Nobodys perfect. Thats what Mom has told me, and its pretty safe to assume, with a few possible exceptions (well, maybe just you and me), shes right.
But household-name companies have been testing Moms wisdom by adopting the Six Sigma methodology to address quality concerns throughout the organization. One often-cited example is GE, which defines Six Sigma as a highly disciplined process that helps us focus on developing and delivering near-perfect products and services. The word Sigma is a statistical term that measures how far a given process deviates from perfection. GEs document What Is Six Sigma: The Roadmap to Customer Impact continues: The central idea behind Six Sigma is that if you can measure how many defects you have in a process, you can systematically figure out how to eliminate them and get as close to zero defects as possible.
Since skepticism is a journalistic occupational hazard, I frequently question how much of any buzz is hype or fad. To Six Sigmas credit, its had some longevity. Nearing its 20th birthday, the concept was introduced in 1986 by a Motorola senior engineer and scientist. Alongside Motorolas well-known products, the company offers Motorola University, a service that trains other companies in Six Sigma. Motorola Universitys site provides such documented results as: Motorola saving $17 billion from 1986 to 2004 and GE saving $750 million by year-end 1998 and cutting invoice defects and disputes by 98 percent.
Six Sigma also has spawned a mini-industry of information providers. For example, McGraw-Hill was kind enough to share some of its many volumes on the topic with me and indicate several upcoming titles. Then theres isixsigma, an online resource (with a financial services channel), and the International Quality & Productivity Center (IQPC), which organizes conferences, among them a Six Sigma for financial services event held last July.
That event tapped banking organizations as well as consultant Bryan Carey of DeLeeuw Associates, who also published on the isixsigma site an article about merging financial institutions. In it, he says, Most financial institutions, especially banks, are organized around functional or silo viewslooking inward at work being done and not outward at the customers and their desires. . . . Six Sigma adopts the view that businesses are comprised of processes that start with customer needs and should end with delighted customers using the product or service.
Especially banks? Im not too sure about that. The pages of this magazine have documented the pervasiveness of silos within insurance carriers and all the problems those silos create. How many insurers have attained one view of the customer? Have they been able to eliminate redundancies in product offerings and systems that support those offerings in different lines of business? Are these questions almost rhetorical?
Some carriers now are taking Six Sigma seriously (see Whats Ailing You? p. 16). It may not be the only solution to consider, it may fail to meet expectations, and it likely doesnt produce results overnight, but then Mom also likes to say, Theres nothing for nothing in life.
Sharon S. Schwartzman
Editor-in-Chief
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