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Merging Six Sigma And The Balanced Scorecard

Jul 24, 2008
These activities of Six Sigma projects are aligned to organizational objectives. Properly developed strategies, which are built up by listening to the voice of the customer, are better constructed to suit customer requirements.

The Balanced Scorecard Explained

The Balanced Score Card is another tool that helps organizations to focus on various aspects of the business while providing a complete appraisal of the progress of the organization. Employees can concentrate on improving the performance of their area of work without affecting or damaging the other related sectors of the organization.

The Balanced Score Card requires employees to convert their organizational goals to performance metrics. They have to connect these aspects to the customer's view of the organization, the internal processes of the organization, the continual improvement of the organization and the financial aspect from the shareholders' point of view.

Both Six Sigma and the Balanced Score Card are tools that rely heavily on the metrics for improvement efforts in the organization. Integrating the two can be beneficial in bringing about even more focused efforts by Six Sigma leaders on overall organizational performance.

Additionally, both the methodologies rely on accurate data and on metrics to communicate the progress route and the objectives. Balanced Scorecard allows for performance metrics to be labeled with red for poor, yellow for mixed results and green for excellent results.

These ratings can help Master Black Belts and Black Belts isolate areas that need immediate attention. They can initiate projects to impact these poorly performing areas. The areas with red ratings require immediate and urgent work to be done for their improvement. Their poor performance can have an undesirable impact on other areas of the organization.

The Balanced Scorecard becomes a powerful tool for Six Sigma project leaders to prove the need for change in the processes in these areas.

Employee Participation

Understanding these key areas helps employees understand and develop strategies for their improvement. The ratings can motivate employees to play a role in their improvement and sustain them for longer periods. They will also be able to appreciate the impact of their efforts on the betterment of the area of concern - and in turn, the continued growth of the organization.

Employees' active participation in Six Sigma initiatives often has a positive impact on the pace of the improvement effort, with less resistance to change.

This provides the mechanism for steering the organization's alignment and maintaining balance across the enterprise. The statistics provide the most critical to quality aspects for the Six Sigma teams to focus their efforts on improvement.

The integration of Six Sigma and the Balanced Scorecard is one solution that will help organizations to align strategic objectives with a clear measurement of impact on the activities and the growth of the business as well as stakeholders.
About the Author
Tony Jacowski is a quality analyst for The MBA Journal. Aveta Solution's Six Sigma Online offers online six sigma training and certification classes for six sigma professionals including, lean six sigma, black belts, green belts, and yellow belts.
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