Adapting to Troubled Times

If, as Sophocles said, "There is no success without hardship," then the current economic environment is a perfect opportunity for those in the quality field to lead the drive to success.

As we react to the disheartening daily news from Wall Street and other financial capitals around the world, we need to ask ourselves: How can quality help? How can it position companies for success? What should the role of quality be in these times?

Quality personnel should recognize the economic climate as an opportunity to demonstrate the impact quality can have. But it’s up to quality and Six Sigma leaders to adapt their skill sets, techniques, tools and leadership styles to help their companies navigate the troubled waters.

This will demonstrate to the organization’s senior management that their quality teams are nimble and quick to react to a rapidly changing economic environment. It will show that these members of the workforce can support the bottom line by delivering hard savings.

There are several practical tips to help you do just that. While you may be doing many of these tasks already, we hope these 12 points serve as a reminder of other actions that may be helpful to you.

We have grouped our recommendations into three categories: immediate, near term and long term, or strategic. Immediate activities are tasks that can add value within the next 30 days; near-term activities are those tasks that can help you in the 30-day to six-month window; and long-term activities are those that require a window of six to 18 months.

In every case, leveraging internal company relationship networks and a deep understanding of where all current improvement projects stand will not only help you better prioritize, but will also allow you to enhance the quality team’s credibility exponentially.

Immediate actions

Identify the gaps. Connect with the finance department to understand the size of the company’s profit-and-loss gap. Get the numbers for the entire organization and for each functional area.

Focus on the numbers. Shift your team’s focus from projects centered on metrics improvement to cost of poor quality (COPQ) reduction. Accelerate projects that deliver hard dollars vs. those that drive productivity improvement or cost avoidance. Communicate to leadership any potential projects that would have an immediate revenue or COPQ impact.

Prepare a list of your top 10 project opportunities for senior leadership approval and highlight those with "quick hit" opportunities.

Use lean and kaizen. Reach out to the functional areas tasked with the largest dollar reduction targets and offer to help via brainstorming sessions. This can be accomplished through kaizen events or by offering quick failure mode effects analysis (FMEA) sessions for any process modification opportunities that have already surfaced. Approach transaction-heavy departments tasked with headcount reduction with a proposal to run lean capacity analyses to help them identify areas of opportunity. Then deploy other lean tools, such as value stream mapping, to determine the size of the opportunity for each target process, while removing waste. This is a perfect time to organize lean or kaizen events that could help implement rapid change. This may also require you to lead a few refresher sessions on lean tools.

Be proactive. Pitch bold ideas—for example, outsourcing or off-shoring—that will yield savings in the next six to 12 months and offer to get the analysis under way immediately. This will allow you to leverage your financial analysis skills, as well as tools such as FMEA, in support of initiatives that may be new to your company. Table 1 provides a sample of proposed sigma tools in support of reengineering efforts that may apply to certain functional areas.

Near-term thinking

Stay customer focused. This is not the time to impact the quality of your firm’s products and services negatively just because the attention is on cutting costs. Reach out to your customers and see how you can help them. They are also feeling the pain of the economy.

Communicate. Continue to share and elevate any dashboard or scorecard data related to process performance or voice of the customer feedback that may be monitored and managed by a quality project management office. Often, hard times and budget cuts become excuses for reducing quality performance targets. Make sure everyone knows the quality of your products and services is more important than ever.

Stay on course. Keep pushing your ongoing quality deployment program. Be flexible and adjust your plan, but do not put the program on hold. Document all the actions you are taking in the short term to ensure sustainability.
Keep training on the radar. This is a double-edged sword. If leadership is committed to maintaining staff during the downturn, use this time to complete any required training. If times require you to minimize training and travel, use your quality staff to assist in coaching more projects that will deliver results.

Long-term strategy
Get close to senior management. Help senior management connect the dots by linking any cost savings your Six Sigma projects may yield to an opportunity for reinvestment in the business (R&D, marketing and technology).
Hold people accountable. Partner with the finance team to flesh out timing of savings availability and hold project teams accountable for delivering the benefits. For example, at one Fortune 100 company, a senior executive in each functional area was accountable for the results of Six Sigma and other business transformation projects.

Establish targets. Take advantage of the economic environment to pitch the concept of setting dollar targets at the company, department and project levels, or propose dollar and metric targets for 2009 to support your process excellence initiative. Make sure to get your CFO’s buy-in first.
Be strategic. Use this time to evaluate your strategic market position and competition. Establish partnerships with the corporate strategy function. Align process metrics with strategy maps.

Stay in the foreground
We face challenging economic times. But this also presents an excellent opportunity for quality practitioners to shine and demonstrate that their technical, leadership and change management skills are up to the challenge and can quickly adapt to any situation to support stakeholder expectations.

Companies will also benefit from taking advantage of the expertise that resides in their quality groups. By quickly redeploying these skills, they can create opportunities to free up funds for reinvestment when their competitors may be retreating. This will ensure that quality remains at the forefront of the effort to help maintain or increase customer loyalty.

The quality function must not migrate to the background as a result of the economic downturn. And it won’t, as long as you can demonstrate the value you can deliver to the bottom line and top line growth of the company.

 Reference ASQ