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February 2016 • QP 45
Role Call
SIX SIGMA ORIGINATED in the manufacturing industry,
but its popularity has caught fire throughout the service industry
unlike any other process improvement movement.1 The define,
measure, analyze, improve and control (DMAIC) method is com-
monly used by organizations as a roadmap for process improve-
ments through Six Sigma project management.
Lean is another popular process improvement
method. With roots in the Toyota Production System,
it has had a wide range of uses—from manufacturing
to transactional and service industries.
Lean organizes activities into three categories:
value added, nonvalue added or necessary nonvalue
added.2 The method focuses on removing nonvalue-
added activities—waste—from a value stream.
LEAN AND SIX SIGMA
A structured approach to
managing stakeholders
in lean Six Sigma projects
by Vijaya Sunder and Shashank Shah
In 50 Words
Or Less
• Lean Six Sigma (LSS) is
useful in the financial
service industry because
it can increase revenue,
lower costs and improve
collaboration.
• To address unique indus-
try challenges in deploy-
ing LSS, the authors
interviewed 56 project
managers from sev-
eral countries to create
a model for stakeholder
management tailored for
their industry.
!
QP • www.qualityprogress.com February 2016 • QP 4746
Stakeholder management
We conducted a study by interviewing 56 global project
managers to understand the challenges and approach-
es to managing stakeholders during LSS projects at fi-
nancial institutions. Managers were selected based on
their global exposure to different multinational finan-
cial institutions. Their median work experience was 15
years.
These respondents were from various parts of Asia,
Europe and the Americas. They voiced several chal-
lenges:
• About 60% of respondents said they believed stake-
holder management failure results in overall lack of
success for LSS projects in financial institutions.
• More than 50% conveyed the idea that a change ac-
celeration process would be challenging without the
right stakeholder connection.
• About 90% said they believed internal stakeholders
of financial institutions play major roles in the im-
prove phase of a project. Internal stakeholders in-
clude project champions, sponsors, cross-functional
team members and operations leadership.
• When questioned about structured stakeholder
management, 92% of respondents said they were not
aware of any structured stakeholder-management
framework for LSS projects.
• Respondents also said that documenting stakehold-
er traits to create a trait-based structure or knowl-
edge base for future project managers would not
be a professional way of dealing with stakeholders
in the corporate environment. Understanding the
personality traits of the stakeholders, however, is
essential for a project manager, even though docu-
menting these is not suggested.
• Almost 90% said they believed identifying the root
cause of a problem is not a challenge when the LSS
approach is followed and leads to complete employ-
ee engagement. The key challenge lies in convincing
stakeholders and having them sign off on the root
cause analysis.
• More than 50% said they believed conflict of inter-
est among stakeholders is another key challenge
that LSS project managers often face without proper
stakeholder analysis.
• About 90% said that even though stakeholder analy-
sis is part of the define phase of LSS projects, it is
often based on the prior knowledge about a stake-
holder. If a new project manager is completely un-
aware of a stakeholder, he or she cannot perform a
stakeholder analysis with accuracy and confidence.
• All respondents said they believed a structured
stakeholder framework could help in LSS project
management.
Key stakeholders in DMAIC
The stakeholder concept dates back to the 1960s when
academicians at the Stanford Research Institute first
used the word “stakeholder.” It was considered a con-
troversial proposal at the time.7 Their definition was
that a stakeholder can affect or is affected by the
achievement of the organization’s objectives.
Effective stakeholder management requires proac-
tive and ongoing engagement, which includes identi-
fying stakeholders, communication, risk planning and,
most importantly, active collaboration throughout the
project life cycle.8
Every LSS project is unique to the style of its project
manager, business criticality, scope and the change ac-
celeration process involved in the execution. But there
is a bigger effect on LSS project success that’s based
on key stakeholders.
Table 1 lists the key stakeholders of an LSS project
across the DMAIC phases. Its creation was based on
our interviews with LSS project managers at the Black
Belt level in financial institutions.
Define: The primary stakeholders in this phase are
the end customers. The define phase collects the voice
of the customer through surveys or interviews and is
followed by the creation of a project charter.
This phase also vets the project charter with the
assistance of the project champion—who is generally
from an organization’s operations department and will
be involved in providing production-level governance
of the project. Our study revealed the project spon-
sor—typically a decision-making authority or head of
operations in most LSS projects—also plays a stake-
holder role in the define phase.
Measure: This is when data are collected, process-
es are mapped and their capabilities are assessed. The
project manager plays an important role in these ac-
tivities. In some cases, however, project leads facilitate
the process, and data-collection agents and process
mapping experts perform the groundwork.
The measure phase also involves performing an ini-
tial failure mode and effects analysis (FMEA) to un-
derstand hidden process risks. Respondents said they
LEAN AND SIX SIGMA
Waste is anything that does not add value to the
end product from the consumer perspective.3 Lean or-
ganizes waste into seven categories: overproduction,
inventory, overprocessing, motion, waiting, defects
and transportation.4 Organizations often use lean tech-
niques such as:
• Just-in-time production—a manufacturing pro-
cess that involves having little or no material inven-
tory on hand at the manufacturing site by using an
optimal material requirement planning system.
• 5S—five Japanese terms that begin with the letter
S, and they are also five English words or phrases
starting with that letter: sort, set in order, shine,
standardize and sustain. It is a technique to for cre-
ating a workplace suited for visual control.
• Poka-yoke—a tool that easily identifies a flaw or
error, or prevents incorrect parts from being made.
• Visual controls—a system of signs or indicators
that make operational standards and problems eas-
ily identifiable to even casual observers.5
Lean Six Sigma
Lean and Six Sigma complement each other and can
achieve greater results than those typically achieved
by lean or Six Sigma individually. Combining these
methods creates a comprehensive toolset that can in-
crease the speed and effectiveness of any process in
an organization. It could help increase revenue, reduce
costs and improve collaboration.
Some quality professionals see differences in
the methods from a deployment perspective. Even
if the definitions of Six Sigma and lean differ, they
share common goals. The term lean Six Sigma (LSS)
is used to describe the integration of lean and Six
Sigma philosophies.6 Integrating these methods can
broaden the target of an organization’s improvement
efforts to include almost every type of improvement
opportunity.
LSS in the service industry
Banking and financial service organizations are always
looking for ways to cut costs and improve efficiency,
and this is where LSS becomes important. LSS project
management for financial institutions is different from
other industries for five key reasons:
1. An LSS project has a direct, financial impact on ev-
ery change that is implemented because of the risk
involved in the financial sector.
2. Financial institutions generally have huge customer
bases. Without structured analysis, it’s difficult to
meet evolving customer needs, and LSS offers a
structured problem-solving approach.
3. LSS projects in financial institutions help sustain
projects’ results with robust controls and mistake-
proofing concepts.
4. Measuring process performance becomes a key in-
dicator of financial institutions’ productivity. This
could include error rate, turnaround time or cus-
tomer satisfaction scores. LSS provides structured
ways to measure and visualize a firm’s performance
metrics.
5. Other project-management methods do not have
tools that can cut across different logical and in-
tuitive philosophies of management. But LSS en-
courages a financial institution to balance logical
thinking for measurement and intuitive thinking for
ideation, making it suitable for banking.
Several financial institutions have published stories
about their successes in adopting LSS, such as Bank of
Montreal, Bank of America, Capital One, HSBC Hold-
ings, American Express, Capital One, Westpac, Stan-
dard Bank Group and Bank One.
Key stakeholders
Define
phase
Measure
phase
Analyze
phase
Improve
phase
Control
phase
Change acceleration
agents from operations ✔
Customers ✔ ✔ ✔
Data-collection agents ✔ ✔
Knowledge management
team ✔ ✔
Operations business
head (sponsor) ✔ ✔ ✔
Operations risk and
control team ✔ ✔
Process mapping experts ✔
Process subject matter
experts from operations ✔ ✔
Project champion ✔ ✔ ✔ ✔ ✔
Project manager (lead) ✔ ✔ ✔ ✔ ✔
Project team members ✔ ✔ ✔ ✔ ✔
DMAIC = define, measure, analyze, improve and control
Stakeholder involvement in
DMAIC / TABLE 1
QP • www.qualityprogress.com February 2016 • QP 4948
key metrics or performance indicators.
• Operations risk and control team: This is the part
of a financial institution’s support function that moni-
tors key risks involved in transaction processing.
• Data-collection agents: These agents help project
managers adhere to the data-collection plan.
• Critical evaluators: This group evaluates the prob-
lem logically, highlighting probable root causes.
• Process mapping experts: In many LSS projects,
the project manager takes the responsibility of map-
ping processes for understanding at the transaction
level.
• Creative thinkers: These are individuals who can
ideate outside-the-box solutions for problems natu-
rally or by using structured thinking processes, such
as the theory of inventive problem solving (gener-
ally known as TRIZ), which relies on data and logic
rather than intuition.9
The Three I model
Table 2 illustrates the Three I model for stakeholders
in LSS project management. Stakeholders must be in-
formed, involved and influenced at different stages of
the project.
From an overall project-management perspective,
it’s important that the stakeholders listed under the
inform category are always updated on milestone suc-
cesses and next steps. It’s critical for a project manager
to formulate a robust communication plan that refers
to the modes of communication for different stake-
holders in this category.
Involving selected stakeholders in different project
phases offers benefits such as accelerating change for
improvements by having less resistance, developing
the knowledge base, creating a sense of involvement,
identifying pain points in a process and generating
ideas for solutions. But not all stakeholders must be
involved at every stage of the project.
Project hurdles can arise if unnecessary stakehold-
ers are involved because at any phase, they can create
confusion and misdirect a project. Not involving ap-
propriate stakeholders due to ineffective communica-
tion that leaves them unaware of improvements also
might lead to serious problems, such as a loss of in-
terest due to feeling uninvolved or the development of
cross-functional barriers.
Influencing stakeholders is a critical and inher-
ent part of LSS project management. This is because
a project manager for most LSS projects comes from
a support function or an external consulting firm and
is not part of operations. This makes it challenging to
manage the change acceleration process throughout
the project life cycle.
An LSS project manager may face a lack of coopera-
tion from individuals in operations or struggles with
implementing changes into processes. This is why it’s
essential for this person to be capable of influencing
people.
This influence could involve meeting with stake-
holders for informal conversations, networking ses-
sions, formal meetings or group discussions. Influenc-
ing senior leaders, such as project sponsors, requires
a solid business case that highlights the benefits the
project could deliver to the organization.
Handling different sets of stakeholders across dif-
ferent levels of an organization is a challenging art.
There is no hard-and-fast rule for managing a set of
stakeholders, and our interviews with global project
managers revealed a structured approach in manag-
ing LSS stakeholders could make for smooth project
execution. QP
REFERENCES
1. Vijaya Sunder, “Six Sigma—A Strategy for Increasing Employee Engage-
ment,” Journal for Quality and Participation, July 2013.
2. Anders Nielsen, “Getting Started With Value Stream Mapping,” white paper,
Gardiner Nielsen Associates Inc., 2008, http://tinyurl.com/valueofvsm.
3. Fred E. Meyers and Jim R. Stewart, Motion and Time Study for Lean Manu-
facturing, third edition, Prentice Hall, 2001.
4. Ibrahim Rawabdeh, “A Model for the Assessment of Waste in Job Shop
Environments,” International Journal of Operations and Production Man-
agement, Vol. 25, No. 8, 2005, pp. 800-822.
5. “Visual Controls,” Isixsigma.com, www.isixsigma.com/dictionary/
visual-controls.
6. John H. Sheridan, “Lean Sigma Synergy,” Industry Week, Vol. 249, No. 17,
October 2000.
7. R. Edward Freeman, Strategic Management: A Stakeholder Approach,
Cambridge University Press, 2010.
8. Philip J. Kangas, “Stakeholder Management 101,” Quality Progress, March
2011, p. 72.
9. “TRIZ—A Powerful Methodology for Creative Problem Solving,” Mindtools.
com, http://tinyurl.com/whatistriz.
LEAN AND SIX SIGMA
believed it was a good practice to review an FMEA
with the risk and control team if one exists in the or-
ganization.
Analyze: In this phase, the root cause of the prob-
lem is investigated with the help of lean and statistical
tools. The project lead will perform most of the activi-
ties in this phase, and process subject matter experts
(SME) will be stakeholders who participate in brain-
storming sessions to identify and understand the root
causes.
Improve: Process SMEs and change acceleration
agents are stakeholders in the improve phase and can
smoothly implement proposed changes. Because im-
provements must be implemented into operations at
the right time and in the correct proportions, change
accelerations become important. Our interviews
showed that the project champion plays the role of a
change acceleration agent in many LSS projects.
Control: This phase is about placing the right
controls for sustaining improvements and document-
ing lessons learned from the project. Mature financial
institutions generally have knowledge management
teams as stakeholders that help document the project
and maintain a log of lessons learned.
Structured stakeholder management
Based on feedback received during our interviews,
we designed a structured model for stakeholder man-
agement (see Table 2). This model helps stakeholder
candidates overcome the challenges identified in the
previous section by elaborating on the roles and their
definitions:
• Project sponsor: In most of the cases, a financial
institution’s head of operations played the role of
the sponsor.
• Operations leadership team: This is the executive
team that runs day-to-day operations. The opera-
tions leadership team has decision-making authority
in many financial institution structures. The project
sponsor will be a member of the operations leader-
ship team, but in some organizations, this will not
be the case.
• Knowledge management team: This team main-
tains records of every completed project and guides
the project manager to using existing knowledge to
resolve new project opportunities without reinvent-
ing the wheel. This team also provides guidelines for
documenting lessons learned from LSS projects. In
some organizations, the project management office
takes on part of this responsibility.
• Process SMEs: This is a team of tenured and
knowledgeable resources from operations, specifi-
cally from the domain in which the LSS project is
being executed.
• Project champion: The project champion is from
the operations leadership team, and he or she will
be from the area in which the project is undertaken.
Champions play an important role in reviewing and
signing off on every phase of the project.
• Customers: These can be banking clients, counter
parties (such as national banks, governments or na-
tional monetary authorities) or regulatory bodies.
The group of customers varies on a case-by-case ba-
sis for LSS projects.
• Data management team: This team maintains data
in a dashboard and updates leadership on trending
SHASHANK SHAH is a visiting scholar at Harvard
Business School and project director at the Harvard
University South Asia Institute in Boston. He has a doc-
torate in corporate stakeholder management from Sri
Sathya Sai Institute of Higher Learning in Puttaparthi.
VIJAYA SUNDER is lead program officer in the business
process excellence office of World Bank in Chennai,
India. He earned an MBA from Sri Sathya Sai Institute
of Higher Learning in Puttaparthi, India. Sunder is a
certified lean Six Sigma Master Black Belt from the
Indian Statistical Institute, Chennai.
Inform Involve Influence
Define
• Project sponsor
• Operations
leadership team
• Knowledge
management
team
• Customers
• Project champion
• Data management
team
• Customers
• Project
sponsor
Measure
• Project champion
• Operations
leadership team
• Process subject
matter experts
from operations
• Data-collection
agents
• Operations risk
and control team
• Process mapping
experts
• Data
management
team
• Operations
leadership
team
Analyze
• Project champion
• Operations risk
and control team
• Process subject
matter experts
from operations
• Critical evaluators
• Operations
leadership
team
Improve
• Process subject
matter experts
from operations
• Project champion
• Project sponsor
• Change
acceleration
agents
• Creative thinkers
• Operations
leadership
team
Control
• Project sponsor
• Operations
leadership team
• Data-collection
agents
• Knowledge
management team
• Process mapping
experts
• Data
management
team
• Project
champion
Three I model for stakeholder
management / TABLE 2
