The Leadership Promise… In a Lean and Six Sigma World

Presentation by:

Michael G. WinstonLean Six Sigma Summit 2008May 1, 2008Chicago, Illinois

The Leadership Promise… In a Lean and Six Sigma World

THE GAME HAS CHANGED!!!THE GAME HAS CHANGED!!!

A Rapidly Changing WorldA Rapidly Changing World

Faster changes in technology

Faster market saturation

Faster competition

Faster segmentation of the market

Faster changes in the external environment

Faster changes in technology

Faster market saturation

Faster competition

Faster segmentation of the market

Faster changes in the external environment

Response to ChangeResponse to Change Leaner and more efficient organization structures New products and markets Pressure for differentiation/distinctive competencies New management methods to increase productivity

and quality Enhanced use of technology Increased emphasis on innovation and customer

service Increased use of cost containment mechanisms …And many more

Leaner and more efficient organization structures New products and markets Pressure for differentiation/distinctive competencies New management methods to increase productivity

and quality Enhanced use of technology Increased emphasis on innovation and customer

service Increased use of cost containment mechanisms …And many more

Everyone is trying to master the management of rapid change!

Everyone is trying to master the management of rapid change!

There’s NothingDifferent About Your Products

There’s NothingDifferent About Your Company

There’s NothingDifferent About Your People

There’s NothingDifferent About Your Pricing

There’s NothingDifferent About Your Service

So why should I buy from you ?

HOW DO YOU WIN THE NEW GAME?HOW DO YOU WIN THE NEW GAME?

Clear VisionClear Vision

Unclear VisionUnclear Vision

Benchmarking…Are you as good as the

best in the world?

Benchmarking…Are you as good as the

best in the world?

“Many of the things you can count, don’t count. Many of the things you can’t count, really count.”

Albert Einstein

AnticipationAnticipation

Some watch

Some wait

Some POUNCE

Some watch

Some wait

Some POUNCE

IdentifyLeadershipImperatives

IdentifyLeadershipImperatives

DetermineRequiredOrganizationCapabilities

DetermineRequiredOrganizationCapabilities

ClarifyBusinessStrategy

ClarifyBusinessStrategy

Define Business Objectives

Define Business Objectives

Link Leadership Strengths to Business StrategyLink Leadership Strengths to Business Strategy

Selecting LeadersSelecting Leaders

“ Take our twenty best people away, and I can tell you that Microsoft would become an unimportant company.”

Bill Gates, Chairman and CEO,Microsoft Corporation

“ Take our twenty best people away, and I can tell you that Microsoft would become an unimportant company.”

Bill Gates, Chairman and CEO,Microsoft Corporation

In 1986, Bill Smith, a senior engineer and scientist at Motorola, introduced the concept of Six Sigma to standardize the way defects are counted.

Six Sigma provided Motorola the key to addressing quality concerns throughout the organization, from manufacturing to support functions. The application of Six Sigma also contributed to Motorola winning the Malcolm Baldrige National Quality award in 1988.

Since then, the impact of the Six Sigma process on improving business performance has been dramatic and well documented by other leading global organizations, such as General Electric, Allied Signal, and Citibank.

In 1986, Bill Smith, a senior engineer and scientist at Motorola, introduced the concept of Six Sigma to standardize the way defects are counted.

Six Sigma provided Motorola the key to addressing quality concerns throughout the organization, from manufacturing to support functions. The application of Six Sigma also contributed to Motorola winning the Malcolm Baldrige National Quality award in 1988.

Since then, the impact of the Six Sigma process on improving business performance has been dramatic and well documented by other leading global organizations, such as General Electric, Allied Signal, and Citibank.

The History

Six Sigma – 6Six Sigma – 6

Six Sigma means 99.9999998% defect free work

or

3.4 defects per million!!

Six Sigma means 99.9999998% defect free work

or

3.4 defects per million!!

99.99996% Good (6 Sigma)

• 20,000 lost articles of mail per hour

• Unsafe drinking water for almost 15 minutes each day

• 5,000 incorrect surgical operations per week

• Two short or long landings at most major airports each day

• 200,000 wrong drug prescriptions each year

• No electricity for almost seven hours each month

• Seven articles lost per hour

• One unsafe minute every seven months

• 1.7 incorrect operations per week

• One short or long landing every five years

• 68 wrong prescriptions per year

• One hour without electricity every 34 years

99% Good (3.8 Sigma)

Six Sigma -- Practical MeaningSix Sigma -- Practical Meaning

In businesses everywhere, Six Sigma tools are used to drive successful business improvement. The methodology begins with the Six Sigma principles of

leadership, then defines an integrated approach to guiding improvement efforts and finally, drives results through engaged teams.

The Six Sigma leadership principles are: Align to organizational goals. Mobilize with empowered teams and focused project

management. Accelerate with change management and structured

problem solving methodologies. Govern through visible sponsorship, rigorous project

reviews and proactive communication and knowledge sharing.

In businesses everywhere, Six Sigma tools are used to drive successful business improvement. The methodology begins with the Six Sigma principles of

leadership, then defines an integrated approach to guiding improvement efforts and finally, drives results through engaged teams.

The Six Sigma leadership principles are: Align to organizational goals. Mobilize with empowered teams and focused project

management. Accelerate with change management and structured

problem solving methodologies. Govern through visible sponsorship, rigorous project

reviews and proactive communication and knowledge sharing.

Maximizing Business Performance

What is Six Sigma?A quality approach with several dimensionsWhat is Six Sigma?A quality approach with several dimensions

First:  A goal. It is 3.4 defects per million opportunities. Sigma is the Greek letter used by statisticians to represent one standard deviation or the variability of any normally distributed sample.

Second:  A commitment to improvement. Six Sigma is a philosophy that we pursue this level of quality in our critical customer deliverables.

Third:  A practice. Six Sigma is the structured, disciplined, data-driven application of appropriate methodologies to eliminate defects. There are several primary methodologies:– DMAIC (Define, Measure, Analyze, Improve and Control) – DMADV (Define, Measure, Analyze, Design and Verify) – Lean Six Sigma

First:  A goal. It is 3.4 defects per million opportunities. Sigma is the Greek letter used by statisticians to represent one standard deviation or the variability of any normally distributed sample.

Second:  A commitment to improvement. Six Sigma is a philosophy that we pursue this level of quality in our critical customer deliverables.

Third:  A practice. Six Sigma is the structured, disciplined, data-driven application of appropriate methodologies to eliminate defects. There are several primary methodologies:– DMAIC (Define, Measure, Analyze, Improve and Control) – DMADV (Define, Measure, Analyze, Design and Verify) – Lean Six Sigma

In 1987, Motorola committed itself to a

quality goal of:

In 1987, Motorola committed itself to a

quality goal of:

In 1987, Motorola committed itself to a quality goal of:

In 1987, Motorola committed itself to a quality goal of:

10-times improvement by 198910-times improvement by 1989

In 1987, Motorola committed itself to a quality goal of:

In 1987, Motorola committed itself to a quality goal of:

10-times improvement by 1989

100-times improvement by 1991

10-times improvement by 1989

100-times improvement by 1991

In 1987, Motorola committed itself to a quality goal of:

In 1987, Motorola committed itself to a quality goal of:

10-times improvement by 1989

100-times improvement by 1991

Six Sigma capability by 1992

10-times improvement by 1989

100-times improvement by 1991

Six Sigma capability by 1992

In 1987, Motorola committed itself to a quality goal of:

In 1987, Motorola committed itself to a quality goal of:

10-times improvement by 1989

100-times improvement by 1991

Six Sigma capability by 1992

10-times improvement by 1989

100-times improvement by 1991

Six Sigma capability by 1992

These goals were met and even exceeded in most products and processes.

In 1987, Motorola committed itself to a quality goal of:

In 1987, Motorola committed itself to a quality goal of:

10-times improvement by 1989

100-times improvement by 1991

Six Sigma capability by 1992

10-times improvement by 1989

100-times improvement by 1991

Six Sigma capability by 1992

These goals were met and even exceeded in most products and processes.

“At the time, none of us knew how to achieve this Six Sigma goal. But, in our drive for perfection, we were committed to reach a defect rate of just 3.4 parts per million (ppm) in each step of our processes.”

“At the time, none of us knew how to achieve this Six Sigma goal. But, in our drive for perfection, we were committed to reach a defect rate of just 3.4 parts per million (ppm) in each step of our processes.”

George FisherFormer Chairman and CEO, Motorola

George FisherFormer Chairman and CEO, Motorola

Motorola’s Six Sigma Efforts in 1992 and BeyondMotorola’s Six Sigma Efforts in 1992 and Beyond

Continue our efforts to achieve Six Sigma results – and beyond – in everything we do.

Change our metrics from parts per million to parts per billion (ppb).

Go forward with a goal of 10-times reduction in defects every two years.

Continue our efforts to achieve Six Sigma results – and beyond – in everything we do.

Change our metrics from parts per million to parts per billion (ppb).

Go forward with a goal of 10-times reduction in defects every two years.

Leadership for the New EraLeadership for the New Era

Leadership for the New EraLeadership for the New Era

Keep abreast of changes Keep abreast of changes

Analyzing Your CompetitorsAnalyzing Your Competitors

Potential Competitors– Emergent Competitors– New Competitors– Substitute Competitors

The Company

Current Competitors– Direct Competitors– Horizontal Competitors– Vertical Competitors– Substitute Competitors

Current Competitors Exiting

FutureCompetitors

Improvement StrategyImprovement Strategy

LOOK INLOOK INLearn about your own practices

LOOK OUTLOOK OUTLearn about best practices of others

LOOK AHEADLOOK AHEADIDEAS to plan improvements “Copy” Adapt Innovate

TAKE ACTIONTAKE ACTIONMAKE CHANGES in practices

Keep abreast of changes Learn to manage “early vs. late adopters”

Keep abreast of changes Learn to manage “early vs. late adopters”

Leadership for the New EraLeadership for the New Era

Learn to Manage“Early vs. Late Adopters”Learn to Manage“Early vs. Late Adopters”

Encourage the minority viewpoint Value the differences Empower team networks

– Leader one day, follower the next– Appointed “devil’s advocate”– Reward for wearing the “big hat”

Councils (technology, manufacturing, software, training) populated by careful mix of early and late adopters

Encourage the minority viewpoint Value the differences Empower team networks

– Leader one day, follower the next– Appointed “devil’s advocate”– Reward for wearing the “big hat”

Councils (technology, manufacturing, software, training) populated by careful mix of early and late adopters

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay- ignorant

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay- ignorant

Leadership for the New EraLeadership for the New Era

Be Willing to Be IgnorantBe Willing to Be Ignorant

New definition of leader– Ask, don’t tell– Envision, enable, empower

Dramatic reduction in number of operations reviews, presentations

Experts recognized at all levels Meritocracy vs. hierarchy

New definition of leader– Ask, don’t tell– Envision, enable, empower

Dramatic reduction in number of operations reviews, presentations

Experts recognized at all levels Meritocracy vs. hierarchy

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay-ignorant Open to coaching

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay-ignorant Open to coaching

Leadership for the New EraLeadership for the New Era

Be Open to CoachingBe Open to Coaching

360o feedback initiatives worldwide Focus on performance enhancement not

appraisal Formal mentoring programs (new-hires,

fresh-outs, high potentials) Role model leadership Sharing of best practices

360o feedback initiatives worldwide Focus on performance enhancement not

appraisal Formal mentoring programs (new-hires,

fresh-outs, high potentials) Role model leadership Sharing of best practices

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay-ignorant Open to coaching Build on strengths

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay-ignorant Open to coaching Build on strengths

Leadership for the New EraLeadership for the New Era

Build on StrengthsBuild on Strengths

Vision-driven, values-based Strengths

– Boldness– Creativity– Counter-intuitive thinking– Customer focus– People– Integrity– Speed of learning

Vision-driven, values-based Strengths

– Boldness– Creativity– Counter-intuitive thinking– Customer focus– People– Integrity– Speed of learning

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay-ignorant Open to coaching Build on strengths Challenge assumptions

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay-ignorant Open to coaching Build on strengths Challenge assumptions

Leadership for the New EraLeadership for the New Era

Challenge AssumptionsChallenge Assumptions

Continuous improvement culture– Six Sigma– 10X cycle time reduction– Customer satisfaction indices– Employee training– New product development

Continuous improvement culture– Six Sigma– 10X cycle time reduction– Customer satisfaction indices– Employee training– New product development

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay-ignorant Open to coaching Build on strengths Challenge assumptions Think the unthinkable

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay-ignorant Open to coaching Build on strengths Challenge assumptions Think the unthinkable

Leadership for the New EraLeadership for the New Era

Think the UnthinkableHistorical ExamplesThink the UnthinkableHistorical Examples

Hospital wants to enhance comfort of terminally ill patients… Benchmarks Ritz Carlton hotels.

Southwest Air wants to differentiate by on-time arrivals/ departures - Benchmarks Indy 500 pit crews for speed.

Disposable Cameras - Throw away camera instead of box it’s in.

Instead of us making show for you, you make it for us – America’s Funniest Home Videos.

Hospital wants to enhance comfort of terminally ill patients… Benchmarks Ritz Carlton hotels.

Southwest Air wants to differentiate by on-time arrivals/ departures - Benchmarks Indy 500 pit crews for speed.

Disposable Cameras - Throw away camera instead of box it’s in.

Instead of us making show for you, you make it for us – America’s Funniest Home Videos.

Leadership for the New EraLeadership for the New Era

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay-ignorant Open to coaching Build on strengths Challenge assumptions Think the unthinkable Lead by example

Keep abreast of changes Learn to manage “early vs. late adopters” Willing to be-not stay-ignorant Open to coaching Build on strengths Challenge assumptions Think the unthinkable Lead by example

“Example is not the main thing in influencing

others. It is the only thing.”

“Example is not the main thing in influencing

others. It is the only thing.”

- Albert Schweitzer- Albert Schweitzer

“The Speed of the Leader

Determines the Rate of the Pack.”

You Can Stand Still and Get Buried by the Avalanche

… or You Can Learn to Ski

You Can Stand Still and Get Buried by the Avalanche

… or You Can Learn to Ski

Presentation by:

Michael G. WinstonLean Six Sigma Summit 2008May 1, 2008Chicago, Illinoiswww.businessthoughtleader.com

The Leadership Promise… In a Lean and Six Sigma World

A Focused Strategy Unleashes CreativityA Focused Strategy Unleashes Creativity

Know What Matters Most Identify the few most important drivers of value in

your group. Focus your agenda almost exclusively on those

drivers. Communicate those priorities relentlessly; do not

fear repetition.• What good is your knowing if they don’t.• Constantly test for shared understanding.

Ensure reporting appropriately supports that focus.– Don’t drown in data for data’s sake.– Watch the important metrics and take deeper

dives when necessary.

Know What Matters Most Identify the few most important drivers of value in

your group. Focus your agenda almost exclusively on those

drivers. Communicate those priorities relentlessly; do not

fear repetition.• What good is your knowing if they don’t.• Constantly test for shared understanding.

Ensure reporting appropriately supports that focus.– Don’t drown in data for data’s sake.– Watch the important metrics and take deeper

dives when necessary.

A Focused Strategy Unleashes CreativityA Focused Strategy Unleashes Creativity

Write a concise statement describing your group’s contribution to shareholder value.– Focus on tangible contributions to revenue, margins,

productivity and growth. Identify the 5-7 departmental goals that most directly

drive that contribution. Write down 3-5 actions you can take tomorrow to

bring focus and discipline to your group.– Eliminate redundant/ non- value- added work.– Drop a routine that’s not connected to specific goals.

Share your written “hot list” with a partner. State by when you will have taken action on your “hot list,” and make a telephone appointment for that day.

Write a concise statement describing your group’s contribution to shareholder value.– Focus on tangible contributions to revenue, margins,

productivity and growth. Identify the 5-7 departmental goals that most directly

drive that contribution. Write down 3-5 actions you can take tomorrow to

bring focus and discipline to your group.– Eliminate redundant/ non- value- added work.– Drop a routine that’s not connected to specific goals.

Share your written “hot list” with a partner. State by when you will have taken action on your “hot list,” and make a telephone appointment for that day.

Activity- The Hot List

A Focused Strategy Unleashes CreativityA Focused Strategy Unleashes Creativity

Activity- Align Reporting & Metrics with Goals & Results

Review your statement of contribution to shareholder value.

Review your most crucial goals for accuracy. What reporting and metrics do you use to monitor

progress?– What must be increased? Bolstered?– What is redundant, wasteful, non-value-added?

Activity- Align Reporting & Metrics with Goals & Results

Review your statement of contribution to shareholder value.

Review your most crucial goals for accuracy. What reporting and metrics do you use to monitor

progress?– What must be increased? Bolstered?– What is redundant, wasteful, non-value-added?