VIEW FROM THE TOP
Six Sigma Leaders
EX-CEO OF GE BELIEVES SIX SIGMA GOES BEYOND OUALITY.
I onner-General Electric CEO lack
F Welch either inspires or frustrates.
His "shoot from the hip" manage-
ment causes anger or admiration and
esteem. There is no middle grotind. In the
qtiaiity world he was, and still is, a cham-
pion for Six Sigma. He credits Six Sigma
with not only making better product, but
Jack Welch with making better leaders inside GE.
At the recent Six Sigma Summit in Miami, FL, Jack Welch
spoke to a standing room-only crowd. Dan Quinn, president
ot Rath 8c Strong (Lexington, MA), sponsor of Welch's appear-
ance, moderated a one-on-one discussion with Welch. QunliTy
magazine was in attendance and recounts some of Welch's
views on Six Sigma, leadership and his management of GE.
The decision to go with Six Sigma.
lack Welch: We went with Six Sigma, in part, because of
employee surveys. We had been accused of a "shift-and-fix"
mode where we would move problems around instead of
addressing them. The topic of Six Sigma as a solution to this
mentality showed up at one of our board meetings and we
decided to go with it. In the beginning, you have to measure
cost reduction to sell management on Six Sigma, but you need
to get beyond that way of measuring success. We wasted almost
one year measuring cost reductions only. Then we threw tbe
charts and graphs out and were able to really see the benefits of
Six Sigma. We found otit it was all about being better for the
castomer. The metrics are good for the inside, but Six Sigma
success shows in bow well you can please your customer.
Six Sigma as a leadership tool.
JW: Six Sigma is one of tbose things tbat can separate com-
panies. One of the best things we did at GE was not leave Six
Sigma to tbe quality professionals. We gave it as a tool to the
best people in our company, regardless of tbeir position. By
giving Six Sigma training to your best people, it sends a mes-
sage to others in the company. They see who is getting pro-
moted, who is getting stock options. It belps create that criti-
cal mass of people skilled in Six Sigma that is necessary for it
to be in a company's blood. If you aren't doing that, you are
wasting opportunities. And, of course, you can't even think of
starting it without having the CEO behind it.
Growth at General Electric because of Six Sigma.
JW: Tbe markets were good at the time we were implementing
Six Sigma, and it was a good time to be a CEO. We had massive
increases in market share and profit margin. How much was
dtie to Six Sigma? I don't know. Those in Six Sigma thought
SO OUALITV March 2005
they were responsible for the increases. Those in globalization
thought they were the reason for the increases. The services
group played a role too. However, I can say, in the case of Six
Sigma, specifically Design for Six Sigma, we brought new
engines, appliances and other prodticts to market in a period of
months instead of years. That makes for a happier customer
wbo just may shift more of a sbare of his business toward you.
Driving a company culture change toward Six Sigma.
|W: You try and make Six Sigma a leadership lool that
changes a company, if it [Six Sigma] is used as a mere cjuality
tool, it doesn't change tbe culture and you won't have the suc-
cess you need. Six Sigma must permeate every part of a busi-
ness to be successful. It applies to how well you close your
books as well as to how a company does appraisals.
Implementing Six Sigma in unionized shops.
|W: Six Sigma has to be made real. Wiiat are the advantages
and benefits for the associate who's paying his monthly dues?
You have to sbow wbat's in it for bim. Better products and
better customers mean more market share for your company
and more security for tbat associate. Six Sigma works best
when associates and shop stewards are made a part of tbe
process rather than left out of it.
The time spent on Six Sigma at GE board meetings.
JW: Every executive came every quarter with an example. We
pressed every single meeting for every executive to have a
story. Every year we highlighted the top people, gave them a
chance to present their results and their story to the company,
and gave tbem stock options and otber rewards. You want to
do these things to galvanize and energize people about Six
Sigma. You have to back up your decision to go witb Six Sigma
witb the right people and rewards. You need to celebrate it.
Is Six Sigma for everyone?
IW: It's not for everyone. It's not for one-up transactions nor
is it for Hollywood. However, it did work at NBC. We were
losing one or two million dollars a day in off-air time that
could have been used to generate advertising revenue. Six
Sigma helped us recover that revenue.
Changing the implementation of Six Sigma at GE.
JW: 1 wouldn't do anything different. We never had more than
two people at corporate headquarters who had Six Sigma
training. You can't have Six Sigma centralized. It's not a pro-
gram for specialists. It has to be in the tield with your best and
brightest, and be used as a leadership toot. It has to be in the
blood of all the associates.
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