort through employee network groups.

The corporate change effort benefited from the following key factors:

• Demonstrated leadership support—In addition to role modeling by top executives, IBM also has a Chief Diversity Officer who offers coaching and advice to IBM executives.
• Engaging employees as partners—The task forces and employee network groups have provided this key aspect.
• Integrating diversity with management practices—The CEOs have both emphasized reporting on the Diversity Initiative in senior team meetings, and managers are held accountable on this issue.
• Linking diversity goals to other goals—It was clear from the beginning that the initiative was linked to business goals, and the task forces have led to a series of major business accomplishments.

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"Six Principles for Designing the Accountable Organization"

Murray Dalziel, Sylvia DeVoge, and Katie LeMaire

Journal of Organizational Excellence

Autumn 2004, pp. 59-66

The authors of this article identify six principles of job and organization design that they feel should "underpin any performance improvement effort, whether the focus is organization as a whole or specific functions and work groups."

The principles are:

• A ruthless focus on value—The important factors here are the identification of functions required to implement the company's strategy, the most effective structure for achieving the strategy, requirements that are translated into job accountabilities that connect to the larger strategy, and care to see that each job and management layer efficiently adds value.
• Crystal clear interdependencies—The key steps here are to eliminate redundancies and gaps in accountabilities, and to ensure the clarity of roles across all processes and functions.
• Doable roles—The key elements here are that jobs should be designed around requirements, the size and shape of jobs (the skills, experience, problem solving, and decision making the jobs require) should match the accountabilities assigned to it, there should be an appropriate number of accountabilities, and there should be a balance of job requirements and motives.
• Empowerment requires specific freedom to act—"Clarity of decision-making authority by individuals and by those who interact with them is absolutely critical for organizations to get things done without friction."
• Clear definitions of concurrent accountabilities and tiebreakers—Interdependencies must be explicit, and there should be a clear system for how decisions will be made if those who share interdependency do not agree.
• Teams are also held accountable—"the most effective teams are those in which there is absolute clarity of accountability and clear value-added regarding the team's role and the expected contribution from each member."

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"All in Favor Say 'Benchmark!'"

Heather Johnson

Training

August 2004, pp. 30-34

In 1971, Sears and IBM invited 18 organizations to a meeting with hopes of swapping knowledge. The result of that meeting was the creation of the Mayflower Group. The Mayflower Group maintains a bank of information from its members on more than 60 questions, which address such topics as quality, group and teamwork functioning, diversity, job satisfaction, rewards and recognition, empowerment, and training. Information on at least 18 of these topics must be submitted once every two years by each member company. In return, each member is provided with a normative benchmarking database in an annual summary report.

The Mayflower Group has an HR focus. In order to join, a company must be considered a "premier" company and have an active, high-quality survey program.

Membership is currently at 42 members, with a maximum of 50 members allowed. The current members are: 3M, Allstate Insurance Co., American Express, AXA, Bell Canada Enterprises, Boeing Co., Citigroup, Corning, DaimlerChrysler, Deere & Company, Dow Chemical, Duke Energy, DuPont, Eastman Chemical, Eastman Kodak, Eli Lilly & Co., Ford Motor Co., General Motors, GlaxoSmithKline, Halliburton, IBM, Intel, JPMorganChase, Lockheed Martin, MetLife, Microsoft, Pepsico, PG&E Corp., Prudential, Ritz Carlton, Sears, Siemens, State Farm Insurance, Sun MicroSystems, Target Corp., The Home Depot, ToysRUs, Unilever, Union Pacific Railroad, United Airlines, United Technologies, and Verizon Communications Co.

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"The Toyota Way: 14 Management Principles From the World's Greatest Manufacturer"

Jeffrey Liker

New York: McGraw-Hill, 2004

This book can be considered the best single volume on the principles that have made Toyota such an outstanding manufacturer. The author of this book has 20 years of experience of visits and interviews at Toyota facilities in Japan and the United States. To write this book, he recently interviewed 40 managers and executives from Toyota. The distillation of his understanding of how Toyota works is presented in the 14 Management Principles discussed in this book:

1. Base your management decisions on a long-term philosophy, even at the expense of short-term financial goals. Generate value for the customer, society, and the economy. Have a sense of purpose that supersedes short-term decision-making. Strive to decide your own fate.
2. Create continuous process flow to bring problems to the surface. Move material and information quickly, and make the flow clear so that continuous improvement can occur.
3. Use "pull" systems to avoid overproduction. Material replenishment stimulated by consumption is the basic principle.
4. Level out the workload. This includes eliminating overburden to people and equipment, as well as eliminating unevenness in the production schedule.
5. Build a culture of stopping to fix problems, to get quality right the first time. As a base for this culture, build in support systems to quickly solve problems.
6. Standardized tasks are the foundation for continuous improvement and employee empowerment. Allow creativity to improve the standard, but follow the current standard to maintain reliability.
7. Use visual controls so no problems are hidden. Keep these methods simple so people can easily see the current situation at any time.
8. Use only reliable, thoroughly tested equipment that serves your people and processes. Often it is best to work out a reliable process manually before attempting to apply new technology.
9. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. Leaders should be grown from within, and they should be role models of the company's philosophy and way of doing business.
10. Develop exceptional people and teams who follow your company's philosophy. Work very hard to reinforce the company culture, and to influence people to work in teams towards the company's goals.
11. Respect your extended network of partners and suppliers by challenging them and helping them improve. Partners and suppliers should be treated as if they were an extension of your business.
12. Go and see for yourself to thoroughly understand the situation. Don't rely only on what you hear from other people or what you see on the computer screen. Even top executives should practice this principle.
13. Make decisions slowly by consensus, thoroughly considering all options; implement decisions rapidly. The consensus process broadens the search for solutions, and guarantees a more rapid implementation.
14. Become a learning organization through relentless reflection and continuous improvement. Always have the approach that there is something new to learn at all times.

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Practical Application of the Toyota Way

John McNeil, GP Deltapoint

Liker lays out 14 principles in his excellent discourse on the Toyota Way. But where to begin? Many of these principles may seem vague and hard to put into practice. Some of them may even seem "Japanese" or foreign to the way we do work. Few of them mention specific tools that one can hire consultants to implement or that one can learn in an executive MBA program. As a division or plant manager, which of these principles can help me compete better, or indeed survive in an era of escalating international competition?

Here is a time-phased and structured approach that has worked for our clients.

Problem Solving allows time for Visual Management and then Standardization with Flow and Pull Systems. Build on these to establish level loads internally, with customers and suppliers. These steps will take years, and rely on many of the other principles shown above as cultural imperatives for success. But let's focus first on those six.

1. Solved problems stay solved. One of the hallmarks of Toyota facilities is that their employees are engaged as a "community of scientists". Everyone on the shop floor is engaged in rigorous problem solving methods. An example is the use of root cause analysis using the Five Why's, Fishbone diagrams and guides such as the TaprooTŪ system. These tools are best deployed of course by front line personnel who are engaged, curious and analytical. Being smart and experienced helps too.
2. Visual management through tools such as Five S promotes efficiency, safety and teamwork. The continuous elimination of not-needed items, putting everything in its designated place and the engagement of everyone in organizing and tidiness are hallmarks of a successful Five S implementation.
3. Standardizing on visual management is a good first step in creating stable business processes: a necessary requirement for ongoing continuous improvement. Toyota's community agrees on standards, learns those standard and then operates in concert according to those standards. Failures and deviations lead to changes in the standards (they clearly were not clear enough), or changes in the learning process. Learning is of course the outcome of training programs applied appropriately. Continuous auditing ensures that standards are suitable, followed and improved continuously.
4. One of the best ways to improve standards is to ferret out and eliminate waste. Waste has many forms, but overproduction is a key one. Tools such as Rapid Improvement Workshops and Value Stream Mapping detect and reduce waste.
5. A waste-free system avoids overproduction by replenishing according to consumption. A common tool to do this is Kanban.
6. The final tool-based step is level production: relatively easily achieved within the walls of one factory but much more powerful and consequently more complex to implement with customers and suppliers. Kanbans and milk-run systems are widely used here.

Of course many organizations have attempted to implement the tools without changing the underlying culture. Top down management, long runs and reliance on tribal knowledge and informal systems then override any gains to be made and lock companies at current performance levels. To change culture, the tools are more subtle and indirect. We will address some of them in an upcoming QUICK newsletter.

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