Six Sigma and Scorecards

Six Sigma Black Belt training taught me many things…The most obviously interesting was the utilization of Balanced Scorecards for measuring the success of Six Sigma in terms of the gaps that exist in your current product or process. This is also useful for Project Selection, one of the most critical aspects of any successful Six Sigma deployment. Most companies do not currently have Scorecards…We, Expedia, do…This has enabled us to really understand the VOC or Voice of the Customer in terms of our output requirements. The outputs naturally become the VOP, or Voice of the Process and the gap that exists between the Outputs and the Output Requirements, becomes the opportunity by which you should focus your black belts. For example, lets say you had a call center, and your call center was measured by the Balanced Scorecard. If AHT or Average Handle Time, was of particular interest (though I personally disagree with focusing on AHT as it is subjective to your Contact issue types and to your forecaster’s accuracy, but for the purposes of illustration, let’s say you were measuing AHT and you saw it go Red. The Output would be AHT as MEASURED BY THE current process. The Output Requirement would be AHT in the eyes of the Customer (VOC). So, if your current state AHT = 10 minutes and your customer requirement was a 6 minute AHT, then I would focus a black belt onto filling the 4 minute gap. It’s as simple as that.
You would formulate a SIPOC or better stated as SIPORC, to map out the Suppliers, Inputs, Process, Outputs (Requirements) and the Customers, where Outputs = AHT = 10 minutes and Output Requirements <= 6 minutes where you objective statement or problem statement should be ‘Reduce AHT by 4 or less minutes’ and your defect would be any AHT > 6 minutes.
Since this was first generated by an indicator change on your Balanced Scorecard, you would know that your project is both of importance to your company and strategic goals (definition of what is a balanced Scorecard) and something that would generate large returns (reductions in AHT always translate into dollars, especially if your contracts are based on an average AHT of 10 minutes). You will have to renegotiate to realize those benefits, but it will be worth it overall, IF AHT is important to you.

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