How Decision Delays Affect Lean Six Sigma
One of the principles of Lean Thinking is to eliminate delays which consume up to 95% of the total cycle time. Decision making is one such process.
In the last year, I've noticed several cases of decision-making delay involving Six Sigma.
- One healthcare organization contacted me over a year ago about initiating some improvement projects around insurance claims. They have $150 million a year in rejected claims and $1 million a month in denied claims. They are actually talking about getting started next year.
- A steel company contacted me about doing some training and consulting back in March of 2004. They asked for references...twice: once in March and again in August. In September they had a quality problem that caused them to melt a $100 million dollar furnace.
If you're losing $1 million a month and encountering slowed cash flow of $150 million each year or risking the loss of a $100 million facility, wouldn't it seem like you'd want to jump on those problems? Why does it take a year to decide to take action?
Urgent Beats Important
When you have problems caused by defects and delay, the day-to-day fire fighting and crisis management can eat up all of your time. You forget to spend time on important things like fire and crisis prevention.
Under Jack Welch, GE created a quick and dirty approach to solving small problems. It's called "Work Out." Jack had noticed that his management team was having trouble making timely decisions. In Work Out, teams meet to brainstorm problems and solutions. Then in a town hall meeting, problems and solutions are presented and leaders have to give a thumbs up or thumbs down to each proposal. RIGHT THEN. No deliberation, just decision.
Indecision is Safe
Managers rarely get hammered for not making a decision, but they can often get pummelled for making the wrong decision.
Here's my point:
Indecision can kill your business just as easily as liberate it. A bad decision that you can learn from and reverse direction is better than no decision.
In the movie, In Harm's Way, with John Wayne and Henry Fonda, Fonda's character says: "Indecision is a virus that can destroy an army's will to win." It can kill your company's will as well.
The Economies of Speed
Speed doesn't just matter on the front line or the factory floor, it matters in the boardroom as well.
Start measuring the cycle time for decisions.
Reward people who make fast decisions. Reward people who have the flexibility to revise their decisions as they learn. Don't punish the slow to decide, just don't reward them.
Schedule time in your schedule to work on important things, not just the urgent.
Remember, it's not the big that eat the small, it's the fast that eat the slow. Accelerate your decision making. At work. At home. In a restaurant. Learn to make faster, smarter decisions.
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