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March 16, 2007
Bob Zimering, a Textron Master Black Belt, Discusses Six Sigma at Textron and Responds to Some of the Critics
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Textron began implementing our version of Six Sigma (more comprehensive than Motorola’s) in February 2002 and it has been a success. Many factors affect how successfully a company will be with Six Sigma, but one of the most significant may be the level of commitment the company is willing to make in the program. “If Six Sigma is used only to make small scale improvements, without doing anything revolutionary, it probably won’t help much,” says Textron’s Bob Zimering, a Textron Six Sigma Master Black Belt. “If a company isn’t really committed to using Six Sigma, if you use it just to reduce the number of paperclips, you aren’t going to be successful with it.”
A Commitment of Numbers
A significant part of Textron’s early commitment to Textron Six Sigma meant devoting the time and personnel required to do it right. As of February 2007, there are more than 400 Master Black Belts and Black Belts, and 2500 Green Belts deployed by Textron to lead projects and processes throughout each of the business units.
“Textron recognizes that companies that want to maintain long term success must continuously challenge and improve business operations at a tactical, strategic, or revolutionary level,” says Zimering. “We have absolutely committed to training people and supporting improvement projects, and are integrating Textron Six Sigma into our plans for transforming our company. We now are getting results at a more strategic level, which is improving the overall business.”
Like any quality management and improvement program, Textron Six Sigma has its critics, ranging from Dilbert cartoons to more scholarly analyses. One often-quoted analysis was done by Qualpro, which has a product that competes with Six Sigma. An article in Fortune magazine (7/11/06) quoted Qualpro saying that “of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 since.” The actual analysis has not been released, so it is hard to know which companies were included and what criteria were used, but there are many more factors than just Six Sigma that determine a company’s stock price. Textron’s stock price, incidentally, has outpaced the S&P 500 by some 140 percent since introducing Six Sigma, but apparently Textron was not included on Qualpro’s list of “large” companies. In any event, the company attributes this good stock performance to many factors, not any single one.
What is Textron Six Sigma? Where did Six Sigma come from? |
Fueling Innovation
Another criticism of Six Sigma is that it stifles innovation, something that certainly would be problematic for a company like Textron where the focus is very much on innovation. A study often cited to back this up was done by Wharton professor Mary Benner and Harvard Business School professor Michael Tushman. "In the appropriate setting, process management activities can help companies improve efficiency, but the risk is that you misapply these programs, in particular in areas where people are supposed to be innovative [emphasis added]," notes Benner. (Knowledge@Wharton, 11/30/05)
Textron thoroughly agrees that it would be a mistake to misapply Textron Six Sigma or any similar program for that matter. “There was a lot of discussion about this at a ‘Six Sigma for Innovation’ conference I just attended,” says Zimering. “The consensus is that the original 1980’s Six Sigma from Motorola was narrowly focused on reducing defects in simple repetitive processes, and probably was not very good at innovation. But since then, Six Sigma has evolved to include Design for Six Sigma (DFSS), which is about focusing improvements on customer needs and new ideas. There are many opportunities to grow Six Sigma’s capability for revolutionary or disruptive idea generation by integrating methods from leaders such as W. Chan Kim and Renée Mauborgne (Blue Ocean Strategy) and Clayton Christensen (The Innovator’s Solution)... and from what I saw at the conference, Textron is at least on par with other industry leaders in developing this capability. We also have a visible commitment to innovation across the company with the Chairman’s Award and bonus programs. At the top, Ken Bohlen, our Chief Innovation Officer, just took on responsibility for Textron Six Sigma and has joined the Management Committee, aligning Innovation and TSS with the highest decision-makers in the company.”
Success Stories
Textron’s success with Textron Six Sigma has come about largely because its people – its management and workforce – have embraced the initiative and are enthusiastic about its potential. As a result, the company has dozens of success stories from business units across the entire organization, many in operations and short-cycle office work. “There are some new ones, however, that are non-traditional in terms of where the methodology is usually used,” says Zimering.
One of these is in Tax and Treasury department. One of the Master Black Belts worked with a team to improve metrics, including their internal customer service and linking to AOP goals. In Treasury, they focused on streamlining how they do Risk Exposure Management, Cash Visibility, and Standard Work for Investment Management (specific tasks to evaluate an investment). The challenges were in use of Lean Six Sigma to reduce variation and cycle time in processes that are very long (more than one month) and have big “chunks” of work that are not standardized. In addition, each year there are laws, deductions, and so forth that are different from the prior year. By sticking to the process improvement playbooks, they were able to overcome these challenges, proving that it can work even in these areas.
Another forward-looking example was applying Idea Generation tools (called Ideation) as part of Textron Six Sigma at Textron Financial Corporation’s Revolving Credit Group. One team used a mapping tool to do free and random thinking in four areas: Growth, Customers, Technology, and Culture/Design. The goal was to come up with new breakthrough ideas on how to meet the 15 percent year-over-year growth target. These are being screened and studied for implementation and run the gamut from technology supporting 24/7 ‘lights on’ support with online payment and approvals, to putting a target for each leader to personally spend 25 percent of his/her time directly interfacing with the customer. Ideas that affected Culture included expense control as part of plans and better managing non-customer travel and meeting times.
Developing the Road Map
Textron plans to continue using and expanding Textron Six Sigma. “All key decisions, from top to bottom, will be driven with the appropriate fact-based, systematic, multi-perspective approach characteristic of Textron Six Sigma.” says Zimering All key processes, in all functions, will have key steps and handoffs standardized, with a focus on delivering maximum value to their customers.” Other priorities include improving areas identified in recent employee surveys and integrating Textron Six Sigma tools to expand and accelerate business development in global markets.
But what about the Dilbert cartoons? “I think they’re great!” says Zimering. In fact, I get a Dilbert calendar from my mom for my birthday every year. Dilbert has had fun with just about every business function: operations, sales and marketing, IT, customers, suppliers, outsourcing, etc. I’m glad that Six Sigma is pervasive enough that it gets featured every few months; otherwise I would start to wonder if people had lost their passion about it.”
Textron is now one of the Six Sigma “veterans,” so it receives many requests from other companies for assistance and suggestions. “One of the things I love is to do is informal mentoring for black belts and deployment leaders at companies that are just starting their Six Sigma journey,” says Zimering. “They have the benefit of learning from companies like ours that have gone through the school of hard knocks to get programs that perform. It is exciting to see these “newbies” picking so much low-hanging fruit and using the techniques that we struggled with years ago as if it were second nature.”
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