Fighting Fit

18 September 2009 | Source: The Economic Times
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It was 1995 and Wipro systems was just starting to write its prodigious offshoring story. A relatively small company with a focus on software products, it had recently launched its global software and R&D services divisions.

Catapulted onto the global market, chairman Azim Premji felt that Wipro needed to upgrade its understanding and practice of quality in order to compete, and despatched teams to study methods adopted by Japanese, European and American companies. Finally it was the company’s association with General Electric (GE) that nudged it towards Six Sigma, a rigorous methodology that used data and statistical analysis to improve a company’s operational performance by identifying and eliminating defects; In 1998, Wipro’s Mission Quality journey began. “We decided this was the way we were going to do business in Wipro - the Six Sigma way,” says Jagdish Ramaswamy, chief quality officer, Wipro.

Wipro wasn’t the only company to, be swayed by GE; the quality movement had in fact found its biggest evangelist in GE CEO Jack Welch. Welch himself announced that he was “nuts about” Six Sigma, so sold on it that he encouraged company secretaries to get Six Sigma trained. The joke goes that even the simple task of letter drafting became another project that was put through the rigours of Six Sigma to minimise errors. Of course, once GE reported millions in bottom line benefits through its Six Sigma implementation, it didn’t take long for several other large companies, like AlliedSignal and Texaco, to buy the quality dream.

Twenty years after Robert Galvin, Motorola’s CEO at the time. began the development of the quality program that was like “Total Quality Management on steroids”, Six Sigma isn’t exactly “news” in the West any more. But among Indian companies, eager to benchmark themselves against global standards, it is hugely popular as a set of methods to improve quality and simultaneously significantly reduce costs. Interestingly, for a methodology that was synonymous with manufacturing processes, it is the services industries that have made it a part of their quality culture. According to Suresh Lulla, founder & director Qimpro, One of the country’s first dedicated quality consulting firms, quality tools like Six Sigma are actually rather well-suited to services industries because wherever a process is highly dependent on human interaction, the chances of variability are high.

Healthcare, says Mr Lulla, will fuel the next Six Sigma wave. In the banking services industry as well, the quality check tool is being applied in functions across the organisation, with HDFC and ICICI banks being notable adopters. “There was resistance bringing Six Sigma into the software business because it was largely synonymous with manufacturing but we said let's make it work,” says Ramaswamy. And work it did. Besides process improvements and financial savings, the most important gain, according to Ramaswamy, is that it has given Wipro a common language of customer orientation across divisions.

Chandeep Singh drove Six Sigma business transformation in American Express before he moved to BPO Firstsource, which adopted Six Sigma a few years ago so it could benchmark client process performance and improve internal processes. “Labour arbitrage is old hat; it’s now about what we can do to actually value-add to client processes,” says Singh, head of Service Delivery at Firstsource. Today, global Six Sigma awards keep coming Firstsource’s way and 90% of its operational leadership is Green Belt (operates in support of a Six Sigma Black Belt) trained.

The BPO industry, in fact, is a big adopter of Six Sigma. Genpact has the distinction of starting its life as a Five Sigma company. It began as the global services unit of GE Capital (GE later divested Genpact) so Six Sigma was firmly embedded in its culture, something that was driven straight out of Welch’s office. “For Genpact it was the best way to stand out within the GE universe. We loved it,” says NY ‘Tiger’ Tyagarajan, executive COO, Genpact. The fact that every new employee was Six Sigma trained from Day One meant that its 37,000 employees know no other way than to be completely customer-centric.

Anyone will tell you Six Sigma as a business improvement tool should start from the customer. However, Lulla says that too often companies turns to Six Sigma only for quick cost benefits. “Companies that actually adopt Six Sigma as a business transformation tool as opposed to just as an intervention program see the biggest benefits,” he says.

“If Six Sigma is presented and used as a business discipline that involves asking questions and approaching issues in a more effective way, it’s much more powerful” says Pete Pande, coauthor of bestseller The Six Sigma Way. At Wipro, for the first three years, the focus was all about enthusing the workforce, building the infrastructure of Black Belts (trained professionals who implement the Six Sigma approach) and orienting people towards working in teams. It was only in 2002, when Ramaswamy and a critical team of quality professionals from GE and Motorola were inducted, that the company actually introduced statistical rigour. Today, learnings from Six Sigma have been ploughed back into Wipro’s quality systems. “It’s become a way of life without having to run projects around everything,” says Ramaswamy.

Global IT consulting firm KPlT Cummins followed a similar path of easing Six Sigma into its organisational DNA. Having adopted Six Sigma three years ago as a way to get predictability in project management techniques, the first year was devoted to spreading awareness. In the second year it actually applied Six Sigma to projects outside of customer delivery processes - for fixing transportation problems for instance, or improving the procurement process of desktops. “It had nothing to do with end customer delivery but it worked as a live demo,” says president & executive director Girish Wardadkar, an ex-GE professional for whom Six Sigma has been a decade long personal journey.

For a Six Sigma business transformation program to be a success, it needs advocates like Wardadkar who lead from the top with almost proselytic zeal. There is a very distinct role for leadership in Six Sigma; unfortunately leaders like to delegate,” says Lulla. Tyagarajan says that as COO, he made sure he was Master Black Belt certified. “When it’s driven from the top, it becomes a cultural change,” he says. “Wherever possible, organisations should also get their best people to pilot the program. Wipro for instance, released Subroto Bagchi (who later co-founded Mindtree consulting) to become corporate vice president of Mission Quality.

Management support in training is also crucial. At Firstsource although only team leaders and above are eligible for Six Sigma certification, call centre agents are trained to understand variability. They are integrated into quality circles personally chaired by Master Black Belts that address process improvement initiatives. "Tying up rewards and recognition to engagement is crucial” says Wardadkar, although some may say that tying employee promotions directly to Six Sigma certification, as GE famously did, might be too much management involvement. But to most it ensures that Six Sigma is taken seriously across all levels.

Getting everybody on board is neither easy nor cheap. GE is said to have invested more than a billion dollars in its Six Sigma infrastructure. So what about BPOs where attrition levels are high and large investments could run the risk of no returns? “The way we look at it, we’re doing our bit for the whole industry because our black belts keep getting poached,” says Singh. So is the investment worth it? Most certainly, say our companies. Wipro started seeing cost benefits within one year. “Six Sigma isn’t just quality for quality’s sake. Ultimately everything must be converted into dollar savings,” says Wardadkar.

In 2002, telecommunication services giant Bharti Airtel reportedly made recurring savings of over $2 million in the first year that it implemented a Six Sigma project in its long distance services division to bring down the average lead time for order provisioning, which they did by 50%. Today Six Sigma is an internalised business principle for Airtel. Singh says Firstsource has, to date, enabled its clients realise savings in excess of USD $ 10 mn and over $ 2.5 mn in its own Quality Net Income. “The biggest benefit though is when clients recognise our process improvement and discipline,” says Singh.

Most organisations today actually restrict Six Sigma projects to only the most impactful delivery processes. Wipro has consciously reduced its number of black belts and Six Sigma projects, and has just introduced a more integrated approach to quality improvement. Although its basic grounding stays in Six Sigma, at the programmer and call centre agent level, Wipro has introduced Lean (a process management philosophy based on the Toyota Production System) as a productivity and quality improvement initiative because of its focus on speed. “We've also introduced the concept of Kaizen for quick idea bashing,” says Ramaswamy.

This seems to be a growing understanding: that Six Sigma is not always the best or the only methodology to apply to a project. Lulla says many companies are choosing a combination of Lean and Six Sigma methodologies. “Lean removes a lot of low hanging fruit, so that the big strategic issues can be addressed by Six Sigma,” he says. “Why get hung up on a methodology?” says Ramaswamy, “It’s about how to best solve the problem.” Done properly, everybody agrees that Six Sigma generates amazing results but it’s becoming about having the right mix of solutions. Says Singh: “After all there’s no one true path to God.”

It's not everyday that you can take a statistical methodology used for continuous improvement and apply it to solve an unwieldy 60 year-old political conflict. But if Pradeep Deshpande, president Six Sigma & Advanced Control, had his way, he’d use Six Sigma to resolve the Kashmir conflict and bring about regional prosperity. He's even mailed a proposal to US Secretary of State Hillary Clinton outlining a formal methodology, and is confident she will express interest sooner than later.

That isn’t the only seemingly unconventional use of Six Sigma, according to Deshpande who is also Professor Emeritus of Chemical Engineering at University of Louisville. His ‘theory of national competitiveness’ using Six Sigma, he says, predicted India’s rise as far back as 1990. “I made a few presentations to that effect in Pune in 1993, and people said, “You must be joking. India has all kinds of problems’. But nobody is laughing now,” he says. His theory of rise and decline proposes that rise and decline are natural phenomena, but one can apply the Six Sigma approach to cultures by using lessons learned from the rise and fall of past cultures. “I project that the candidates for the next rise after the decline of China and India are Greece, Egypt, and Iran,” he adds.

Six Sigma, as pioneered By Motorola, states that all activities must be operated in the best possible manner, generating the least possible defects reflective of customer dissatisfaction. In the late nineties though, Deshpande articulated three natural laws that offered clarity to the explanation of Six Sigma without using any equations, and with very little jargon. Also, being a chemical engineer, he’s constantly working on extending its applicability beyond static business processes to dynamic and non-linear systems. When his ideas are combined with those developed at Motorola, it becomes possible to apply Six Sigma to any repetitive activity. “Six Sigma is really for life itself,” he says.

Deshpande founded SAC in the early nineties to offer Six Sigma and advanced process control training and consulting services. He also believes he might be the first educator to introduce Six Sigma modules in engineering and MBA programs. An author of six books and currently working on his new text Six Sigma for Karma Capitalism, he is never short of ideas. He recently guided a group of doctors, professors, and others in a study on how Six Sigma could be applied to the yogic system of Pranayam.

The most interesting case study Deshpande offers though is his study of the Gamarra community in the La Victoria township of Lima, Peru, a semi -literate textile and tailoring conglomerate. Gamarra has 25,000 businesses that employ 100,000 workers, generating $1.2 billion in revenue. These businesses import fabric from several countries and produce textile products for sale nationally and abroad. Just like Mumbai’s dabbawalas, many of the folks at Gamarra are semi-literate and do not know what Six Sigma is, but they are extremely passionate and committed to customer satisfaction. “Dabbawalas have been operating their processes for over one hundred years and it has taken them decades, and a considerable amount of trial and error, to deliver such high performance levels. Similarly, it has taken Gamarra several decades to come to where they are today in terms of performance,” says Deshpande.

Gamarra entrepreneurs are renowned and widely respected among both business customers and end-use consumers. Their textile products are known for high quality and low cost. They are also widely respected for on time delivery. The entrepreneurs compete fiercely among themselves but they also cooperate when they need to. Each business is set up to fulfil a certain minimum number of orders but through agreements with other businesses in Gamarra, they have the capacity to solicit and execute orders virtually of any size within the overall capacity constraints of the total workforce. This arrangement assures B-to-B customers of not only high quality but also a quick turnaround. “When a business is found to be delivering very high levels of customer satisfaction, they are necessarily following Six Sigma,” explains Deshpande.

For Deshpande, Six Sigma has its roots in Motorolas's operational initiatives but it also converges with the metaphysical and the spiritual. His journey has taken him through the work of Stephen Hawkins and the wisdom of Swami Ramdev, the founder of pranayam (his book A Small Step For Man is dedicated to them) to create a process for organisational and personal development. “Isn't that funny because one is devoted to the search for zero and the other the search for infinity,” he laughs.

Deshpande, like his hero Jack Welch, is a Six Sigma evangelist, but admits that quality movements come and go. They were all borne out of the statistical process control idea as imparted by Edward Deming, he says, so whether it's the Toyota Way or Kaizen, it's all pretty much the same - a drive for business excellence. “As the Rig Veda says: reality is one, the wise call it many names,” he explains.

He talks of companies that have made Six Sigma an unwavering part of their business culture. “I have two Lexus, and I didn’t take either for a test drive because there is no question of defects,” he says. The Toyota luxury car famously stands head and shoulders above other car manufacturers in customer satisfaction and retention. Plus, it accounts for 2% of Toyota’s sales but 33% of its profits. “In the old days people were content with average performance. In the new era companies must focus on low variability,” he says. And then he adds quickly, “Why limit it to companies, why not yoga, ayurveda, even homeopathy? Anything is possible.”

CREDITS: Suresh Lulla, Founder & Mentor, Qimpro Consultants Pvt. Ltd.
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