Discussion Questions
1. What will be the benefits, costs, and risks of the Six Sigma program and how will they
be tracked and reported?
2. How should various functional areas in the organization be included in the Six Sigma
initiative and what role should senior and middle management play in the change
initiative?
3. What role should Six Sigma play in corporate strategy?
4. What are the human resource implications for deploying Six Sigma (e.g. employee
selection, roles, organizational structure, reward systems)?
1. What will be the benefits, costs, and risks of the Six Sigma program and how will
they be tracked and reported?
Benefits will be increased earnings growth, improved quality, a common language for
suppliers, employees and customers, accelerated product commercialization, and
leadership development for employees.
Finance people from each division will be assigned to validate projected financial results
and will be assigned to track these results when the programs are implemented. All other
non-financial benefits (customer satisfaction, customer loyalty, employee satisfaction,
employee turnover, innovation, etc.) will also be tracked by the Six Sigma organization.
Costs are the outside consultant training fees for top management and master blackbelts.
This was $25,000 to $40,000/person trained. Another cost was reallocation of 2-4% of full
time resources in each functional area to become full-time blackbelts. This takes resources
away from existing activities. Total costs for the program at 3M were confidential but there
were a large number of top management folks trained at the $40,000/head rate.
Risks are spending large amounts of money and achieving marginal results from the
improvements. For example, savings might be documented on a project basis, but won’t
show up on the bottom line due to overall company loss of sales or increasing costs that
are not subject to Six Sigma projects.
2. How should various functional areas in the organization be included in the Six
Sigma initiative and what role should senior and middle management play in the
change initiative?
Some argue that all functions will be included in the Six Sigma initiative. It’s important
that all areas of the company improve and get more efficient and better at meeting the
needs of internal and external customers to support the corporate goals. Legal, for example
may run a project to reduce the cycle time for filing patents or to reduce the variability in
this process. HR may undertake a process improvement related to the recruiting and
selection of new employees. Below, we discuss the question of whether R&D should be
