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Applying Six Sigma Principles in Small Organizations

written by: Heidi Wiesenfelder•edited by: Michele McDonough•updated: 5/18/2011

Six Sigma is usually deployed in large companies. It is a comprehensive mindset and methodology for managing a business and making improvements. Yet even small businesses can benefit from the principles of Six Sigma.

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    Six Sigma and Your Business

    Image by Sergio Roberto via stock.xchng The Six Sigma framework comprises a full set of roles, tools, management techniques and project methodologies. It was originally designed for use in the manufacturing environment in the 1980s. It has since evolved and now is a very popular program throughout manufacturing and service industries.

    As a sole proprietor or other small business owner, you will not have the capability nor the need to implement a full-scale Six Sigma program. Devoting the time and human resources to DMAIC process improvement projects may not be an option, and you should not expect to employ full-time Black Belts. But many of the foundational Six Sigma principles can be readily used in the small business setting to improve your operations efficiency and your results.

    Clarify customer requirements: Six Sigma focuses on aligning process performance with customers' requirements for quality. Whether you are dealing with your end users and retail customers or your internal customers such as employees, be sure not to make assumptions about what matters to your customers. Let them tell you what matters to them, and how well your business delivers relative to their expectations.

    Measure performance: As a business owner you have no doubt heard the phrase, "You can't manage what you can't measure." To maximize your success you need to be continually aware of your business performance in key areas. Determine how you define success for your business, and how you will measure your performance relative to that goal. Establish a method of obtaining data regularly so you can assess your progress and make adjustments as needed.

    Understand processes: In one corporation that used Six Sigma we had a saying: "It's the process, not the people." This saying served to remind business leaders that while the tendency may be to place blame on individuals when performance is not up to par, in most cases people will perform well as long as they are provided with the right tools and processes. If performance is below your expectations, start by assuming that there is a problem with the process and systems in place, rather than assuming that people are causing the issue. Look for technological limitations, process bottlenecks, or other process problems that may be limiting what your employees and business partners can deliver, and continually improve your processes.

    Address root causes: Before implementing changes to fix a problem, do some digging to be sure you are not just applying a bandaid or temporarily alleviating symptoms of the problem. Use the "5 Whys" technique to get to the root cause of a problem. Don't settle for superficial answers to the question, "Why is this happening?" Instead keep asking "why?" until you get to the true source of the issue, then address that root cause. In this way you can create sustainable improvements and reduce the likelihood that the same issue will arise again.

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    Verify improvements: Continuous improvement is one of the main Six Sigma principles, and as an entrepreneur you are likely always looking to improve various aspects of your business. Resist the temptation to keep making changes that you believe will bring benefits without confirming that they actually do so. When you can, test out changes on a small scale first, or implement improvements in a way that is reversible should the results not meet your needs. For example, if you are making changes to your website, track results under the old and new versions to determine how it impacts your sales and customer satisfaction. Be prepared to stick with the original layout and content should it prove superior.

    Communicate effectively: Managing a small business can at times be overwhelming, and it may seem like all you can do just to keep up with everything. Remember though that taking the time to effectively communicate with your employees, customers and suppliers goes a long way in keeping your operations running smoothly. Whenever possible, let others know before you make changes, and explain the reasons for any changes. Provide clear written information describing your policies, procedures and expectations. Consider creating a simple communication plan for any major initiatives or changes with broad impact, detailing everyone who will be affected as well as how and when you will notify them.

    Accountability: Hold your employees, vendors and partners accountable for their responsibilities and commitments. Communicating your expectations is a great first step. Follow through by addressing any issues that arise and ensuring that you have the right people in the right roles. As part of your measurement procedures, make sure you tie compensation or decisions about vendor selection to actual results. Model accountability yourself in dealing with everyone you encounter as you run your business.

    By using these principles you will be well on your way to sustainable success as an entrepreneur.

    For more information:

    To learn more about the principles of Six Sigma, check out these articles:

    Six Sigma 101 (5-part series)

    Introduction to DMAIC

    Six Sigma Roles

    Business Process Management System (4-part series)

    The Importance of Process Mapping