SIX SIGMA IN INSGHT

WITH SIX SIGMA TECHNIQUES , MANAGER IMPROVE

PROCESSES AND QUALITY BASED ON HARD DATA

The Role of Human Resources (HR) in Six Sigma

Chances are you've heard of Six Sigma, perhaps in connection with General Electric, the
company that made it popular in the 1990s. You may even know that Six Sigma uses statistical
techniques to improve processes in both manufacturing and service industries. But did you know
there is an important role for Human Resources (HR) in this sophisticated process improvement
approach? Or that Six Sigma initiatives are unlikely to succeed without HR's help?

HR professionals with the right skills can contribute to a Six Sigma initiative at both strategic and
tactical levels. This article describes the areas in which HR should play a role in Six Sigma and
discusses how HR professionals can increase their chances of being included in Six Sigma
decision-making and implementation.

To appreciate the important role HR has in Six Sigma, it is important to begin this discussion by
having an understanding of what Six Sigma is, all the roles played by others in a Six Sigma
implementation, and the factors critical to a successful implementation.

Six Sigma Defined

The term "Six Sigma" is widely used to refer to all of the following:

 A structured method for improving business processes. This method, called DMAIC
(define, measure, analyze, improve, and control), is supported by an assortment of
statistical tools.

 A statistical measurement of how well a business process is performing. A process that

performs at "Six Sigma" produces only 3.4 defects out of every million opportunities to
produce a defect. Processes that perform at lower sigma levels (such as one sigma or
four sigma) produce more defects per million opportunities. It is possible for a process to
perform at an even higher level (and thus have even fewer defects), but Six Sigma has
become popular as the standard for excellent process performance.
 An organizational mindset in which people make decisions based on data, look for root
causes of problems, define defects based on customer rather than internal requirements,
seek to control variation, track leading indicators of problems to prevent them from
happening, etc.
Six Sigma Roles
Six Sigma has a martial arts convention for naming many of its professional roles. The
chart below describes how these roles are typically defined.

Table 1: Six Sigma Roles And Responsibilities

Sponsor
Senior executive who sponsors the overall Six Sigma Initiative.

Senior-level executive who is responsible for implementing Six Sigma

Leader
within the business.
Middle- or senior-level executive who sponsors a specific Six Sigma
Champion project, ensuring that resources are available and cross-functional issues
are resolved.
Full-time professional who acts as a team leader on Six Sigma projects.
Black Belt Typically has four to five weeks of classroom training in methods,
statistical tools, and (sometimes) team skills.
Highly experienced and successful Black Belt who has managed several
projects and is an expert in Six Sigma methods/tools. Responsible for
Master Black Belt
coaching/mentoring/training Black Belts and for helping the Six Sigma
leader and Champions keep the initiative on track.
Part-time professional who participates on a Black Belt project team or
Green Belt leads smaller projects. Typically has two weeks of classroom training in
methods and basic statistical tools.
Professional who has general awareness of Six Sigma (through no formal
Team Member training) and who brings relevant experience or expertise to a particular
project.
Professional responsible for the business process that is the target of a Six
Process Owner
Sigma project.

Leaders and Champions usually receive high-level training on the technical aspects of Six Sigma
and specific training on how to lead an initiative. At the "Belt" level, each candidate is assigned an
initial "training project" that he/she will work on during the formal training period. Candidates
attend classroom training for a week, work on their projects for three weeks, return to class for
another week, and so on until they have acquired all the skills appropriate to their role.

HR's Role in Six Sigma

As with any major organizational initiative, many factors contribute to success. Some of these
factors will fall within HR's area of responsibility, such as those discussed below.

Black Belt Selection and Retention

Having the right people in the Black Belt role is critical to the success of a Six Sigma initiative.
The training investment is substantial for this pivotal role. Further, Black Belts are the visible
"face" of Six Sigma. They help shape the organization's impression of Six Sigma, and,
consequently, the willingness of many to embrace the initiative. Therefore, you want to pick Black
Belts very carefully. (Some organizations only select Black Belts from among those who have
already been identified as "high potentials.").

HR professionals can help the Six Sigma Leader find the right people for Black Belt roles and
ensure they remain in those positions for the typical two-year rotation. Potential HR contributions
in this area include:

 Building a competency model that will help identify candidates with the right mix of
technical, team, and leadership skills and abilities.

 Creating job descriptions that help candidates fully understand the position and
expectations prior to signing on.
 Developing a retention strategy that will help ensure Black Belts complete their rotation
and the organization recoups its investment in training and development.

Rewards and Recognition

Rewarding and recognizing Black Belts and Six Sigma teams is more complex than it may
appear. Black Belts join the Six Sigma initiative from various places in the organization where
they are likely to have been at different job levels with differing compensation arrangements.
Determining whether and how to make appropriate adjustments in level and compensation now
that all these individuals are in the same role is both tricky and critical.

Similar complexities are involved at the project team level. Six Sigma projects led by Black Belts
typically result in savings in the hundreds of thousands of dollars. Deciding how the team should
be rewarded and recognized and who should get credit for what is not easy. Yet ignoring these
issues can result in resentment, reluctance to work on Six Sigma projects, and the potential
failure of the overall initiative.

HR professionals can help the Six Sigma Leader tackle the challenge of establishing the right
rewards/recognition. Potential HR contributions in this area include:

 Analyzing existing compensation arrangements to identify the extent to which those

arrangements will support the Six Sigma initiative.

 Creating a strategic compensation plan that will better support Six Sigma.
 Developing a non-monetary reward program for Six Sigma teams.

Project Team Effectiveness

The work of Six Sigma is done mostly at the project team level by a Black Belt leading a small
team through the steps of the DMAIC method. If the team itself does not function well or does not
interact effectively with others in the organization who ultimately have to support and carry out the
process changes, the project probably will not be successful. Given the typical project's potential
payback, failure can be expensive.

HR professionals can help the project teams work together more effectively. Potential HR
contributions in this area include:

 Ensuring team leaders and members get training and/or coaching in teamwork, conflict
management, communications, dealing with difficult team members, and other team
effectiveness skills.

 Providing teams with tools that allow them to diagnose their own performance and
identify when and where they need help.
  Acting as a resource for Black Belts who encounter team-related challenges they cannot
surmount.

Creating a Six Sigma Culture

Many Sponsors, Champions, and Leaders look to Six Sigma as a way to change an
organization's culture to one that is more data-driven, proactive, decisive, and customer-oriented.
But they often have little idea about how to achieve successful culture change.

HR professionals can help executives approach culture change in a way that addresses the
underlying business goals without creating organizational resistance. Potential HR contributions
in this area include:

 Working with Six Sigma Sponsors, Leaders, and Champions to identify elements of the
culture that might hinder the achievement of Six Sigma goals.

 Advising on change plans that will target those specific cultural elements.
 Identifying how Six Sigma can be rolled out in a way that works with, rather than against,
the current culture.

Change Management and Communications

Introducing Six Sigma into an organization is a major change that will have a profound effect on a
broad group of stakeholders. Managers and employees at many levels of the organization will be
asked to engage in new behaviors. In many cases, those leading other initiatives will see Six
Sigma as a source of competition for resources, executive attention, and organizational power.
Others may see it as an indictment of their past performance. Many will be confused about how
Six Sigma fits with the large number of other ongoing organizational initiatives.

HR professionals can help reduce the uncertainty and anxiety surrounding Six Sigma and
increase the levels of acceptance and cooperation in the organization. Potential HR contributions
in this area include:

 Drafting a change management/ communications plan that addresses the people side of
the Six Sigma rollout.

 Helping create a "case for change" that describes:

o The reasons for and benefits of Six Sigma.
o How the organization will help employees succeed in new ways of working.
o How Six Sigma fits with other ongoing initiatives.

 Counseling Six Sigma Leaders and Champions on how their behavior can help or hinder
Six Sigma's acceptance throughout the organization.
Being Included in Six Sigma
Just because HR professionals can play a role in the success of Six Sigma, it doesn't
automatically follow that they will be asked to participate. Unless you are in an organization that
views HR as a partner in all business initiatives, you may have to push to be included in Six
Sigma.

HR can greatly increase its chances of being included in the Six Sigma initiative by:

 Ensuring HR professionals have the right skills and knowledge.

 Marketing its potential contribution early in the initiative.

Gaining the Right Skills and Knowledge

In addition to HR/organizational development-related areas, HR professionals need a familiarity
with Six Sigma itself. Without a basic knowledge of the DMAIC method, supporting tools, roles,
jargon, and even simple statistical methods, HR will not have the credibility it needs to be
considered a potential contributor to the initiative.

The time to get this knowledge is now. Even if your organization is not rolling out--or even
considering -- Six Sigma today, there are two reasons why it's worth a HR professional's time to
become familiar with the concepts now. If the organization does decide to implement Six Sigma,
there won't be enough time to catch up. HR has to be involved at the very beginning of the
initiative. In addition, there are many applications of Six Sigma to HR's processes themselves,
e.g., the payroll process, benefits administration, selection, and recruiting. HR might even
consider setting an example for the rest of the organization by adopting Six Sigma techniques to
enhance its own processes.

Marketing HR's Potential Contribution

The marketing challenge is twofold. First, senior executives may not believe that the people
issues are just as critical to Six Sigma's success as are its many technical components. In that
case, HR will need to sell the importance of the people side. Second, executives must perceive
HR as being able to make a significant contribution on the people side of Six Sigma. Besides
ensuring that it has both the required skills and knowledge described above, HR can also meet
these challenges by:

 Gathering data that supports the need for attention to the people side of Six Sigma.
Potential sources include Six Sigma publications, case studies, conference sessions, and
executives in companies that have already implemented Six Sigma.

 Deriving lessons from previous organizational initiatives in which people issues and/or
HR actions played an acknowledged role in success or failure.
 Meeting with senior executives to discuss their business/Six Sigma goals and then
identifying areas where HR could provide very specific and measurable help.
 Speaking to Six Sigma Leaders and Champions in the language of Six Sigma, not the
language of HR. These executives are typically interested in improving efficiency (i.e.,
internal cost) and effectiveness (i.e., what the customer sees as "defects"). HR needs to
understand what the executives care about and pitch HR's services in relevant terms.
 Taking the lead and applying Six Sigma successfully within the HR function..

HR has a substantial role to play in the success of a Six Sigma initiative. But it will have the
opportunity to contribute only if its professionals have the right skills and knowledge and are able
to show Six Sigma executives the value they can add. Gain those skills now and make sure
senior leadership knows how HR can help support the success of the initiative. Only then will they
realize they just can't do it without you!

More Inputs Regarding Application of Six Sigma

When DuPont discovered that some employees applying for long-term disability had a
long wait for an answer—up to six months—the human resources team turned to a
familiar process to solve the problem: Six Sigma. Similarly, HR professionals at
Motorola, Dow Chemical, General Electric, Ford and others apply Six Sigma to fix,
improve and sustain HR processes. “It’s the way we do work,” says Steve Constantin,
global HR director for Dow.

“Six Sigma is a quality improvement process starting with the voice of the customer and
using data and statistics to solve customer problems,” says Lori S. Miller, HR generalist
at DuPont headquarters in Wilmington, Del. Six Sigma is organized around individual
projects with finite timelines, each project beginning by forming a team to identify the
customer and the customer’s needs. The team measures how those needs are being met,
analyzes the variables that affect customer satisfaction, improves the process, and, finally,
locks in improvements to control the process—all part of the Six Sigma methodology to
define, measure, analyze, improve and control (DMAIC).

Named for the measure of variation that is key to the statistical analysis in the process—

the Greek lowercase letter sigma ( ) mathematically represents standard deviation—

Six Sigma was invented at Motorola in 1987. Since that time, it has evolved from a
measurement scale to a far-reaching methodology that drives business improvement and
“a management system for governing high-impact improvement efforts,” says Tom
McCarty, director of consulting services for Motorola University.

Motorola credits Six Sigma with $16 billion in savings over the past 12 years. Ford
reports more than $1 billion saved since 2000. Dow, which launched Six Sigma in 1998,
attributed $1.5 billion in cumulative earnings before interest and taxes to Six Sigma by
the fourth quarter of 2002.

The payoff comes, these companies agree, because Six Sigma becomes a way to work
rather than a program. That cultural change is driven by company leadership.

“It has to be driven from the top. It can’t be perceived as the program of the month, or it
won’t get the weight that you have to have in order to make change,” says DuPont’s
Miller.

Randy Canfield, chief financial officer for the Performance Management Group of
Countrywide Financial Corp. of Calabasas, Calif., has been involved in Six Sigma for 13
years. “If the CEO doesn’t own the initiative and require involvement and results in the
world of process improvement, then it won’t happen,” he says. “If it’s not a high priority
for him, no one else in the organization will see it.”

Getting Started
Motorola’s early success with Six Sigma spread informally to other companies in the late
1980s. Today Motorola University trains external students in Six Sigma. A number of
consulting firms, often staffed by ex-Motorola, Allied Signal or General Electric
employees, offer Six Sigma training and consulting.

To implement Six Sigma, most companies begin with an executive summit, what
Motorola calls a “leadership jumpstart event.” Generally a two-day meeting facilitated by
a consulting group or an insider who has been trained in Six Sigma, the meeting
introduces senior leaders to Six Sigma and aligns its implementation with the company’s
business strategy.

Rick Schleusener, master consultant with Six Sigma Academy—a Scottsdale, Ariz.-based
company that has helped train many companies to adopt Six Sigma techniques—says he
works with customers to see what obstacles are in the way of achieving business goals
and to identify where the company will use Six Sigma to “move the needle” in those
areas. After that summit, the leadership team commits to the process, often setting goals
and linking those to executive compensation.

Once Dow decided to embrace Six Sigma, human resources created a curriculum design
team, which developed courses specifically on Six Sigma as well as segments on conflict
resolution and conflict management to better prepare the selected employees for their
new roles in leading and coaching teams through projects, Constantin says.

Training is provided for all workers, starting with executives, who are labeled
“champions.” Steeped in the statistical process are “black belts,” generally high-potential
employees pulled from their regular positions and charged with completing projects.
They are assisted by “green belts,” employees from any level who are trained and
complete a certification process.

Completing projects is an integral part of the training program, according to Debbe

Yeager, deployment director for consumer-driven Six Sigma at Ford’s corporate
headquarters in Dearborn, Mich. It’s more than a “mass of training to check the box,” she
says. “With adult learning, they really need to practice by doing.”

Black belts return to their regular jobs after two years and continue to use the Six Sigma
tools they learned. At Dow, Constantin says the goal is to have every professional
employee black-belt trained, and black-belt designation has become an integral part of
the business operation, including HR.

Many of Dow’s key HR slots now require black-belt certification. “You either come in as
a black belt or you come in and get certified as a black belt,” Constantin says.
HR Applications
In addition to creating the training and leading the cultural change, human resource
leaders are using Six Sigma to improve customer satisfaction and reduce costs in
everyday HR functions.

Ronaldo Costa Pinto, HRD global process leader for Dow Chemical’s HR resource center
and an HR Six Sigma champion, says Dow’s HR group surpassed its $1 million savings
goal for 2003, achieving $3.2 million in financial benefit from Six Sigma.

“Applying Six Sigma to HR is really no different than applying it anywhere else in the
organization,” says Jackie Nelson, HR master black belt for GE Consumer Finance,
Americas. “The key is, ‘What are the gaps?’ Once you understand what the problem is,
it’s like a mathematical problem you apply the right formula to solve.”

One of the keys to Six Sigma is breaking down processes into manageable pieces and
improving each piece to affect the overall performance. After mapping the process, Six
Sigma forces a look at the internal workings of the department, sometimes flying in the
face of decisions that experienced managers would have made otherwise.

It’s not that Six Sigma doesn’t value experience, Schleusener says, it’s that the data
speaks for itself. “A lot of Six Sigma is just being disciplined about collecting the data,
and when you do that, all of a sudden some pretty obvious answers just jump out at you,”
he says.

In one such instance, a Colorado manufacturer was having trouble recruiting for a 24/7
operation where local unemployment was 2 percent, Schleusener says. As a result, the
company was paying excessive overtime to experienced workers. Human resources
proposed what experience had taught them would work—raise the entry-level salary to be
more competitive.

“Wrong answer,” says Schleusener. The right answer was found by applying Six Sigma
quality tools to the process. The internal hiring process required candidates to return
week after week—apply one week, test the next, interview the next, undergo a blood test,
then receive an offer. Motivated applicants found jobs elsewhere. By mapping the process
and removing barriers, the company reduced hiring time from six weeks to one. Today an
applicant is tested, interviewed and gets an offer, contingent on the blood test. The
company saves the money it would have paid in higher salaries and overtime.

The data gives the Six Sigma project team leverage to implement its solutions, which is
one reason Six Sigma requires a companywide culture change. Once a process is mapped,
an experienced manager often wants to jump right in to solve the problem, according to
James Roberts, executive director of human resources information technology at Seagate
in Scotts Valley, Calif. Success depends on “having the discipline to stay with the process
and not jump ahead,” he says.
But managers often need to experience that before they are convinced, McCarty says.
“You don’t move from define to improve,” he says, referring to the steps in DMAIC.
“They [managers] don’t change until they actually see it. Boy, is it something to be in the
room when you hear [something] from a team that disproves whatever the underlying
management conclusion was.”

Before DuPont’s project on long-term disability, Miller says the team, which included
people from outlying company sites and the vendor that processed claims, clearly thought
the problem was that some company facilities lagged at processing requests: The
applications process ranged from 10 days to 180 days.

“As an HR person [I found] that was unique, looking at the range instead of the average,”
she says. “Even though our average might be right on target, the customer really
experiences the variability, so you’re trying to really improve your consistency.”

However, the data showed no statistically significant difference in the sites. It did show a
difference in vendors’ case manager performance, which was solved by reassigning
unrelated responsibilities that caused slowdowns. Creating a web-
enabled process for applications, and then training the DuPont facilities on the process,
alleviated other slowdowns. In addition, Miller said they renegotiated the contract with
the vendor to add performance metrics. The project saved DuPont $326,000 in two
primary areas: extended short-term disability payments and administrative fees paid to
the vendor.

At Dow, providing standardized learning resources to its 50 locations around the globe
meant printing, storing and shipping 15,000 participant training manuals to the right place
on time each year, Costa Pinto says. His group launched a project to optimize use of
alternative technologies to reduce cycle time and cost. Dow now offers the courses on
compact disc, reducing delivery time by 70 percent and saving $50,000 in costs the first
month of implementation.

While switching from manuals to CDs seems like a no-brainer, Dow applied Six Sigma to
examine how its centralized process was working, knowing up front that new technology
could be applied. Six Sigma helped quantify the potential savings and gains in efficiency
and cycle time, instead of jumping to the conclusion that CDs would be cheaper and
quicker to deliver. A broken or cumbersome delivery process wouldn’t be fixed just by
switching technology.

The fact that some solutions appear obvious is part of why Six Sigma can show great
improvement and savings early on, Canfield says. “Obvious things are the bulk of the
gains in the first few years,” he says. “The difficulty is to keep [it] up.”

Improving the hiring process was one of the first HR projects that Canfield implemented
at a previous employer. “That process was manual, slow, [with] very long cycle times,”
he says. “The black belt collected data and looked at places where that could be
automated—moved from a sequential process to multiple parallel processes.” Modifying
the workflow and working with suppliers to modify their processes, too, reduced cycle
time from six weeks to five days, Canfield said. The company saved more than $500,000
annualized, based on reducing the cost of hiring by 27 percent per employee due to
tightening up the process, automating testing, reducing supplier fees and increasing
productivity by getting employees on board more quickly.

DuPont examined the relative length of assignment for expatriates, while Dow, with 127
joint ventures, used Six Sigma to improve the process of seconding employees—
temporarily assigning employees to work at a joint venture. Dow’s Constantin says the
company had been re-inventing the process each time a joint venture was formed. “Do
we wake up every morning and everyone is different? Looking at the whole seconding
employee process is huge,” Constantin says. “How can we do this better, not wasting
people’s time? People like to do real work. They don’t like rework.”

Improving employee benefits call centers has been a successful Six Sigma project at
DuPont, Ford and GE. Nelson said GE Consumer Finance’s HR team doubled employee
satisfaction with HR service delivery by improving the HR Assist Center, a service that
employees may call or e-mail with questions about benefits, payroll and other topics.

Setting Priorities
The list of Six Sigma projects is growing as companies create a critical mass of black
belts who begin managing with a Six Sigma mind-set. There are projects on fleet
management, recruitment costs, lowering average hotel room rates for employees on
travel, and evaluating and managing pension programs.

With so many opportunities to apply Six Sigma, how do companies decide what projects
to tackle? It all goes back to the business strategy. Dow created portfolio teams on
training, learning, compensation, staffing, labor relations, executive development and
other topics, and human resource team members around the world suggest projects
through a computerized “idea tracker,” Constantin says. DuPont uses a Lotus-based
computerized tracking system it calls Six Sigma Trac, Miller says. GE has automated the
process as well.

Moving from one project to the next requires a commitment of resources and, as the
critical mass of black belts grows, so does a company’s ability to execute projects.

Six Sigma doesn’t end with improvement, however. The last element is control,
something that Canfield says isn’t easy.

“The challenge has been to maintain that process,” he says. “Everything’s very dynamic.
Keeping that focus is the challenge for the organization once the process is completed: to
maintain or at least not undo processes for reasons that may not be understood.”

While improvements are made to the processes, Six Sigma is still all about the customer.
When that customer is internal, as are most of the HR customers, Six Sigma forces a
change in thinking.
“It’s easy to stay in your own little world over which you have control,” says Canfield.
“Push the boundary out. It’s no longer what’s easier for HR. It’s ‘What does the operating
unit need from HR?’ Thinking in terms of customers and suppliers—it’s a different way
of thinking.”

It’s not magic, either. It takes work to move Six Sigma through an organization. Alan
Larson, who worked with Motorola in the early days of Six Sigma and who now runs CI
Consulting and Training in Scottsdale, Ariz., cautions companies to pay attention to
lessons learned in the 1980s, when “TQM [total quality management] activities were a
failure” because “90 percent of the employees in the company were disconnected from it.
What’s happening now is a lot of these companies are making the same mistake with Six
Sigma.”

Larson, author of Demystifying Six Sigma: A Company-Wide Approach to Continuous

Improvement (AMACOM, 2003), says companies are hiring trained black belts and
expecting them to implement projects without a corporate culture change.

Leading and sustaining that change is the role of executives, Constantin says. “It’s the
leadership that has to drive this, that has to put it in performance expectations, put it in
goals. And by performance expectations, I mean if you’re sitting in a meeting and
someone says, ‘I think’ and you don’t use that as an opportunity to say ‘show me the
data,’ you’re not reinforcing it,” he says.

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