the shifting role of lean six sigma in the age of turbulence

The Shifting Role of Lean Six

Sigma in The Age of Turbulence Ron Wince

With You Today

© 2010 Guidon Performance Solutions, LLC. All rights reserved. Guidon Performance Solutions is a licensee of LeanSigma®, a service mark of TBM Consulting Group.

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Ron Wince, President/CEO, Guidon Performance Solutions, LLC • Nearly two decades of experience in application of Lean and Six

Sigma • Toyota Production System training from Shingijutsu in

automotive industry and Six Sigma Training at JPMC • Co-founder of Guidon Performance Solutions – exclusive focus

in non-industrial client-base and non-operational areas of manufacturing companies

• Client experience in retail, healthcare, financial services, information technology, telecommunications and hospitality

• B. S. Engineering, U.S. Naval Academy in Annapolis, MD

What We Do

Guidon helps business leaders guide their companies to transform

strategy into execution through the application of world class business management practices and lean six sigma methods.

60s

70s

80s

90s

00s

Deming

Quality Improvement Tools

Reduce Variation

Six Sigma (Motorola)

Toyota Production System

Just-in-Time

Lean

LeanSigma

Lean Six Sigma

Ford

TQM

Where Did Lean Six Sigma Come From


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Both of these methods were created out of need – need to change the

outcomes from business processes to better solve customer’s problems with the least amount of effort and cost

Lean Six Sigma Has Had Great

Success • Longest surviving improvement

methodology in history

• Over 50% of the Fortune 500 are using Lean Six Sigma – that we know of

• Over 9,340,000 mentions of Lean Six Sigma on the internet in a single Google Search

• Every top management consulting firm now offers some form of Lean Six Sigma consulting

• Dozens (if not hundreds) of LSS training programs

• Companies espouse their cost savings from LSS at every opportunity


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…but despite all the success of LSS

companies were still unprepared for

the economic downturn…too much

inventory, too many resources and

poor responsiveness…

What Did It Cost Us? • Large U.S. and European

banks lost more than $1 trillion on toxic assets

• Unemployment hit 10.2% in the US

• Real GDP declines at 6% per year

• $1.3 trillion in personal wealth wiped out


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…companies who had LSS programs suffered a similar

fate to those who did not…

Lehman Brothers had a strong

LSS program

What Could Have Been Done

Differently • The world has changed

– Proliferation of consumer choice and complexity

– Instant access to information – customers, competitors, suppliers and shareholders

– Globalization and interconnectivity of the world economy

– The disappearance of “sustainable competitive advantage”

• But most companies continue to follow the same playbooks they have always followed

– They believe the economy moves in predictable cycles

– Companies have a playbook for the upswings and another for the downturns

– LSS plays a role in both – but only linked to efficiency, cost and quality


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…efficiency and effectiveness are table stakes – without them you are

simply not in business…companies must find radically shift their

paradigms…

…the world is changing but few

companies are keeping up…

The New Business Normal “Organizations are bombarded by change, and many are struggling to keep up. Eight out of

ten CEOs see significant change ahead, and yet the gap between expected change and

the ability to manage it has almost tripled since the 2006 Global CEO Study”

2008 IBM Enterprise of the Future Study


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New business conditions in the future will more closely resemble navigating through white water than surviving predictable economic cycles:

• Change will continue to accelerate • Threats will come from every direction • Storms will become normal with intermittent hurricanes

• Unpredictable and unseen risks

Within the next 10 years only 1/3 of companies today will survive as they are today.

– Bain Consulting

Preparing for the Future

At a time when firms in many industries offer similar products and use comparable technologies, business processes are among the last remaining points of differentiation.

Tom Davenport, Competing on

Analytics


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As simple as it sounds, few business

leaders today recognize the impact of processes on their ability for companies

to survive and thrive in the future.

Mission &

Purpose

Enterprise Analytics

Operations & CRM

Technology Platforms

and Systems

Human Capital

Business Process Focus

• How decisions are made

• How talent is developed

• How to develop new technology

• How to manage risk

• How to know which direction is best

• How to develop products

• How strategic plans are done


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In the future companies will have to think of their business as

a portfolio of processes – designed for agility to respond to an unpredictable business environment

What Are Companies Doing Today?

• One foot is still in the economic crisis…

– Efficiency and Cost

– Working capital and cash

• Many are starting to focus on the recovery…

– Innovation

– Growth

– New business models

– Efficient recovery

• Focus on “uneducated” opportunities

– Applying process thinking to daily business management practices

– Focus on revenue generation – sales, revenue capture, marketing

– Accelerating and transforming strategic planning processes

– Risk management, legal, customer segmentation


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Principles for the Future

• Business Intelligence to guide actions

• Mission and Purpose as the organizational compass

• Deliberate Practice to Build Agility – Decision making processes at

the point of impact – Response to opportunities and

threats – Continued refinement of

operations and technology – Innovation and new offerings


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View the organization as a portfolio of processes which must be

transformed and orchestrated

Tiger Woods regularly practices this shot, although he may only see it under tournament conditions 2-3

times per year

The Role of LSS and Practitioners • LSS will provide the best tools,

principles and methods for focusing on business processes

• Companies must expand LSS beyond the low-hanging fruit which has been the focus for the last 5+ years – apply the tools in uncommon areas

• Practitioners must educate, coach and push their organizations to capture more benefit from the internal CI teams

• LSS will not be the end-game in the future – it will be one element of a convergence of tools which will drive necessary agility and performance


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Questions


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Thank You

Guidon Performance Solutions

(866) 986-4414 or (480) 986-4414

[email protected]

www.GuidonPS.com

Follow us on Twitter @GuidonPS


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the shifting role of lean six sigma in the age of turbulence

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