A research project on Future of Six Sigma and how it aligns with the innovative strategies at a company

1. Contemporary Organizations and the Future Six Sigma / Innovation Facet SalilDeshmukh John Gastreich Justin Frey Prem Anand Mathiyalagan

2. 2 Agenda Problem statement Recommendations Innovative companies Links between Six Sigma and innovation Integrated Enterprise Excellence Weighted criteria matrix

3. Problem Statement Future of Six Sigma Growth versus Performance 3 How to find a balance between efforts to grow the business and the diligence needed to maintain high performance operations? Which Six Sigma approach or evolution is most appropriate for meeting future business challenges over the next decade?

4. Scope Within Scope Out of Scope Research next-generation Six Sigma and continuous improvement practices. Compare and contrast how industry front-runners apply six sigma in terms of innovation and growth. Identify qualitative metrics for performance assessment and for rewarding/incentivizing. Perform analysis of as-is RMS Six Sigma methodologies. Perform primary research of direct competitors to RMS. Provide recommendations for a roadmap to move from as-is RMS methodologies to to-be RMS methodologies. 4

6. Dr. Kenneth Smith – Innovation

7. Dr. Sudha Ram – Business Intelligence

8. Larry Dyer – Six Sigma

10. Scholarly articles

11. Books

12. Others (company websites, industry data)5

13. Recommendations Do NOT use Six Sigma for innovation activities directly Identify processes/methodologies used to support innovation and other activities; use Six Sigma to improve such processes Innovation Maturity Model Next generation organizational behaviors Instead of applying Six Sigma in silos, use it for the processes of the entire organization 6

14. Innovative companies Justin 7

15. Innovative Company Rankings 8

16. Most Innovative Companies 9

17. Six Sigma in Innovation Of the most innovative companies, only GE couples Six Sigma with Innovation Reasons Stifles creativity Lowers employee morale Only used for process improvement 10

18. Qualities of Innovative Companies Attitudes Willingness to cannibalize assets Future focus Tolerance for risk Practices Empowerment of product champions Incentives for enterprise Internal markets 11

20. Methodologies and tools Prem Anand 13

21. Is there an indirect connection between Six Sigma & Innovation? 14

22. Yes 15

23. Indirect Benefits Organization are undergoing significant changes Emphasis on innovation Proposed methodology Use standard framework to manage innovation Identify processes Use Six Sigma to improve processes Hence Six Sigma can be used indirectly 16

24. Frameworks and Models Innovation Network Framework Framework used to manage innovation within a large organization Innovation Maturity Model Model to assess the maturity level of the innovation process within an organization 17

25. Innovation NetworkFramework Network with internal and external groups to generate ideas Identify objectives and define metrics Objectives and metrics Business objectives Structural objectives Activity metrics Behavioral metrics Innovation Network Metrics Customer innovation metrics Case Study – P&G 18

26. Case Study 19

27. General Innovation Management Choose appropriate innovation strategy First-mover strategy Fast-follower strategy Conservative slow-follower strategy Alternative innovation strategy Focus innovation on a business imperative Define an innovation process model Organize to accomplish innovation Innovation Maturity Model 20

28. Innovation Maturity Model 21

29. Behaviors Highly Collaborative Environment 22

30. Next Generation Behaviors 3 Factors leading to the revolution Web 2.0 Net generation Need for uniquely qualified minds Characteristics of the Net-Gen High technology adoption Creativity Social connectivity Diversity Ideagoras Marketplace for ideas, innovation and uniquely-qualified minds Wiki Workforce (Highly collaborative) Collaborative Economy Business – Web More the collaboration better the results 23

31. Boeing 787 …Boeing executives concluded that mass collaboration was the only way to create the kind of cheaper, more fuel-efficient jetliner that airlines want… 24

32. Sentiment Analysis Also known as Opinion Mining Determines opinion polarity on a topic Quantifies the qualitative (sentiment) First used for movie reviews Used heavily in marketing analysis Can be used to quantify opinion surveys Commercially available sentiment analysis software 25

34. Identify processes/methodologies used to support innovation and other activities; Use six sigma to improve such processes.Innovation Maturity Model Next generation organizational behaviors Instead of applying Six Sigma in silos, use it for the processes of the entire organization 26

35. Integrated Enterprise Excellence Salil 27

36. Integrated Enterprise Excellence Developed by Forrest W. Breyfogle III, the President and CEO of Smarter Solutions, Inc Uses the familiar Six Sigma DMAIC road map not only at the project level, but at the enterprise level as well. 28 IEE E - DMAIC P - DMAIC Enterprise Level Roadmap Project Level Roadmap Integrated Enterprise Excellence * DMAIC = define, measure, analyze, improve, control

38. Steering committee aims at process improvement and providing certifications

39. Low hanging fruit gets selected as a goal

40. Most process improvement techniques often occur in silos

41. Benefits are not propagated to executive level

42. In a financial crisis, Lean Six Sigma programs are often downsized29

43. Integrated Enterprise Excellence (IEE) An enterprise system that provides structure for integrating innovation with analytics 30 Integrated Enterprise Excellence Six Sigma Balanced Score Cards Lean

44. How it Works 31

45. How it Works Step 1: Describe a vision and a mission Step 2: Describe the value chain Step 3: Analyze the enterprise Step 4: Establish goals for satellite-level metrics 32 Define Measure Analyze Analyze

46. How it Works Step 5: Create strategies Step 6: Identify high-potential improvement areas Step 7: Identify and execute projects Step 8: Assess the project’s final impact on enterprise goals Step 9 : Maintain the gain 33 Analyze Analyze Improve Improve Control

47. How it Works 34

50. Weighted criteria analysis John 36

51. Options for Recommendations Passed Failed Keep Six Sigma - Continue using Six Sigma, improve the image of the Six Sigma unit, 1% of all RMS employees Increase Collaboration, Innovation Network Model, Crowd sourcing - Increase collaboration inside and outside the company Do not Integrate Six Sigma and Innovation – Keep separate Implement Integrated Enterprise Excellence (IEE) - Or other forward thinking Six Sigma derived methodology Integrate 'Bike Shop' – i.e. Skunk Works, into the mainstream activities of RMS Hire Consultants - Specializing in Six Sigma and technology, e.g. Thomas Pyzdek, Bain Performance Improvement End of Management - Pyzdek, eliminated because RMS is not facing a crisis Outsource Six Sigma - Only core competencies should be kept in house Guidance and Collaboration with other Raytheon Six Sigma Groups - RMS is not the only division of Raytheon with Six Sigma teams Further Six Sigma Education - Improper education is said to be one of the leading causes of 6S failures Race the Red Queen - Implement adaptive approach, i.e. keep your finger on the pulse of 6S to adapt quickly and take advantage of change 37

52. Criteria Selection Process Raytheon’s Vision, Strategy, Goals, and Values Admiration Respectability Knowledge (leveraging) Broadening focus Customer focus International growth Revenue growth Improved cash flow Predictability Productivity World class employees Performance Conversations with Daniel Kuz and Dr. Jennie Campos Feasibility Cost Innovativeness Long-Term Revenue Growth Short-Term Revenue Growth Brand Image of Six Sigma / Raytheon Employee Satisfaction Values & Behaviors Next Gen Six Sigma Organization Speculative 38

53. Criteria Feasibility Can this option be implemented? Cost Cost to implement; cost/benefit ratio Innovativeness Contribution to Raytheon’s innovativeness Long-Term Revenue Growth Basic need to keep investors happy Short-Term Revenue Growth Basic need to keep investors happy Brand Image of Six Sigma / Raytheon Per company Vision & 6S unit’s needs Employee Satisfaction Per company goals, mission, values & 6S unit image 39

54. Weighted Criteria Matrix 40

55. Recommendations Increase collaboration, innovation network model, crowd sourcing Do NOT integrate Six Sigma with innovation Implement Integrated Enterprise Excellence 41

56. Next Steps Whatever path is decided: Get support from the top Arrange sufficient funding Incentivize employees to encourage change 42

57. Questions 43

58. Appendix 44

59. Collaborators University of Arizona MIS Master’s Project Team Justin Frey Prem Mathiyalagan Salil Deshmukh John Gastreich MIS Faculty Dr. David Pingry RMS Reps Daniel Kuz Dr. Jennie Campos RMS Special Guest Tom Birdsall 45

60. Example Metrics 46

61. Other Sources Myths Myth No. 1: Innovation just happens. Myth No. 2: Innovation only happens in R&D. Myth No. 3: The best innovation comes from inside. Myth No. 4: The more innovative ideas we generate, the better. Myth No. 5: We have lots of smart people, so innovating will be no problem. Innovation Culture Establishing and benchmarking organizational culture Sources Five Myths of Innovation.pdf the_innovation_culture_defin_156182.pdf 47