This is a tool developed by TXM to engage employees in the business to solve problems. Every business runs into problems.
This tool uses a system where there is quick, on-the-spot action to find and address the root causes of what’s gone wrong. It also places a discipline on team leaders and first line supervisors to fix problems themselves rather than constantly fire fighting or referring problems to management to solve.
McLean says: “The whole idea of lean problem-solving is you don’t delegate the problem upwards to special problem solvers,’’ McLean says. “You don’t have trouble shooters who solve all the problems. The idea is that it’s everyone’s job to solve problems.”
So, for example, SPED in an office environment would involve having regular 10 to 15 minute meetings with all the metrics and KPIs on a white board. The aim of the meeting is to identify problems, and fix them.
McLean says: “Maybe there would be something that wasn’t going well. Maybe you had a quality issue or a breakdown or let down a customer badly.”
This would be referred to a magnetic “concern strip” that has a table identifying the problem, along with short-term and long-term solutions. There would be a discussion around that.
Managers would tackle the problem using what’s termed as the “plan-do-check-act cycle” used by scientists.
“The scientist will examine the phenomenon that he is studying, and then he will design an experiment and carry it out. He will check the results and report on the results and he might change practice as a result of that,’’ he says.
The same model is used by the managers. When a problem is identified, solutions (experiments) are developed and implemented. These will be monitored using the SPED system of meetings. If it doesn’t work, another solution is arrived at. You keep doing it until it gets results. All of this is supervised and checked rigorously using the SPED tool.
These are two tools used by human resources departments. They both work off the same modules.
The tools are less about people management and more about the administrative side of HR. They keep all the employee records for all sorts of issues like absenteeism and payroll, including bonuses and people’s position descriptions. These are tools that allow companies to be on top of what everyone is doing in the workplace, which is absolutely critical for growing companies.
Margaret Harrison, who runs Our HR Company, says: “It’s like a personnel management system. It’s not really a human resources management system. It is usually run by an HR assistant.
“With PeopleSoft, you can put in whether a person has had a black mark against them, or those sorts of things, but it doesn’t help you manage your people. It just helps you manage the metrics around your people like absenteeism, your sick leave and what people are paid. It’s record keeping, it’s a data base.”
She says the two tools are used by most big Australian companies. She says about 60% of the Australian workforce is on PeopleSoft.
“It’s very good tool for pulling up reports for boards and for executive meetings,’’ Harrison says. If you want to talk about numbers on the payroll, it will give you full-time, part-time and casuals. So if you want to talk about how much your payroll is costing you, you can get that information exact.”
Six Sigma has been around for more than 30 years. It is a statistical method of analysis designed to reduce defects, lower costs, and improve customer satisfaction. Originally developed by Motorola back in 1985 for application in a manufacturing environment and made popular by GE under Jack Welch, it has since been adopted across a whole range of organisations including non-profit bodies. Companies that have used it in Australia include Telstra, Commonwealth Bank, ANZ, Westpac, BHP-Billiton and American Express.
Six Sigma is a process improvement tool designed to eliminate variability in processes, which in effect reduces costs. At the same time, there is a strong focus on the customer. Six Sigma is actually a statistical term that measures how far a process deviates from the average, measuring the number of standard deviations away from the mean. It compares the output of a process with what the customer requires.
Six Sigma translates to 3.4 defects for every one million actions. Put another way, that translates to 99.99968% accuracy or almost no defects at all. Six Sigma turns a business problem into a statistical problem that’s solved statistically. It is based on the old Total Quality Management which aims at eliminating waste and variation.
It works on three levels: customer level where feedback from customers identifies problems; process level, which focuses on removing inefficiencies inside the organisation, for example, how many times something has to be checked and how many approvals does a decision have to go through; and executive level where the heat is on the leadership to make informed decisions.
While Six Sigma is popular, it does create a bureaucracy of specialists of Six Sigma white belts, yellow belts, green belts, black belts and master black belts. Their job is to ensure things are running to Six Sigma efficiency. Using Six Sigma, companies have improved their operations and saved billions of dollars.
All these tools are designed to help businesses move into the next stage of their development. They are about structure and process, and managing growth.
You can follow Leon Gettler on Twitter @leongettler.
