• Investment World
• eWorld
• Catalyst
• Mentor
• Life
• Canvas
• Praxis
• Urban Pulse
• Brand Quest

YOU already know about the four Vedas, five S and Six Sigma. So, what's new in Edward Abramowich's Six Sigma for Growth, published by Wiley (www.wiley.com). "This book presents a new approach," says the preface. "The aim is to set out a framework for applying Six Sigma methodologies to make the biggest difference, namely to drive growth directly."

That perhaps explains the subtitle, `Driving profitable top-line results'. Let me therefore go directly to Chapter 1, From cost cutting to driving growth. It begins with a quote of W. Edwards Deming, "Absence of defects does not necessarily build business, does not keep the plant open. Something more is required." Motorola, Kodak and ABB too realised this truth when after many years of Six Sigma the companies had achieved huge savings and yet faced declining revenues and loss of market share.

Faced with the criticism that Six Sigma suffers from rigidity and failure to innovate, the focus has now shifted to developing new offerings that customers value, explains the author. "This change builds upon the traditional bottom-line focus that has made Six Sigma such a success and expands it to profitable top-line growth through direct customer engagements and solving customer problems profitably."

Interestingly, quality is getting redefined. It is not just defect reduction, writes Abramowich. "A product or service possesses quality if it helps somebody and enjoys a sustainable market," is another of Deming-speak. To become customer-centric, you need "an in-depth knowledge of the forces at work in the customer's industry, including changes in the business environment, technological changes, and concepts of customer systems economics and revenue enhancement," elaborates the author. Central growth questions are: "How can we profitably add value to our customers? How are our customers changing? What will they value in future?"

Check if the following is true of where you work: "For many companies, business stops the moment a product reaches the customer. Once the product has been shipped, few companies take the extra step of understanding fully how the products are used by their customers."

Abramowich points out that the customer has to bear many costs associated with the purchased products and services. "Often, the purchase cost itself is a small part of the customer's total costs," he writes, and gives the example of information technology where maintenance of existing systems can add up to almost half of total IT spending.

If you, as the supplier, have `the total economic picture' you can ask yourself if the customer can be offered: "A better financing deal on big-ticket items, a service and training package that includes guaranteed annual maximum downtime, a better distribution and delivery method, a more efficient procurement system, and added value in ways that distinguish the customer's offerings from the competition's."

Abramowich advises companies to apply Six Sigma tools to understand the customer's internal processes and systematically study customer activity for opportunities to add value. "For example, a customer may keep significant quantities of inventory which could be reduced by a new logistics offering. Often, customers may not be aware of such opportunities and are unable to articulate their requirements. The onus is on the Six Sigma practitioners to uncover such opportunities."

To help achieve such an enlightened approach and reap quick wins, the book offers simple tools such as process maps. Ask your sales people to complete process maps of each of your key customers' businesses, and get your growth teams to scrutinise these maps exhorts the author. Also, make growth part of the culture by ensuring that all your employees are tuned to the needs of the customers and the business. "The ideal is to achieve a growth-oriented culture in which everyone naturally looks for improvements in their areas to the point that improvement and day-to-day work are indistinguishable."

Excellent read.

ManageMentor@TheHindu.co.in

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Stranded in the forex Standard

Copyright © 2005, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line