Book Summary Preview : The Power of Six Sigma

The Big Idea
Six Sigma is a management philosophy that can radically change the way you treat mistakes in the workplace. It is focused on eliminating these mistakes, teaching personnel how to improve the conduct of business in the process.

Joe and Larry
One seemingly ordinary day, Joe finds himself in his office carrying a cardboard box to pack his belongings after getting laid off. Anxious and still in a state of shock and disbelief, Joe reflects on what appears to be a bleak future for him and his family. Flipping through a pile of business cards accumulated through the years, he stumbles upon the card of Larry, his former colleague when he was still starting up. They decide to catch up and talk over lunch. What transpires is a mind-opening conversation between the two men about the use of the managerial philosophy called Six Sigma and how it can dramatically improve quality and eliminate botches in the workplace to ensure greater profit.

What is Six Sigma?
Six Sigma represents a statistical measure and a management philosophy. The Greek letter Sigma, used mathematically to designate standard deviation, is the measure used to determine how good or bad the performance of a process is. In other words, it represents how many mistakes a company commits while accomplishing its tasks.

On the other hand, the Six in “Six Sigma” represents the levels of perfection each company attains. One Sigma equates to making about 700,000 defects per million opportunities, or doing things right 30% of the time. Two Sigma is better with a little over 300,000 mistakes per million opportunities. Most companies operate between Three and Four Sigma, which means they make between approximately 67,000 and 6,000 mistakes per million chances, respectively. If you’re operating at 3.8 Sigma, that means you’re getting it right 99% of the time.

According to Larry
Most people will say that you can’t do better than operating at 3.8 Sigma or getting things done right 99% of the time. But it turns out even 1% margin of error can add up to a lot of mistakes pretty fast. Getting it right 99% of the time is the equivalent of 20,000 lost articles of mail every hour. It’s 5,000 botched surgical procedures every week. It’s four accidents per day at major airports.

What’s so great about Six Sigma?
Six Sigma gives employees well-defined roles and a clear structure to their tasks. And it works best when everyone is involved, from the CEO to the guys in the mailroom. “In fact, Six Sigma projects are usually run by guys in the middle of the organization.

Larry says
In football, you’ve got two ways to win games. The first is making more spectacular plays, like long passes and big runs and great interceptions. That’s the stuff that makes the highlight films. But you can also win games by making fewer mistakes: fewer penalties, fewer fumbles, fewer interceptions. It might not be as spectacular as all the big plays, but it’s just as important to the bottom line. And the thing is, while you need spectacular players to make spectacular plays, anyone and everyone can focus on making fewer mistakes.

Companies are the same way. They can make more money by coming up with great inventions, hiring away some real stars, or buying other companies. These make the headlines. But good companies also focus on not making mistakes: not wasting time or materials, not making errors in production or service delivery, not getting sloppy in doing what they do best. . . . . . . . . . .

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