More on Six Sigma and Data Quality

I wrote about intersections between Six Sigma, internal control and data quality. By way of background information, my department performs compliance functions, where we monitor information delivered by third parties and created through internal operations.

For example, we receive property-address information and derive new information like geospatial position through “geocoding” processes. Since we monitor data for compliance, our process inputs are hundreds of data elements, and our output is systematic, timely determination of whether data quality is acceptable or needs improvement. Anyone who works in the “governance, risk and compliance” arenas will appreciate the unique challenges associated with designing and optimizing monitoring processes. Characterizing measurement error is a constant challenge.

In a future blog, I will share our experiences with assessing measurement precision (Gage R&R) and understanding stability and bias. Here I want to focus on an immediate challenge, and request insight on best practices. Our compliance monitoring is very new. We are designing processes that will move compliance to the front end of our value chain, so we measure data quality at the “point of truth” and reconcile these data to points of consumption by risk, control and compliance functions. Our focus right now is on designing, piloting and calibrating our compliance monitoring.

Our approach is highlighted in my earlier blog on Six Sigma and data quality. We are beginning to produce expected-versus-actual defect rate observations for our critical data elements. These statistics are generating lots of interest and questions about how we define an expected defect rate (voice of customer) and determine the importance of a lower-than-expected defect rate (the focus of my writing). Two questions perenially come up:

First, does a lower-than-expected defect rate indicate a high, medium or low level of risk? Some critical data elements are more important than others and more sensitive to variance. Second, how do we come up with a risk rating?

We are now beginning to explore these questions. One approach would determine the financial risk associated with an unfavorable variance in data quality. Our enterprise risk management processes have not matured to the point, where a reliable methodology is available to us. A broader perspective would consider the reputational risk associated with an unfavorable variance in data quality. Other than benchmarking internal data quality against our industry, judgment prevails because methodological scoring for reputational risk is not feasible. In practice, risk assessment frameworks seem to offer broad criteria or rules of thumb, whereby we can draw conclusions about risk exposure.

Another challenge is connecting these criteria to defect-rate observations. We are exploring alternative tools, including FMEA. Your insight about the following will be appreciated:

• Are there best practices for assessing risk or cost of poor data quality? Are these best practices applicable to measurement observations?
• Are there lessons to be learned from manufacturing settings (e.g., techniques to estimate risk of product liability or cost of poor quality from raw-material defect rate observations)?
• How are companies using FMEA to assess process risks, based on process metrics? After all, data quality is a type of process metric.

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Can Leadership Be Taught?

Ask any company owner what their most valuable quality is, and many of them will say it’s their ability to lead. Being able to inspire members of staff can help you to get the best out of your team, push employees that little bit further and drive your company on to real success.

However, although leadership is an incredibly important skill in the world of business, it’s not a skill that everyone has. In fact, a lot of people, even those in senior management positions, struggle with effective leadership. This can leave employees feeling directionless and could cause companies to lose their way.

Luckily, although some aspects of leadership are intangible, some can be taught. These skills can help you to manage your team, navigate your way through complex tasks and push your company to ever greater heights. Keep reading to find out more.

Is leadership learned?

In short, the answer to this question is both yes and no. Some people have an innate ability to lead and can convince even the most unwilling team members to fall in line and throw their weight behind a project. However, there are definitely some important leadership skills than can be learned. These skills can help you to dramatically improve your leadership technique and give you the confidence, and the know-how, to succeed.

How to learn leadership

If you think improving your leadership skills could help you achieve more in your professional life, signing up to a respected leadership course is the best way to get your career on track. Courses like PRINCE2 can help improve your management skills. This can give you the confidence to expertly lead your team on projects of all kinds.

Learning effective management skills will help boost your confidence next time you’re in charge of a team or working on a project within your organisation. The skills you learn on the course will make it easier for you to manage all aspects of your project and guide your team to a successful outcome. If you feel more assured in your role, this will rub off on your team members, making them more likely to feel inspired by, and confident in, your leadership.

Who can benefit from a leadership course?

Leadership skills are relevant in all areas of business. Whether you’re managing one person or a group of 20, the skills you learn on a leadership course can help to make your approach more efficient and help you get more from every member of your team.

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Building the Foundation for Successful Change

As the filter coffee and leftover chocolate cookies are being gathered from across the vast boardroom table, the CEO leans back in his leather chair, stretches, lets out a sigh and purrs to his colleagues, “Excellent presentation, this will make a real difference. cutting edge you know and it’s bound to work – it did for GE after all.” And so the scene is set. Following a “nodding dogs” response from the rest of the board, another £500,000 (US$900,000) is headed down the drain along with another brand new initiative.

Sounds familiar, doesn’t it – the launch of yet another change initiative triggered by a compelling presentation from external consultants or even the latest textbook. But after decades of initiatives being unleashed on organizations, senior managers should now be able to understand more fully the things that need to be in place to enable successful change.

The Leader Is Critical to Success

Businesses rarely succeed with sustainable transformation initiatives unless they are led from the top. More and more organizations are coming to terms with the fact that there is a direct link between the success of change programs and leadership capabilities. But what does it actually take to be a great leader of change? Experience indicates some attributes that are essential:

◈ Vision, courage and conviction.
◈ The ability to take risks both at a personal and a business level.
◈ The ability to demonstrate commitment to change, not simply demanding it of others.

Organizations such as Motorola and GE that have implemented exceptionally successful change programs include the development of several key attributes in their leadership training.

Commitment of the Top Team Is a Priority

Whether it’s the board of an organization or department heads, committed managers are a key to successful change programs. Managers who only pay lip service to change are one of the swiftest ways to undermine transformation. Building a supportive team is an essential part of the early stages of any effort to restructure, re-design, retool or improve. John Kotter, in his best-selling book Leading Change, refers to such a group as a “Guiding Coalition.”

Kotter chose his terminology carefully. The word “guiding” is chosen to define the group as one that will not actually be implementing change, but rather removing barriers and creating an environment where responsibility is spread throughout the business. Any change program that will be sustainable must involve the full organization.

The word “coalition” (from the Latin coalitus, meaning to grow together) is an alliance, a group that has completely aligned objectives. Putting in place a credible group that acts as one and drives the change relentlessly is critical. Unfortunately, many senior teams struggle to act as a coalition, often pulling in different directions. The biggest threat to any change initiative is when this is done underhandedly, with leaders saying one thing in the boardroom but really challenging the decisions in the corridors. In a true coalition, there is not only unity of thought on the overall objective, but also an environment where differences of opinion on lesser issues can be aired constructively.

Obviously it is not all smooth sailing. Real change can be particularly threatening to managers. After all, they reached their positions by doing things in a certain way. At a fundamental level, senior people have to review their roles, responsibilities, attitudes, behaviors, personal leadership styles and above all – their relationships with each other.

Some of this can be uncomfortable. Experience shows that a true coalition will learn how to work through conflict to get a shared view as to the best way forward. Training and development play a critical role in facilitating this “growing together” of the coalition prior to launching any initiative.

Middle managers need to be on board early. Directors have a key role to play in leading from the top, but the attitudes and behaviors of middle managers also are vitally important. During the initial stages of a change program, there can be a great deal of excitement and activity. Keeping middle managers fully informed can ensure there isn’t a feeling of being marginalized. An ignored manager can end up undermining and blocking the change progress. Process improvement teams with good local management support tend to go from strength to strength. Conversely, such teams fizzle out and have to be rekindled when managers aren’t interested or see teams as a threat to their role.

Creating a Powerful Vision Is Vital

Developing a clear vision is important in making a culture change a reality. With an inspiring vision, people can see the exciting possibilities of the future and can begin to act in accordance with them. Keeping the vision in the forefront of an organization’s thinking will ensure that energy and focus are sustained.

What will the organization look like during and after the change program? Why should individuals and teams be engaged? What’s in it for them? What are the concerns that will emerge and how can they be addressed? These are all critical questions that a powerful vision can address.

Communicate, Communicate, Communicate

All organizations know that culture change communication takes time and effort – but the investment is worthwhile. It is critical for people to be reminded of the vision but also how far they have come. This helps maintain morale and belief in the change process. Positive evidence that things are changing will combat any cynics.

Communicate about 10 times more frequently than you think is necessary. Reseach shows that on average the total amount of communication going to an employee during a three-month period is 2.3 million words or numbers, transmitted in meetings, notice boards, bulletins, etc. The typical communication of a change vision during a period of three months is approximately 13,400 words or numbers. So on average the vision communication captured only 0.58 percent of the company communication market share – nowhere near enough.

Communication is not through words alone – it’s the dance and the music too. Clear messages are sent through actions. It never ceases to amaze that companies struggle to re-launch an improvement program after just having concluded a downsizing where change facilitators were first on the list to go.

Create and Train the Facilitators of Change

Engaging people throughout the organization in change activities is a departure from the old directive style of leadership. The best way to enable broad-based action through teamwork and securing the success of change teams is by trained facilitators. (The word facilitator comes from the Latin facere, meaning to make easy or simple.) Armed with powerful tools of problem-solving and an ability to inject energy and enthusiasm, these individuals can be the catalyst of any change initiative. By seeking volunteers from the organization who, with training, can be capable and credible agents of change, the backbone of change will be in place.

Organizations using Six Sigma as their improvement initiative should select appropriate Black Belt training programs for their facilitators. Some Black Belt certifications emphasize technical, analytical or statistical skills and ignore people skills. With too much emphasis on the technical, organizations can be thrown into confusion when Black Belts return from their development program all fired up and speaking a new, unfamiliar language. Black Belt training should be a balance of hard (tools and statistical analysis) and soft (behavioral skills). Then the outcome is likely to be the sound application of cutting edge techniques that are clearly understood and warmly received.

Meanwhile back in the boardroom, the coffee has been cleared away and the meeting is beginning to wrap up. Then, one by one, board members begin asking questions: “How will we communicate this to the business?” “How can we engage our middle managers?” “Has anyone thought about how we can resource it with trained facilitators?” “What exactly do we expect this will achieve – what will the business be like in two to three years as a result?” “What capabilities will I need to develop to make this change program a success?”

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Thinking Two Moves Ahead with Analytical Tools

Considering the performance of the stock market over the past few years combined with current economic conditions, many financial institutions are analyzing their processes for improvements. Unfortunately, the majority of process improvement tools available to Six Sigma practitioners – such as cause-and-effect diagrams, Pareto charts, histograms and scatter plots – have been used for analyzing past performance.

What the financial services industry needs to do, given a still uncertain future, is leverage tools that focus more on analyzing what might happen, taking into account current situations and brainstorming about the future. For this purpose, there are two lesser-known tools that can be beneficial: 1) the relations diagram and 2) the systematic diagram.

At a very high level, the relations diagram is a tool used to systematically identify, analyze and classify the cause-and-effect relationships that exist among critical issues. The systematic diagram is one that displays the means necessary to achieve specific goals and objectives.

The Relations Diagram

The relations diagram was created in the 1950s by Ithiel de Sola Pool, a pioneer in the field of social sciences. He led groundbreaking research in the arena of technology and coined the term “convergence” to describe the effect of various scientific innovations on society. Pool also was interested in the quantitative analysis of communications, and his relations diagrams (sometimes known as content analysis, interrelationship diagrams or conceptual analysis) were first used in the electronics industry to find key words and phrases in text.

The relations diagram (see Figure 1) allows for the examination of problems from a broad perspective, and encourages opinions of process performance to be expressed freely, thereby eliminating preconceptions. Also, it helps organize and explain problems that have a complex factor relationship. With this tool, ideas generated in team brainstorming sessions can be presented and organized in a manner that is more scenario-specific.

Figure 1: Sample Relations Diagram

Specifically, the relations diagram captures the issues related to a problem and examines their relationship among each other. In Figure 1, for example, five symbols (shapes) represent issues that are part of the problem (as stated in the problem statement). Those elements are then compared to all others and “influence” arrows are drawn to connect related elements.

Producing the Relations Diagram

1. Identify the problem – An ideal team to construct the relations diagram consists of four to six people. As with most problem-solving techniques, the team must start by crafting a clearly defined problem statement to make it easier to focus thinking during the exercise. This statement should be brief (25 words or less) yet also specific. For example: “Why doesn’t the sales database get updated?”

2. Capture the issues – After the problem statement is created, it is time to identify the current issues at hand. One way to accomplish this is to lay out all the ideas for the issue on a white board or on 3 x 5 cards. If the relations diagram is being created as part of a process improvement project, the issues can also come from the main branches of a fishbone diagram or the main categories of an affinity diagram.

3. Draw the arrows – Next, choose any issue to start building the relations diagram. Utilize arrows to connect the various issues. The arrows should be drawn from the element that influences to the one being influenced. An outgoing arrow shows greater cause than effect while an incoming arrow shows greater effect than cause. Typically, a dotted line is used to mean it has a lesser influence. If a situation exists where two elements influence each other, do not draw two-headed arrows; instead, the arrow should be drawn to reflect the stronger influence. Figure 2 shows a completed relations diagram.

Figure 2: Relations Diagram with Captured Issues

Problem statement: Why doesn’t the sales database get updated?

4. Count the influencers – Finally, count the arrows. The elements with the most outgoing arrows will be root causes or drivers. Conversely, the issues with the greatest number of arrows coming in will be the key outputs or results.

The actual format of the relations diagram is unrestricted, limited only to the team’s creativity. Even though diagrams may differ, if they are focused on the same problem, the conclusions are typically the same. However, if the connections between the factors are too simplistic, the arrows may point in misleading directions. On the other hand, when portraying factors in too complicated a fashion, the diagram becomes difficult to understand.

Relations Diagram Matrix

Often, the problems a team is trying to solve come with many associated issues. While spaghetti diagrams are helpful in conveying the seeming chaos of this situation, they can be difficult to navigate. Alternatively, a relations diagram should be relatively easy to interpret. When a multiple-issue situation presents itself, a matrix version of the relations diagram may be appropriate as illustrated in Figure 3.

Figure 3: Relations Diagram Matrix

The Systematic Diagram

Although the systematic diagram was created in the 1970s, it was no doubt inspired by the learnings of Kurt Lewin, who is perhaps best known for developing force field analysis in the 1930s and the application of force field diagrams – a technique often deployed in the Lean Six Sigma toolkit. Lewin utilized a systematic diagram-like tool to solve an issue fundamental to social and personality psychology, namely the relative contributions of personality and social environment to human behavior. The systematic diagram was originally designed to aid reliability analysis of nuclear power plants in Scandinavian countries by identifying the potential modes of component failure. The diagram related the causes to consequences for the system.

The systematic diagram displays the means necessary to achieve specific goals and objectives. It can be used to find the most suitable means of realizing an objective amid multiple paths; something many practitioners often face. This is much like the “5 why’s” technique that is often used to drill down to a root cause during problem solving.

The systematic diagram also facilitates the transition from theory to action and helps identify the true complexity of achieving a goal. It is instrumental in the development of objectives and solutions and helps clarify departmental and control functions. Once cause-and-effect or fishbone diagrams have been used to brainstorm on all possible causes, a systematic diagram can help bring order and clarity to the goals and means.

Producing the Systematic Diagram

1. Select the CTQ Goal – The key to creating the systematic diagram (Figure 4) is to start with the “end in mind” by selecting a customer CTQ goal. This can come from taking the step with the greatest outputs (root causes) in a relations diagram and placing it at the head of the systematic diagram. Or a team can transform the original problem statement into more of a stated goal/CTQ. If, however, the team is developing the systematic diagram as a stand-alone tool, the first step is to create the problem statement, which should contain the primary critical-to-quality (CTQ) metric.

Figure 4: Three Levels of the Systemic Diagram

2. Populate the levels – Figure 4 details the three levels of the systematic diagram, with Level 1 being the primary goal or CTQ. The second level represents the likely problems the team encounters. In addition, this second level could be utilized for goal achievement. The third level represents the countermeasure or actions the team can take to mitigate the problems. In other words, what activities are needed to correct the prior level? Team members should be certain to capture assignable tasks, due dates, responsible resources and so on.

After the team has captured the goal and CTQ – and is brainstorming through the various levels of the diagram – team members should be sure to ask questions and challenge the items on the table. For example, “How do we make that happen? Why do we need this? Is there something obvious that was forgotten? Do I really need to do all these tasks to meet the objective?”

To rank the listed countermeasures in order of importance, practitioners may choose to have the team employ a multi-voting process. With this tool, each member ranks each item with a number that corresponds to its importance. Those with the highest rankings receive the most attention.

Like chess players, practitioners who use relations and systematic diagram tools not only can analyze past moves, but also look forward two or three moves, planning for the future. This positions them to better achieve their goals.

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7 Project Management Skills You Need to Succeed

Good project management skills are incredibly useful in virtually all industries. From finance to fine arts and events to accounting, most businesses need people who can manage projects effectively and successfully. You might be looking for ways to enhance your project management technique. If so, take a look at these seven essential skills every successful project manager should have.

1. Communication

To effectively manage a project, you need to be able to communicate well with all the members of your team. Whether you’re managing a team of two, 10 or 100, you need to know you can get your message across quickly and easily.

2. Leadership

Whether or not you’re the most senior member of staff by rank, as the project manager, people will look to you for leadership. Effective leadership will help your project achieve its goals and bring your hard work to a successful conclusion. If you feel you currently lack the leadership skills required, take a course to boost your confidence and your management style.

3. Time management

Time management is a big part of project management. If you’re going to bring your project in on time, you need to ensure that no part of the process takes longer than it should. As well as managing your own time, you need to help your team manage their days and get the most out of the nine to five. The more efficient you and your team are, the more likely you’ll meet your deadline.

4. Negotiating

Good negotiating skills will help keep your project on track and clear from significant roadblocks. Negotiating often means making compromises and working alongside other individuals and organisations. If you can do this well, your project will have an excellent chance of success.

5. Organisation

Organising both your personal and professional lives will help you stay focused. If you’re not currently very organised, put some time and effort into getting your calendar, desk and mind in order before your project gets underway.

6. Risk management

Sometimes, despite our best efforts, projects don’t always go to plan. If your project doesn’t work out exactly as it should, you may find yourself in the firing line. Managing the risks of your project as it goes along will help ensure your position isn’t threatened if things don’t go your way.

7. Problem solving

Almost all projects come up against a few challenges. Finding ways to overcome these challenges will help your project succeed and keep it on time and on budget.

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