The Evils and Perils of Six Sigma
Can a LEAN Six Sigma Approach Cause Layoffs?
One of the biggest caveats of the six sigma approach is that when properly implemented, exposes aspects of our business important to the customer, which force us to rethink things. You might think this is a good thing and it typically is, particularly when waste is identified. But what happens when the cost reductions are just not there and the next step is right-sizing? Six Sigma does in some cases demonstrate increased process efficiency and lass variability at the output and that may mean there’s more head count that can be rationalized or justified.
The Cursed Six Sigma Approach
A Six Sigma approach should be used to increase capacity, not reduce head count and eliminate jobs. But in today’s market this is almost unavoidable. Therefore, Black Belts and Master Black Belts have to work even harder to promoting a Lean culture and ways of adding value. This can be in the form of retrenching jobs or retraining employees to work more efficiently and take on more tasks albeit without having to work more hours. Unfortunately, there may be no opportunities for retraining.
But what happens when an employee or entire department is deemed unpopular and unpopular? I’m sure many Six Sigma leaders have been challenged and have come to realize that their work causes them to be themselves unpopular, and even dangerous. I feel at times that I’ve got to watch my back as I’ve gained much credibility with my employer for finding opportunities for improvement.
A Dreaded Six Sigma Conversation with the Boss
The question arises increasingly in today’s labor force:
Executive: “Hey Mr. Six Sigma Black Belt, we’ve got to reduce our operational expenses by another 15% over the next quarter if we’re to meet EBITDA and we’ve got to respect our manufacturer’s MOQs or we’ll be fined. Who do you suggest we cut?”
Mr. Six Sigma Black Belt: “What are the EBITDA targets we’re trying for and why are you telling me this now, at the end of Q3?”
Executive: “It doesn’t matter. The board changed directions and if we want another round of financing we’ve got to show them we’re really lean.”
Mr. Six Sigma Black Belt: “OK. Give me 24 hours and I’ll give you a proposal that’ll save jobs by creating a better value proposition for our customers to take extended warranties on our products. This will create value in the supply chain, we’ll move more product to keep our warehouse inventory and WIP at real JIT levels, and this will reduce tech support calls by about 5%. If we have to let people go, I’ll try to see if it’s best to get older employees to push for early retirement.”
Executive: “You don’t get it even though I know you’re just being stubborn. I know you can demonstrate and show me that I’m wrong and you’re right. You’ve always been right up to now with your reports and in the two years you’ve been here, you’ve helped us save about $3M. Now, if you want to continue getting executive training and coaching and you want to continue to get your bonus, you’ve got to take the good with the bad and you’ve got to help me find opportunities to reduce head count. Let me give you a suggestion where you can look to start.”
Mr. Six Sigma Black Belt: Look of consternation and disappointment
Executive: “Bob in west coast sales pissed me off last month again. He didn’t make his numbers, and he’s nowhere near meeting his budgeted forecast. He’s got so many opportunities in the pipeline that he’s like Santa Claus handing out gifts at the orphanage but he can’t get the PO’s to come in and when they do he’s always discounting them. Let’s make an example of the west coast sales team, then everybody will pull through to make their numbers so we don’t have to have a bloody other firesale at the end of Q4 and jam the channel into Q1.”
Mr. Six Sigma Black Belt just so happened not to like Bob on the west coast too.
“Does Bob know he’s on the radar?”
“Well I do. I want to make sure that we don’t let the wrong people go. I think we need Bob even though he’s not delivering. I’d rather have him a non-performer on our team than going to the competition, who would scrape him up. Could you image Bob working for the competition and exposing our dirty laundry?”
Executive: “Then let me phrase it in language you’ll better understand. Please find evidence and data that proves that Bob is a liability more than an asset. You can show me how the sales cycle hasn’t changed in five years in his territory and that there aren’t any roadblocks that prevent him from selling. Show me that the cost of sales is much higher in his territory than elsewhere. Bob is going and we can’t make it look like a sales cleansing. Make it look objective.”
Mr. Six Sigma Black Belt frowns, puts his chin to his chest and just walks away in disgust. He knows that his blood will be on his hands. Even though he doesn’t like Bob, this is not what Six Sigma is about.
He goes home that night considering his resignation. After all, he’s turning down two or three serious job offers every month. But what will his boss give him as a reference letter?
To Whom It May Concern:
Mr. Six Sigma Black Belt has been with us just over two years, and in that time, with no capital spending, managed to single-handedly reduce operating costs by over $3,000,000 and bring unfathomed success and value to our customers. He’s not a team player though.
Mr. Six Sigma Black Belt went home that night and looked for a good book to read so that he could be distracted from his dismal day. He didn’t want to read anything by Joseph Conrad especially Heart of Darkness. For some reason, he felt he had too much in common with Marlowe and that he was out to get Mr. Kurtz.
Published with permission from sixsigmaz.com