Challenges of Implementing Six Sigma at Yarra Valley Water

Speaker A Yarra Valley Water is a company that provides water and sewage services to 600,000 homes. We service a third of Melbourne. Melbourne's, a city of about three and a half million people in Australia. I've been with the company for about six years, but I've only been in my current role for 18 months. And when I started in my current role, I firstly was learning to use the concepts of requisite organizations supported by Sheila Dean. And I was not an expert in Six Sigma, yet I had a Six Sigma group reporting to me. So I've got vague understanding of what Six Sigma technical questions about Six Sigma because I don't know the answers and you can ask them to Ken. So the structure that I inherited, we're a Five led organization, had a managing director. We had engineering and we had customer operations. And at the time, the thinking in the business was, well, the engineers do all the engineering bit, which is about pipes and building new pipes and operating pipes, and custom operations dealt with customers because you can't trust engineers to be nice to customers. Within custom operations, we both dealt with I have got the contact sensor, but also used to read the meters, send out bills, collect money. It was basically the accountabilities of custom operations. We had corporate services, function and then a couple of other groups over here that are not particularly relevant to the discussion within my group. I had a line manager here, a line manager running the contact center. And then I had a master black belt reporting to me. About three years prior to this, someone had decided that Six Sigma would be good for Yarrow Valley Water. We've got a lot of processes, and there must be efficiencies to be gained. And the decision was made was to put the Six Sigma group in customer operations, even though the intent was that Six Sigma would provide services all across the company. So we had our master black belt here, and then we had a range of black belts reporting to the master black belt. Now, what I found was a master black belt who knew that he was failing. He knew that Six Sigma at Yaravalli Water had not been effective. He hadn't been able to deliver the returns to the company, and he certainly hadn't been able to prove it in the data. And he was pretty miserable. We also had a bunch of black belts down here who weren't all that happy either. And one of these black belts, when they were inducting me into my new role, was extremely proud of the internal communications plan that he had developed to go out and market his services to the rest of the organization. What a great plan it was and how it had got him a couple more jobs. And that, to me, was a real symptom of some malaise. Why the hell should a guy who's an expert in Six Sigma be having to go and market to the rest of the organization. So in terms of diagnosis, clearly we've got levels problem here. These guys, I believe, are thinking at level three. We can have lots of discussions about whether they should be or not. But as far as I'm concerned, these guys are level three thinkers using their skills to actually not just diagnose, but redesign processes. This guy's clearly in a level three role. So you've immediately got some level squashing there. Second problem is that this managing director had made the black belts themselves accountable for providing process improvements in the business instead of making the general managers accountable, and hence the line accountable for the efficiency of their process. Thirdly, clearly, if it was intended to be applied across the organization, then why the hell was it sitting in a line group which was customer operations when it was clearly corporate function? There was no clear task assignment and there were no tirs or rules to describe how these guys could work across the organization. So that was what I found and this is what I did. So the first thing I did was restructure. Now, I also used this was a beautiful Trojan horse for me to go and explain to my managing director why his actual overall company structure was inappropriate. And we've actually just implemented this Restructure Now. But what we've done is divide these two groups into three key processes in the business. Now, in our business, there are three key processes. The first one is that we have to connect new properties to our system. So we've got a subdivision happening on the fringe. They need access to water. They need access to sewer. So that's one process, which is this one. The second one is we actually have to deliver clean water to a property, and we actually have to take away dirty water from a property. That's the service group. And then finally, we have to send them a bill. And then we have to take all their queries about why they can't pay or won't pay and provide them a whole lot of channels for payment. So we've actually just implemented that now. So I was able to use Six Sigma to explain to my managing director why a structure was not as good as it could be. And he's just implemented that. But what I was able to do immediately, so if you forget about that for now, is I was actually able to take one of these black belts here and take them as a direct report to me rather than working through this master black belt structure. Now, what we then did was we were able to set up establish what the tirs were for this guy working across the group. Now, clearly, he's thinking at level three and he's doing analysis on the process. These guys are actually running the process over here. So the key to making Six Sigma work in this organization is for this person who happens to know myself, to do their job of integrating these roles. So there's a couple of things I've done to integrate those roles. I've established what the Tirs are and I also did an alignment session. Now, Sheila had talked about where you need to do alignment. I'm going, what the hell does that look like? So all along I'm learning what requisite organization is here, because I'm no expert in requisite organization. So we did an alignment process and Sheila's advice to me was, jenny, you work out the process that you're going to use for actually doing Six Sigma projects and then discuss that with your team and see if that's what works. And we agreed that the process for doing Six Sigma work involves initiating a project, analyzing options, designing solutions, implementing solutions and reviewing outcomes, something along those lines. And I took that process to my team and I said, well in this, this is what the black belt would do, this is what the general manager do, this is what the line would do, have a look at this. And they all go, yeah, that's fine. And then we actually get in the room with Sheila. We put aside 3 hours to do this, to actually do our alignment, only to realise that we still actually weren't clear what happened here. We still weren't clear who did what. So we went back to the drawing board and spent another couple of hours on it. And this guy spent a bit more time on it and I spent a bit more time on it. We came back again to my team the next week and we had a slightly similar process. We got closer, but we still hadn't quite got it right in terms of who does what, what are the stages in this process. So it was the key learning for me there is to do an alignment, you have to be very clear around what the process is that you're actually doing an alignment on. We got to our third three hour session by this stage and it's probably fair to say that a lot of this time is also spent, again, just all of us bringing our skills up to date in terms of understanding some of the key concepts within requisite organizations. So that was all quite worthwhile as well. And then we actually did the alignment and at the end of the alignment, what we've got, and I can provide anyone with a table if they're interested in it, but for each of these stages, we've got who does what. So the Tirs are embedded in this table. So it might say initiate. And under initiate, it might say that the black belt is accountable for initiating a project if he sees something that's worth initiating. And also the line manager is accountable for identifying something that should be looked at as well. Under analyse, it will say that the black belt is accountable for doing the analysis. The line manager is accountable for providing any information that's required for the Black Belt to do their analysis and for participating in any workshops in order to provide advice and initiatives. And then it's the general manager's role. So that's my role to actually decide which bit we're going to analyze at this. After the analysis, the general managers actually decides which project we're going to do. So once we got through this phase and we get to implement, it's also important that me as the general manager do a written task assignment for the Black Belt at this stage. So if we've decided we're going to do a piece of Six Sigma on X, then I'm accountable as this guy's manager to write a written Cpqrt for this particular project. So I'll often do one I'll do one for do some Six Sigma work on this project so we can work out what we're going to do. And then when it gets to implement the stage and it's clear that I'm accountable for deciding what we're going to implement, not the Black Belt. And then when it comes to implement, I will often issue a task assignment to the line which says, I want you to do this. And I'll often provide as a resource to that line manager this Black Belt resource to actually project manage the task. So I write the task assignment out for the line manager. I have not had one example of this guy coming in and saying, so and so is not doing their job. I can't get my work done. Nor I've had an example of these people going, I'm sick to death of this person, whatever my business. So all that effort I put into alignment up front has for me paid off in spades in terms of having clear roles, clear accountabilities, clear authorities. And so I don't have to sit and firefight or sit and negotiate disputes between my staff. So, in conclusion, I believe that Six Sigma is an extraordinarily useful tool. It's actually difficult to initiate in an organization because Six Sigma Black Belts are specialists, and most organizations are not good at integrating specialists and providing them with the appropriate rules to work across an organization. And therefore trying to implement Six Sigma without using the requisite principles is my personal view, is unlikely to be very successful. And I'm no academic. I don't know what the success of Six Sigma across the world is, but I suspect that there's a lot of partially successful implementations of Six Sigma, and I say that this is why. Thank you.