Introduction to the New Six Sigma

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Motorola University developed the New Six Sigma because we had to. We could see our Motorola businesses as well as our customers and suppliers struggling with the same critical issues. We knew that the classic Six Sigma methodology—focus on defects and variability reduction—had served our business managers quite effectively during much of the 1990s, and we had helped our customers and suppliers apply Six Sigma to dramatically improve their business processes. But we could also see that Six Sigma was losing its relevance to many of our business leaders. They perceived the methodology as too complex, effective only in manufacturing and engineering environments, and too slow in yielding results. We could also see, however, that many of our leaders had taken the important elements of Six Sigma—like understanding customer requirements, continuously driving process improvement, and using statistical analysis to drive fact-based decision making—and moved them into a broader, integrated approach that flawlessly executed their full business strategies. The New Six Sigma builds on the power of the Six Sigma methodology we pioneered in the 1980s and introduced to many businesses in the 1990s, yet it benefits from the lessons we learned as we helped our customers and suppliers implement the methodology.

The new Six Sigma is an overall business improvement method.

The New Six Sigma solves the paradox that leaders find themselves in today of attempting to simultaneously achieve short-term financial gains through fast business improvement projects while building future capability in both key talent and critical processes.

By integrating tools and processes such as scorecards, business process redesign, high-performance teams, and continuous monitoring of key business metrics, the New Six Sigma provides a practical approach and useful tools for leaders looking to drive balanced execution.

Table 2.1 outlines the four key leadership principles, discerned through studying organizations that successfully implemented Six Sigma. These leadership principles anchor the New Six Sigma.1

Table 2.1. Leadership Principles of the New Six Sigma

Key Leadership Principle	Description
Align	Using the performance excellence business model (based on the Malcolm Baldrige criteria), link customer requirements to business strategy and core business processes. Create strategy execution targets, stretch goals, and appropriate measures. The goal is to provide sustainable, measurable bottom-line results that drive business goal achievement.
Mobilize	Empower teams to drive improvements using projects selected by executives, project management methodology, and Six Sigma methods. Organize team efforts with clear charters, success criteria, and rigorous reviews. Provide teams with just-in-time training and empower them to act.
Accelerate	Employ an action learning methodology by combining structured education with real-time project work and coaching to quickly bridge the gap from learning to doing. The motivation to act is perishable yet essential for driving projects to timely results.
Govern	Drive the execution of strategy by managing scorecard metrics. Structured review processes involve reviewing dashboards of results as well as drilling into process and project details where needed. Barriers lift when leaders share best practices.

The New Six Sigma integrates best-practice processes with tools designed to help leaders in driving their business strategy for dramatic short-term business results while building sustained future capability.

Table 2.2 shows some of the best practices that were included in the New Six Sigma methodology.

Table 2.2. Best Practices of the New Six Sigma

Best Practice Process or Tool	Definition or Purpose
Voice of the Customer (VOC)	Six Sigma methods translate abstract desires from customers into concrete specifications and organizational requirements. Leaders use these data to transform the strategic goals and processes so that they deliver value.
Balanced Scorecard	Executive teams actively build scorecards to quickly achieve alignment on their organization's vision, mission, strategic objectives, breakthrough initiatives, and the metrics used for monitoring progress. The scorecard itself provides the vehicle for clear and concise communication of vision, mission, objectives, metrics, and initiatives to the entire organization.
Accelerated Business Improvement	Business process redesign provides the tools that enable the creation or redesign of the key business processes essential for delivering on the customer's expectations and achieving the goals articulated in the scorecard.
High-Performance Teams	High-performance teams are customer-focused, cross-functional teams with clear charters used to complete the projects most critical to the business improvement effort.
Six Sigma Black Belt Teams	Six Sigma Black Belt teams are: Employed against highly complex projects that require advanced statistical tools. Used when an advanced tool set is required to achieve: Process improvement. Process development. Product or service improvement. Product or service development.
Blitz Teams	Blitz Teams are employed when: It's clear what needs to improve. Detailed data analysis is not required. The consequences of not taking action outweigh the risks of making mistakes. Leaders are ready to support action.
Integrated Business Review	Executives use a dashboard—a summary of the status of metrics—to review the progress toward goals. Leaders drill into details when stoplights on the dashboard indicate unfavorable trends or goals. Details include process status and projects that aim to improve processes.

The next section uses the New Six Sigma methodology to provide leaders with a practical approach to achieving rapid business improvement while building sustainability into their business systems. It builds leaders' understanding of the four key insights (Align, Mobilize, Accelerate, Govern), and it guides them through the use of New Six Sigma practices and tools by providing real-world examples.

To clarify these concepts, we have combined Motorola's experiences with those of the many other companies who have practiced the New Six Sigma over the past few years. The case study that follows demonstrates how novel leadership principles and innovations make the New Six Sigma significantly better than the original.

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Six Sigma?The Present

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In the first years of the 21st century, leaders face a new reality. We must consistently generate positive, month-to-month financial results while continuously building a business that will sustain those results over the longer term. While balancing short term and long term has always concerned executives, today's environment demands performance along both dimensions. Fierce new competitors, demanding customers, tight talent supplies, and wildly fluctuating markets are a reality in almost every industry; meanwhile, investors show no willingness to wait for returns on their investments.

Executives attempting to chart a course through these waters feel schizophrenic and myopic. They work to answer weekly demands for an improved financial picture while trying to communicate a long-term vision and roadmap to customers, suppliers, and employees. Management approaches that have been successful in the past are no longer effective. Fortunately, in every industry there are executives who outperform their peers.

For the past few years, Motorola University has worked to understand what differentiates top-performing executive teams, both inside Motorola and across many industries. Remarkably, we've discovered important parallels between our findings and lessons from Six Sigma's past. Top-performing leadership teams demonstrate a keen sense of daily priorities. They also possess the ability to effectively execute those priorities while still maintaining a compelling vision for the future, and this enables others to act on that vision. Furthermore, top teams always operate ethically. To leverage these personal attributes, many executives have adopted common best practices that give them an edge in creating a vision, establishing priorities, enabling people to take action, and driving execution in a way that satisfies short-term demands while building capability for future growth. These best practices have been documented and incorporated into an approach to executive management and leadership that is the New Six Sigma.

The old Six Sigma was just a standard measure of goodness.

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History of Six Sigma

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By the early 1970s, Motorola had established itself as the world leader in wireless communications products, and it was battling Texas Instruments and Intel for the number one slot in semiconductor sales. In 1974, five of the top eight semiconductor manufacturers were American and three were European. But competition in the semiconductor market soon grew very fierce. Just five years later, in 1979, two of the top eight chip manufacturers were Japanese. The Japanese were also beginning to erode Motorola's lead in the U.S. paging market. These difficulties were prefigured in 1973, when Motorola, finding itself unable to compete in the consumer products market, sold its consumer electronics division to a Japanese company. The threat to the company's future was clearly on the horizon; nevertheless, a majority of Motorola's senior leaders ignored the warning signs.

In 1979, under the leadership of CEO Bob Galvin, a task force began to develop a plan for Motorola's renewal and growth. This work accelerated after Art Sundry, the most senior sales vice-president of the largest communications group, shouted "Our quality stinks" in the May 1979 officers meeting. Sundry's outburst resulted from feedback he received from customers and users of Motorola's communications products. Together, Galvin's task force and Sundry's research led to the creation of a four-point plan, rolled out in 1980, with the aim of securing Motorola's global leadership:

1. Global competitiveness? Ensuring market and product superiority by benchmarking the company against global competitors; designing products for global distribution; and breaking down trade barriers that kept Motorola products out of Japan and other international markets.

2. Participative management? Drawing on traditional Total Quality Management (TQM) philosophy to adapt the principals and methodology of quality circles to the Motorola culture; sharing profit improvements with all employees.

3. Quality improvements? Establishing goals of improving quality tenfold (10X) within five years and placing quality improvement goals in the incentive packages of all executives; this initiative sowed the seeds of Six Sigma.

4. Motorola Training and Education Center? Creating the precursor to Motorola University, which addressed the fact that the dramatic changes required in quality processes and management style would create a great incompetence in the workforce?not because of workers' unintelligence, but due to the insufficient information they received on how to meet the new job requirements.

Galvin selected senior executives to drive each of these four initiatives and had them report directly to his office.

The 10X quality improvement goal drove significant change in each of the business units. However, at this time, quality improvement efforts were focused exclusively on the manufacturing function because conventional wisdom dictated that manufacturing was the source of a majority of the problems and held the greatest promise for improvement.

Based on this premise, the company established the Motorola Manufacturing Institute (MMI) in 1984 under the direction of a senior manufacturing vice-president, Carlton Braun. This two-week program for senior manufacturing managers focused on developing and sharing quality improvement goals. In providing feedback, the first groups of managers who completed the program commented that the 10X quality improvement goal could never be achieved by focusing on the manufacturing function alone. Managers were convinced that all functions needed to be involved, particularly engineering design. These remarks resulted in improved courses and the refocus of the institute away from just manufacturing and toward all aspects of management.

Consequently, the institute, renamed the Motorola Management Institute, represented all business functions in every class. This institute served as a major catalyst in breaking down the silos that existed between functions. Quality improvements along with cost and cycle-time reductions could only be achieved through the involvement of all who impacted or were impacted by the development of new Motorola products and services. As a result, customers and suppliers began to get involved in the design of next-generation products. This part of Six Sigma's history reflects Motorola's earliest realization that all parts of the business impact the achievement of strategic outcomes and all efforts must be aligned toward improving results in order to reach the goals of improved quality and customer satisfaction.

Motorola still lacked a common metric for sharing and comparing improvement initiatives, and this deficiency served as a major barrier to alignment. Then, in late 1985, quality engineer Bill Smith, frustrated by his associate's rejection of his quality measurement ideas, scheduled a meeting with Bob Galvin. After listening to Smith's point of view, Galvin instructed Jack Germain, the corporate vice-president of Quality, to build on Smith's ideas.

As a result, Smith and a team of quality managers created a three-day program entitled "Design for Manufacturability" (DFM). Facilitated by a Motorola University designer, Ann Dille, DFM defined the "Six Steps to Six Sigma" and became the first required training program for all technical personnel worldwide. Another Motorola engineer, Craig Fullerton, developed and taught "Six Sigma Design Methodology" (SSDM?today called Design for Six Sigma, or DFSS, by most other companies). The Six Sigma Design Methodology focused on ensuring winning product design. Six Sigma now aligned all quality efforts around a common measurement process, and Six Sigma goals drove every team worldwide. Six Sigma's success led Motorola's managers to set an even more aggressive goal, from 10X to 100X improvement.

Participants in the initial implementation of the DFM program felt that all functions and not just the technical employees needed to use the Six Sigma methodology. A one-day course entitled "Understanding Six Sigma" was then developed for all nontechnical employees worldwide, and Motorolans began to use Six Sigma on everything from measuring training defects to financial effectiveness. At this point, Motorola had two of the major components of continuous improvement in place. All quality improvement efforts were now aligned around the concepts of Six Sigma, and all employees were mobilized by common Six Sigma goals and reward systems.

These efforts resulted in Motorola receiving the first Malcolm Baldrige National Quality Award from the U.S Government in 1988. In describing the corporation's renewal, one of the Malcolm Baldrige auditors commented that wherever he went and whomever he talked to, the Six Sigma concept was articulated and understood. The alignment of the culture around the quality goal had been achieved.

Six Sigma began as an initiative for improving quality rather than as a methodology for continuous business improvement. Once organizations achieved the Six Sigma goal, they stopped improving?they became "good enough." This mindset caused complacency that allowed quality to actually deteriorate.

By 1990, Motorola was struggling to reach Six Sigma in everything it did, yet it seemed to be stuck at 5.4 Sigma. Bill Wiggenhorn, president of Motorola University, proposed the establishment of a Six Sigma Research Institute (SSRI) to bring leading engineers and statisticians together with the goal of finding new ways to accelerate the achievement of "Six Sigma and Beyond." The SSRI became an alliance of IBM, Texas Instruments, Kodak, and others, all of which provided resources that drove the search for new quality improvement ideas. These efforts resulted in the adoption of new and powerful software tools required to analyze the large amounts of data generated by Six Sigma projects. The foundation of this work was a focus on the root cause of the problem and a reduction of sources of variability. Another key concept?that of the "Black Belt"?resulted from the SSRI.

A team of improvement experts from the SSRI companies, led by Motorola statistician Harrison "Skip" Weed, Ph.D., defined the first content and standards for a Black Belt based on concepts that originated with Motorola's statistical experts in Asia. Black Belts were originally intended to be improvement experts that led teams to ensure a high probability of success. But Weed's team decided that to achieve Black Belt recognition, candidates must demonstrate statistical, team, and business skill along with business impact. The output of the SSRI Black Belt work was shared with both the original companies in the alliance and non-alliance companies, and General Electric became one of the first non-alliance members to internalize the Six Sigma methodology. By this stage of Six Sigma's evolution, Motorola had successfully germinated three of the four major components of the business improvement model it nurtured into the model used today?the concepts of Alignment with business goals, Mobilizing teams, and Accelerating the speed to results.

To further institutionalize and accelerate the new culture of improvement, Motorola built new business processes and adopted a new learning standard. "Action learning" became the model for senior executive development and later Black Belt training. Teams of top executives were brought together to focus on critical issues (e.g., software development quality and moving into emerging markets). Motorola University designed and facilitated these executive meetings, during which participants gained new knowledge about the focus topic. The CEO directed executives to apply the new knowledge to their businesses and share this action learning with other businesses.

This process of "learning-action-feedback" accelerated change at an unprecedented rate, moving into the business units through the development of Total Customer Satisfaction (TCS) teams. Thousands of TCS teams were formed at every level to address problems in the workplace. These teams would pull together the people and resources necessary to improve the quality of the work in manufacturing, engineering, human resources, finance, and all other functions. TCS teams shared their results globally so that new learning taking place in one part of the world could be duplicated elsewhere. The development of the Six Sigma Black Belt Steering Committee, the Corporate Quality Steering Committee, and a global process of Quality System Reviews (QSR) further drove the institutionalization of the quality culture.

Motorola had learned that maintaining and even going beyond Six Sigma required strong leadership committed to the development and implementation of process: Alignment, Mobilization, Acceleration, and Governance. These concepts facilitate the creation of new cultures or the changing of existing ones within and across all business functions. Continuous improvement requires continuous change, which in turn requires continuous learning. Motorola University succeeded as a catalyst for continuous learning, and it proved that without refreshing and updating skills, improvement is not possible. Learning is at the heart of continuously improving quality and other important business results.

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