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By Tamer A. Hafez

The Master Black Belt strides into the room, his presence acknowledged by the bowed heads of his Black Belt proteges. He bows in return, rising back to his full height before slicing his left hand through the air in a swift, chopping motion. This perfect, silent gesture summons his warriors — the feared Green Belts who, with a moment’s notice, can execute the most difficult of commands. The Green Belts emerge, like magical moving shadows, from a darkened corner of the room, bow, and silently await their command.

This may seem like a thousand miles and a thousand years away from what the average manager experiences in everyday office life. Now, thanks to a popular, successful management system, the world of Black Belts and the world of Junior Accounts Receivable Clerks is coming together. How and why this is happening is a story that could be the key to a new era of profitability and growth for your company.

Survival in today’s increasingly competitive corporate arena requires every organization to have certain essential ongoing objectives: customer satisfaction, lower costs and improved process efficiency. Leadership in any of these areas is a trophy that no one organization can hold on to for long without sustained effort.

Is it any wonder, then, that many companies are waging a proverbial war to achieve these targets and become a benchmark among their competitors — even if it is only for a short period of time? Here in Egypt, a growing number of companies are even going so far as to help their employees earn karate-style belts.

Of course the belts these corporate ninjas are earning are metaphorical, part of a 20-year-old management philosophy known as Six Sigma. Just catching on in Egypt, the approach sits internationally atop a growing heap of management theories, remaining in vogue long after many trendy keywords have been left behind.

One reason for this is that Six Sigma is a genuinely quantitative, analytical system that uses real numbers and statistical analysis to solve problems, as opposed to any number of management theories that propose the “Five Secrets” of this or the “Three Steps” to that.

Six Sigma is all about quality — specifically, all about reducing “defects” in any given process, from manufacturing to data management. A Six Sigma process is one that will produce a defect — an unintended, “bad” result — less then 3.4 times out of every million times that the process is run.

Samia Abdel Latif directs the Institute of Quality Management at the American University in Cairo, one of the nation’s top Six Sigma training facilities. She says the institute offers the training because “it’s still a hot topic, despite the fact that it was founded in the 1980s.”

Even today, Egypt’s corporate world is not as ferociously competitive as most developed economies — Asia’s Seven Tigers, or even Dubai, for that matter. But with barriers to trade and commerce falling every year, foreign brands are pouring in and local upstarts are growing in number. Each and every one of them wants a piece of your pie — pie that is served in a market, remember, where brand loyalty is generally exceptionally low.

The key to survival lies within your organization itself.

In corporate wars, an organization should pay utmost attention to what is going on within. Six Sigma makes processes run more efficiently, so employees running them will be able to decrease the amount of “wait time” — the time an employee, decision-maker or customer must wait to get the required data, product or service.

Six Sigma also allows decision makers to get more accurate information, faster — leading to more accurate and timely decisions. Customer satisfaction will increase as they get what they want faster, thus increasing loyalty to the product or service. More importantly, Six Sigma helps identify potential points of failure within any process, and by anticipating problems, an organization can either avoid them or at least have a more effective damage-control process.

If done correctly, Six Sigma is cheaper and less risky than entering into open warfare with the competition to regain lost market share.

3M, the global diversified technology giant, was an early adopter of Six Sigma. Jean Assaad, 3M Regional Managing Director for Egypt and North Africa, explains that “Six Sigma was applied in 3M to achieve excellence in our business processes and customer-perceived quality. It provides leadership development throughout all disciplines within the corporation, providing a common approach to process management and instituting a common language throughout the corporation on a global basis.”

How you define Six Sigma often varies as a function of how it’s applied in your organization. For Assaad, Six Sigma is “a methodology to eliminate or substantially reduce defects at every level in the organization. A proactive means of achieving excellence in business processes. Its goals are sales growth, increased productivity and higher earnings.”

Six Sigma uses statistical and mathematical equations to identify where process defects are, how severe these defects are, and if these defects are in a critical process or a minor one.

Either way, it isn’t for the faint of heart: For Six Sigma to work as it was intended to, the entire company has to commit. Abdel Latif explains that top management needs to be aware of Six Sigma, and that there must be acceptance of the Six Sigma culture on a corporate level for it to have any effect on the organization. “Six Sigma needs commitment from top management, investment in training all employees (time, budget) and regular review of the progress done.” she says.

It is this pervasive quality that Jack Welch, legendary ex-CEO of General Electric, was referring to in 1998 when he was quoted in a BusinessWeek special report: “Six Sigma has spread like wildfire across the company and it’s transforming everything we do.”

Becoming a certified Six Sigma practitioner requires considerable training to become a Green Belt, Black Belt and, in some cases, Master Black Belt. Each level translates to a different role in a Six Sigma project.

Cairo’s SETTEC Training Center currently offers an introductory course on Six Sigma, which takes four to five days, at a cost of LE 4,500. AUC offers four levels of training: Orange Belt is basically a four to five day introductory course costing LE 900. Noha Bakr, AUC’s Six Sigma program officer says, “This course is important because it allows employees to get accustomed to the culture and expressions of Six Sigma,” adding that “Orange Belts don’t have a direct role in the Six Sigma project, they act as helping agents.”

AUC also offers Green Belt training — a 14-day course in which students are present two days per week for two sessions each day — for LE 2,500 plus $250. Green Belts implement Six Sigma projects along with their normal responsibilities within the organization. Asked which candidates should take this training, Bakr says, “It is based on their position within their organization, it is not necessary that they are managers — they have to be process experts and they have to be the best.”

Black Belt training is also offered at AUC. The 180-credit-hour course costs LE 15,000 plus $500. Black Belts are the leaders of Six Sigma projects and are fully responsible for describing, measuring, analyzing, improving and controlling processes in the project. According to Bakr, for Black Belt training, “participants need to be at the top of the triangle of the team. Being good at what they do is not enough, they need to have good soft skills, because Black Belts don’t have any direct authority on Green Belts — Green Belts are under the authority of their line-managers within the organization.”

Consequently, Black Belts need to be on very good terms with all of the organization’s managers to ensure their cooperation when it comes to borrowing Green Belts for a certain project.

Finally, there’s the Champion training course, which, according to Abdel Latif, targets mainly top management, allows top-level leaders to realize the benefits, commitments and culture of Six Sigma. It is required if any organization wants to become a Six Sigma organization. Assaad explains that “champions are usually the head of the organization — their role is to cut through bureaucracy if a problem arises.”

In addition to education for employees and management, companies buying into Six Sigma also have to invest in IT. According to Assaad, “3M has a universal database in the USA; all information is recorded on a monthly basis in this database (project details and results). This database is shared, so all 3M employees can view projects and replicate them in addition to some tools to run statistics, validate data, etc.”

Six Sigma is a data-driven methodology, so data management is crucial — everything must be recorded accurately and on a timely basis. For that to happen, the organization will need a very powerful and flexible ERP (Enterprise Resource Planning system) working throughout (See side bar for the challenges of installing an ERP).

As Assaad points out: “Six Sigma is a data and fact-driven approach versus a predominantly intuitive approach. Having reliable data and validating it is crucial to the outcome of the project.” Moreover, statistical tools must be comprehensive to be able to generate graphs, patterns and other statistics to give a clear picture of what is going on in each process.

‘There is a time and place for everything.’ This proverb is particularly applicable to Six Sigma, and there is always the question of when a process needs Six Sigma. Assaad says that, “Every division develops a hopper (pool of potential Six Sigma projects such as pains, barriers limiting growth, or a defective process). These hoppers are reviewed, prioritized using a C&E (Cause & Effect) matrix. Six Sigma projects are scoped and a team is assigned to lead this project.” Selecting the correct projects is crucial to determine the success of Six Sigma; projects must directly and significantly affect the organization’s performance in a positive way.

There are some kinds of processes that don’t suit the Six Sigma methodology and could yield negative results if changed in any way. Six Sigma is very good at what it does, which is improving processes. It would not work if the organization is trying to develop a new product or new technologies.

Six Sigma is a very sophisticated and advanced tool to cut costs, rather than increase revenues. Its input is facts and figures, its output processed facts and figures; the accuracy of the input dictates the value of the output. Accordingly, before any organization decides to take up Six Sigma, it must be willing to invest in hardware, software and human capital. Moreover, an organization must analyze its operations and processes carefully to be certain that Six Sigma is the correct tool.

The Challengesof Implementing an ERP Solution

There is nothing easier or faster than scribbling something on a piece of paper and leaving it for someone to act according to what you wrote. It takes two seconds. Using a computerized system, you need to know how the system works, to fill in certain fields and use the keyboard to do the typing and send it — it could take up to 10 minutes. Employees who have been using a paper and pencil will feel that the computer is slowing them down.

To handle this problem it all boils down to design. The IT engineer must understand how things are done manually and not try to impose change, but instead try to make the software work like the manual procedure in terms of simplicity of data entry and the availability of the statistics that the employees really need and use.

Many staff resist change, with the common cry being, “If it works, why change it?” This attitude has been around for the last century. Employees can sabotage change, and even if they don’t, they can just neglect it.

Solving this problem will be challenging, since it is related to a working culture that has been around for a very long time. One option is to communicate to the best of your ability how implementing such a system will benefit the employees. Will work become easier, less stressful, less risky, or more rewarding? Will it increase the company’s competitiveness, and therefore their job security? Try and see things from your employees perspective, and communication becomes much easier.

Regardless, you will need to invest in extensive training for employees to orient them to the new ways of doing business.

Lessons froma Champion

Jean Assaad has championed Six Sigma projects all over the world. His key lessons for would-be belts:

Want to know more about Six Sigma?

AUC Institute for Quality Management: Noha Bakr; Six Sigma Program Officer (02) 2 797-6708

SETTEC Training Center: Eman Hussein; Deputy Manager Public Seminar Sales (02) 2 761-4343  bt