March 3, 2015

The Six Sigma Way

How to Maximize the Impact of Your Change
and Improvement Efforts
Second Edition
Peter S. Pande, Robert P. Neuman, and
Roland R. Cavanagh
©2014 by McGraw-Hill Education
Adapted by permission of McGraw-Hill Education
ISBN: 978-0-07-149732-9

Key Concepts
• Six Sigma is a technical method for fine-tuning products and processes, used by many engineers and statisticians.
• This process-improvement strategy is customer focused. Leaders implementing Six Sigma practices keep cus-
tomers’ needs foremost in an organization’s plans.
• Some of the tools and concepts employed by Six Sigma practitioners include Enterprise Resource Planning, lean
manufacturing, strategic business partnerships, globalization, and just-in-time inventorying.
• Six Sigma’s management philosophy is driven by facts and data. It clarifies what measures are keys to a busi-
ness’ success and works at applying data and analysis to optimize results.
• One of the core goals of Six Sigma is to reduce variation or deviation in a product or service. As a result, the prod-
uct or service becomes more consistent and reliable.
• Process improvement is about eliminating the root causes of business performance problems. The goal is to
resolve a problem without disrupting the basic structure of the work process.

Introduction
The second edition of The Six Sigma Way, by Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh, is a
detailed, step-by-step guide on how to design or redesign an organization’s processes from the ground up. Six
Sigma takes a reasoned approach of statistics and measurement as a way of determining the effectiveness of
a business’ core process. Businesses should reduce variation (the sigma in Six Sigma) as much as possible and
focus on understanding the needs and expectations of customers above all else. Careful analysis of facts and

Business Book Summaries® • March 3, 2015 • Copyright © 2015 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 1
The Six Sigma Way Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh

data is important, as well as the need to measure data. Companies that make a long-term commitment to Six
Sigma methods will see sustained improvement in their processes and overall organizations.

Part One: An Executive Overview of Six Sigma

A Powerful Strategy for Sustained Success

Business leaders and managers need to be sure they are focusing on sustained success. In today’s business cli-
mate, many companies come and go, enjoying only brief periods of success before fading away. Six Sigma is a
flexible system aimed at helping twenty-first-century businesses achieve this sustainable success. Some of the
companies that have successfully implemented its methods include General Electric, Motorola, and Honeywell.
Six Sigma benefits organizations by helping them set performance goals for everyone, enhance value for cus-
tomers, accelerate improvement, promote learning, and execute strategic change.

The system’s crucial elements are not unique to Six Sigma, but they are brought together in a unique way. They
are organized into six themes.

1. Focus on the customer: Many improvement strategies include a plan to meet and exceed the expectations of
their customers, but Six Sigma places a unique emphasis on taking steps to better understand customers.
2. Data-and-fact-driven management: Six Sigma determines the exact measures that are most important for
gauging business performance. It then applies data and analysis in order to achieve optimum results.
3. Process focus, management, and improvement: Process is recognized as the main driver of success. A mastery
of process is finally being recognized by business leaders as a powerful way to establish competitive advan-
tage.
4. Proactive management: This is another way of describing the development of good habits. Proactivity en-
ables creativity and establishes control.
5. Change management: A business must break down old-fashioned barriers
in order to open up communication and collaboration across the entire Most companies and
organization. managers have a
6. Drive for perfection; tolerance for failure: This may seem like a contradictory pretty weak under-
mindset. However, implementing new ideas and processes carries with
standing of the rela-
it a necessary level of risk, and many organizations do not achieve their
potential because they avoid risking failure.
tionship between
their own Xs and Ys.
Business leaders need to look over these six themes and honestly determine
where their companies stand.
They keep their cor-
porate bikes on the
Key Concepts of the Six Sigma System path just through luck
Six Sigma comprises several major components for improving business or by making a lot of
performance. One such component is creating a closed-loop system. In this major corrections as
system, a business uses internal and external data to determine how to stay they go.
on course, which promotes stability. Algebraic-type equations can be used to
locate and define variables, and determine which have the greatest influence. For example, in Y=f(X), Y could
represent something like a strategic goal or customer satisfaction, and X could mean actions, quality, efficiency,
or influences. The Greek letter sigma is used to represent standard deviation or variation in a group. Variation is
the enemy for businesses, so it needs to be tracked at all times. The objective is to reduce variation, or sigma, as
much as possible.

Business Book Summaries® • March 3, 2015 • Copyright © 2015 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 2
The Six Sigma Way Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh

Once effective measures are in place, the next step is to apply them to three key management strategies, which
are all focused on process:

1. The goal of process improvement is to fix a problem without changing the basic structure of the actual work
process.
2. Process design/redesign, on the other hand, seeks to replace part or all of a process.
3. Process management involves making a long-term change of focus from functions to processes. This is an
evolutionary approach that is slow to develop.
Applying Six Sigma to Service and Manufacturing

The authors broadly define service as a business that does not design or produce goods, and manufacturing as a
business that does. Many manufacturing businesses pay significant attention to quality, so they do not believe
they could benefit further by adopting Six Sigma. However, these companies
Service process must acknowledge that there is no longer such a thing as a pure manufacturing
improvement has company. Rather, manufacturers must also stay on top of technology, under-
caught up to manu- stand their customers’ changing needs, manage supplier networks, and so on.
facturing ... In fact, Studies have shown that the U.S. economy has been veering away from man-
ufacturing and toward service since about 1990. Service metrics are far more
as much—if not
difficult to manage and quantify, so many companies tend to minimize them.
more—impact in The first step in improving a service-based business is to investigate its pro-
organizational ben- cesses. This tends to shine a light on many problems that otherwise might not
efit comes from be noticed. Then, once time has been taken to better define a problem, under-
nonproduction-type stand it, and select an improvement project, any remaining ambiguity should
processes as from be translated into clear measures and performance factors. It is important to
remember that Six Sigma guidelines are flexible and are meant to be adapted
manufacturing. to the individual needs of businesses, not the other way around.

The Six Sigma Roadmap

The ideal roadmap for establishing a Six Sigma system consists of five steps. Followed in order, they create a
foundation that sustains further improvement.

1. Identify core processes and key customers. As businesses grow and develop in complexity, they can lose track
of the big picture. This can be avoided by keeping critical business activities in mind while navigating the
rest of the roadmap.
2. Define customer requirements. Too many companies have a poor understanding of their own customers.
Companies must determine what their customers really want by putting systems in place that gather actual
customer input.
3. Measure current performance. How well is the company providing customers with what they want? Compa-
nies need to measure how effectively they are delivering on the information gathered in step two.
4. Prioritize, analyze, and implement improvements. Any improvements will be based on the statistics and mea-
surements from steps two and three. The key is to carefully prioritize improvements.
5. Expand and integrate the Six Sigma system. A long-term commitment to the Six Sigma methods and theories
is required for genuine performance improvement.

Business Book Summaries® • March 3, 2015 • Copyright © 2015 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 3
The Six Sigma Way Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh

Part Two: Gearing Up and Adapting Six Sigma to Your Organization

Is Six Sigma Right for the Organization Now?

Adopting Six Sigma means being willing to undergo fundamental systematic change across the entire company.
The first step, therefore, is to be ready for change. Additionally, those considering Six Sigma should review their
organizations in terms of their short- and long-term goals. They should be using hard data to assess where they
currently stand and how well they are doing, and from there examining where opportunities for improvement
lie. Companies must also consider any and all existing improvement plans in place. Where are they meeting
expectations? Where might they be falling short? Decision makers should keep in mind that sometimes Six
Sigma is not right for an organization, or there may be times when a limited implementation is all that is needed.
The costs of implementing Six Sigma, which include direct and indirect payroll, training and consulting, and
installation of new process designs, may require some organizations to wait.

How and Where Should Efforts Begin?

Once the decision has been made to implement Six Sigma, a number of other questions need to be examined
early on. The way a company should approach Six Sigma depends on three
main factors:
It is tempting, of
course, to say “I want
1. A clear objective is a crucial first step, but too many executives fail to spec- it all!” But identifying
ify exactly what they wish to accomplish. It can be anything from simple
which is your primary
problem solving to strategic improvement to transformation of an entire
business.
driver for Six Sigma
... will help you arrive
2. Assessing scope means determining which parts of the organization
should be brought in on Six Sigma. This depends on resources for, accep- at the best start-up
tance of, and attention to the coming changes, and every company will strategy.
differ in this regard.
3. Time frame is dependent on how long leaders of a business are willing to wait to see results.
The answers to questions that arise from examining these three elements will determine where and how a com-
pany can begin to implement Six Sigma.

Preparing Leaders to Launch and Guide the Effort

The success of Six Sigma requires the support of company leadership. Top managers must be prepared to take
on the following:

• Describe for themselves and for others why the business is adopting Six Sigma. This rationale must be specific
to the organization.
• Play an active role in planning and implementing Six Sigma goals. This will in turn affect the overall theme of
the project, as well as its promotion.
• Create a marketing strategy to minimize employee worry or cynicism. The plan should be challenging but realistic.
• Become advocates for the system. To do so, leaders must learn and understand it fully. However, advocates do
not necessarily need to be top management; a ground-up approach can also be effective.
• Set clear objectives. Specific objectives, tailored to the specific organization, should be understood by all and
be attainable.
• Hold themselves and others accountable. Accountability can be achieved by aligning the Six Sigma effort or
results to compensation.

Business Book Summaries® • March 3, 2015 • Copyright © 2015 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 4
The Six Sigma Way Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh

• Get solid measurements of results. A balance of hard and soft results may work best, rather than an overreli-
ance on currency saved or anecdotal information.
Leaders are the ones who will set the tone and direction for any change within a company. Without their sup-
port, a Six Sigma initiative cannot properly succeed.

Preparing Black Belts and Other Key Roles

An important task of Six Sigma lies is defining key roles for the organization. The authors suggest many roles a
company should consider, if they do not already exist.

• The leadership council serves as a forum where planning and discussion among managers takes place. They
establish the infrastructure of the Six Sigma program and help quantify its impact.
• The sponsor, or champion, is a senior manager who oversees a particular improvement project. This indi-
vidual sets broad goals and keeps them aligned with larger business priorities. He or she is responsible for
securing resources for projects and providing coaching where needed.
• The implementation leader manages and supports the day-to-day progress of the project, and prepares
training and documentation.
• The coach is a technical expert who provides advice and help to improvement teams.
• A team leader or project leader takes primary responsibility for the work of the Six Sigma project, as well as
its results.
• Team members provide additional support and help to spread the word about the project.
• The process owner has a cross-functional responsibility of working with
Different skills and tal- the improvement teams and owning the newly designed processes. This
ents are often need- person may also be the sponsor.
ed to make process Six Sigma has adopted the martial arts terminology of Master Black Belts,
improvement work Black Belts, Green Belts, and Yellow Belts to signify a level of training and
mastery. Black Belts should be selected carefully, as they have a significant
successfully.
impact on the success or failure of a project.

Training the Organization for Six Sigma

A Six Sigma organization is always picking up on new information from its customers and elsewhere. These
organizations use this knowledge to develop new and improved products and services. There are several essen-
tials to effectively training an organization in the Six Sigma System, such as emphasizing “hands-on” learning;
providing relevant, “real-world” examples; building knowledge; and making training an ongoing process that
caters to different learning styles. The Six Sigma curriculum can be tailored to the styles and skills of each indi-
vidual, but there are some skills that can be developed with a broader plan. Some examples of training elements
are “Leading and Sponsoring Six Sigma Efforts,” which teaches project selection and role requirements, and
“Advanced Six Sigma Tools,” which teaches quality function deployment and advanced statistical analysis.

Selecting the Right Six Sigma Projects

Project selection is considered to be the most commonly mishandled aspect of a Six Sigma program. Four essen-
tial steps for ensuring effective project selection are:

1. Provide guidance to leaders. A working meeting in which a team of leaders can discuss possible issues is
important.

Business Book Summaries® • March 3, 2015 • Copyright © 2015 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 5
The Six Sigma Way Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh

2. Launch a reasonable number of projects. Many companies take on too many small projects at once rather
than focusing on the most important ones first.
3. Scope projects properly. A company may assign a monumental task to a team, failing to account for its mas-
sive scope and thereby setting the team up for frustration or failure.
4. Focus on efficiency and customer benefits. Financial gains are just one part of the overall result; just as impor-
tant are improved market strength and a better competitive position.
When selecting projects, certain criteria to keep in mind include the impact on customers or business strat-
egy, the available resources or support, and the likelihood of success. In the end, a selected project should be
described in terms of the issue, its value, and the expectations of the team assigned to it.

Part Three: Implementing Six Sigma: The Roadmap and Tools

Step 1: Identifying Core Processes and Key Customers

There are three main activities associated with the first step in the Six Sigma Roadmap. The first is to identify the
business’ core processes. A core process is defined here as “a chain of tasks—usually involving various depart-
ments or functions—that deliver value.” Examples include customer acquisition, order fulfillment, and new
product development. The second step is to define the major outputs of these processes, as well as the key cus-
tomers. Managers should be careful to only define the most crucial outputs. One of the first things
The final step is to create core process maps that identify the main steps in
each core process. When defining the activities that make up these processes,
to recognize in trying to
the authors use the SIPOC process model (supplier, input, process, output, and list the primary or core
customer). This helps to display cross-functional activities in a single diagram processes in your orga-
and to maintain focus on the big picture. nization is that there is
Step 2: Defining Customer Requirements no “right” or “wrong.”
In some instances how
Understanding and anticipating the wants and expectations of customers you define core pro-
should be considered the most important core competency of any modern
business. The second step on the roadmap focuses on finding a system that
cesses may be guided
tracks and updates customer requirements, measures performance standards by the need to send a
as defined by customers, maintains measurable service standards, and ana- message to the orga-
lyzes all of the above based on their importance to customers. Listening to nization.
and understanding the “voice of the customer” must be an ongoing priority.
Managers should remember to pay equal attention to service requirements (how the customer is treated) versus
output requirements (what is delivered to the customer in the end), and to keep an open mind toward new infor-
mation about what the customer wants. These requirements must then be analyzed and prioritized in order to
be properly linked to the company’s strategy.

Step 3: Measuring Current Performance

Gathering data can be extremely simple or difficult, depending on what is being measured. Either way, measur-
ing data is necessary to both plan and track Six Sigma. A resulting benefit is the ability to monitor change and
respond quickly and effectively. Some of the major deliverables of this process include collecting and measur-
ing data from the company’s current performance against the customer’s requirements and identifying relative
strengths and weaknesses in company processes. This information gives business leaders what they need to
determine priorities for improvement. In addition, this data lays the foundation for ongoing measurement sys-
tems and results in a more responsive organization.

Business Book Summaries® • March 3, 2015 • Copyright © 2015 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 6
The Six Sigma Way Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh
Step 4A: Six Sigma Process Improvement

When working through the Six Sigma process improvement steps, an organization’s goal should be to match or
exceed its initial gains. Step 4A of the process focuses on the phases of DMAIC:

• Define.
• Measure
• Analyze.
• Improve.
• Control.
In this instance, define means to clarify the problem, the goal, the customer being served, and the process being
investigated. Measure refers to determining the focus and extent of the problem, and narrowing it down to
its major factors and root causes. The analyze phase tends to vary the most, depending on the problems pre-
sented. It is best defined as a cycle. Hypotheses are generated and analyzed
Which tools to use, to determine the root cause. If they are incorrect, a new hypothesis is created,
when, and why ... is and so on. Improve is the payoff. This phase requires creativity and careful con-
one of the biggest sideration of new ideas, and should always keep the original objective in mind.
challenges for orga- Control marks the beginning of the sustained improvement of the Six Sigma
system and is addressed in a later chapter.
nizations and teams
embarking on a Six Whenever a DMAIC tool is used, the team should have a clear understanding of
Sigma effort. why they are using it and have made a careful consideration of all possibilities.
In these situations, simple is best. The team should always be able to recognize
when a given tool is not working, and stop appropriately. Leaders should also
recognize that process improvement is not linear; it is often cyclical. Revelations made along the way can inform
and inspire revision of any step in the process, including its very foundation.

Step 4B: Six Sigma Process Design/Redesign

Asking a few key questions as they apply to a particular organization can help uncover the DMAIC process. What
is the scope of the activities involved? What are the critical outputs and their requirements? How will the orga-
nization test and refine this new process? This type of design/redesign is needed because it places emphasis on
the needs of the customer. There is no formula for how to launch a redesign effort, so companies must go about
it based on their circumstances, such as existing needs or opportunities. The redesign conversion is a risk for
any company, but it can be a calculated risk with proper planning. A process charter is used to set direction and
define parameters. It also brings a sense of purpose to the process improvement team and the organization as
a whole.

Step 5: Expanding and Integrating the Six Sigma System

Once a process improvement strategy has achieved its goal, it can become difficult to sustain the results. Sus-
tained improvement can be achieved, however, by taking a few key actions:

• Implement ongoing measures. It helps to build support for the solution among others. Leaders should be
inviting documentation on all changes made, and keeping that documentation brief, clear, and available.
They should select meaningful, ongoing measures and display them in charts. They should also have re-
sponse plans in place, in case something goes wrong.

Business Book Summaries® • March 3, 2015 • Copyright © 2015 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 7
The Six Sigma Way Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh

• Define responsibility for process ownership. Leaders should be positioning their organizations to adopt a pro-
cess management approach. They will get results efficiently so they can more effectively serve their customers
and get buy-in from their employees. Process owners should be identified who can maintain and supervise
any new system put into place.
• Execute “closed-loop” management. This means revisiting the very first steps of the process improvement
roadmap: identifying core processes and key customers, defining customer requirements, and measuring
performance.
Advanced Six Sigma Tools

There are more sophisticated Six Sigma tools and techniques that can bring about even greater change and
development. These “power tools” have more specific applications and should be used with great care. Such
tools include tests of statistical significance (in which patterns are found hidden in statistics that can confirm
or validate change) and mistake-proofing (in which detection and correction of mistakes is emphasized). These
types of solutions should be carried out by specially trained Black Belts.

The elements of the Six Sigma system can be applied to any business or organization to achieve sustained
improvement and success. The system can be adapted to fit the unique goals of individual organizations.

Features of the Book

Estimated Reading Time: 5–6 hours, 448 pages

The Six Sigma Way is a thorough self-help guide meant for organizational leaders in control of the direction
of their organizations. Divided into three parts, it provides an overview of the system, specific suggestions, and
guidelines for practical implementation. Numerous charts, tables, lists, and case studies facilitate the presenta-
tion of this complex approach. The book should be read cover to cover, but its format makes it easy to go back
and reread certain sections. There are extensive resources at the back, including an appendix, glossary, refer-
ences, and notes.

Contents
Introduction to the Second Edition
A Guide to The Six Sigma Way
Part One: An Executive Overview of Six Sigma

Chapter 1: A Powerful Strategy for Sustained Success

Chapter 2: Key Concepts of the Six Sigma System

Chapter 3: Applying Six Sigma to Service and Manufacturing

Chapter 4: The Six Sigma Roadmap

Part Two: Gearing up and Adapting Six Sigma to Your Organization

Chapter 5: Is Six Sigma Right for Us Now?

Chapter 6: How and Where Should We Start Our Efforts?

Chapter 7: Leadership Actions to Launch and Guide the Effort

Business Book Summaries® • March 3, 2015 • Copyright © 2015 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 8
The Six Sigma Way Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh

Chapter 8: Preparing Black Belts and Other Key Roles

Chapter 9: Training the Organization for Six Sigma

Chapter 10: The Key to Successful Improvement: Selecting the Right Six Sigma Projects

Part Three: Implementing Six Sigma: The Roadmap and Tools

Chapter 11: Identifying Core Processes and Key Customers (Roadmap Step 1)

Chapter 12: Defining Customer Requirements (Roadmap Step 2)

Chapter 13: Measuring Current Performance (Roadmap Step 3)

Chapter 14: Six Sigma Process Improvement (Roadmap Step 4A)

Chapter 15: Six Sigma Process Design/Redesign (Roadmap Step 4B)

Chapter 16: Expanding and Integrating the Six Sigma System (Roadmap Step 5)

Chapter 17: Advanced Six Sigma Tools: An Overview

Conclusion: Twelve Keys to Success

Appendix

Notes

Glossary

References

Acknowledgments

Index

Further Information
Information about the authors and subject:
www.sixsigmaway.com
Information about this book and other business titles:
www.mheducation.com

Click Here to Purchase the Book

Related summaries in the BBS Library:

Beyond Performance Management
Why, When, and How to Use 40 Tools and Best Practices
for Superior Business Performance
By Jeremy Hope and Steve Player

Business Book Summaries® • March 3, 2015 • Copyright © 2015 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 9
The Six Sigma Way Peter S. Pande, Robert P. Neuman, and Roland R. Cavanagh

Look at More
A Proven Approach to Innovation, Growth, and Change
By Andy Stefanovich

About the Authors

Pete S. Pande is founder and president of Pivotal Resources, Inc., an international consulting firm providing Six
Sigma implementation, training, and management development services to industries from financial services
to high technology. Pande has worked in the organization improvement field for over 15 years, supporting
change initiatives in a variety of companies, including GE, Citicorp, Chevron, and Read-Rite. He and his wife and
two children live in the San Francisco Bay Area.

Robert P. Neuman, PhD, is a senior consultant and noted speaker in the area of business improvement meth-
ods and Six Sigma. His background in Six Sigma and quality systems includes two years with a major California
health care system and consulting work with such Pivotal Resources clients as NBC, GE Capital, Cendant, and
Auspex Systems. He and his wife live in Davis, California.

Roland R. Cavanagh, PE, is a professional engineer who has an extensive background in improving manu-
facturing and service business processes. His areas of expertise include process measurement and applied
statistics, business reorganization, and Six Sigma methods. He has worked with such organizations as America
West Airlines, Commonwealth Edison, GE, and Tencor Instruments. Cavanagh and his family make their home
outside of Chico, California.

Copyright of Business Book Summaries, Business Book Review, BusinessSummaries and BizSum is property of EBSCO
Publishing Inc. and its content may not be copied or emailed to multiple sites or posted to a listserv without the copy-
right holder’s express written permission. However, users may print, download or email summaries for individual use.
Business Book Summaries® is a service of EBSCO Publishing, Inc. For more information about BBS, to subscribe to BBS, or
to provide us feedback, visit our Web site.
www.ebscohost.com
EBSCO Publishing Inc.
10 Estes Street
Ipswich, MA 01938 USA

Business Book Summaries® • March 3, 2015 • Copyright © 2015 EBSCO Publishing Inc. • www.ebscohost.com • All Rights Reserved 10
Copyright of Six Sigma Way is the property of Great Neck Publishing and its content may not
be copied or emailed to multiple sites or posted to a listserv without the copyright holder's
express written permission. However, users may print, download, or email articles for
individual use.