Page 491 - Fundamentals of Management Myths Debunked (2017)_Flat

490 Part 5 • Controlling
certification can be a prerequisite for doing business globally. Achieving ISO 9000 cer-
Six Sigma
A quality standard that establishes a goal of tification provides proof that a quality operations system is in place. As of 2009, more
no more than 3.4 defects per million units or than 1 million certifications had been awarded to organizations in 175 countries. Almost
procedures 40,000 U.S. businesses are ISO 9000 certified. More than 200,000 Chinese firms have
project received certification. 50
A one-time-only set of activities with a definite (2) More than 30 years ago, Motorola further popularized the use of stringent quality standards
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beginning and ending point through a trademarked quality improvement program called Six Sigma. Very simply, Six
project management Sigma is a quality standard that establishes a goal of no more than 3.4 defects per million
The task of getting project activities done on time, units or procedures. What does the name mean? Sigma is the Greek letter that statisticians
within budget, and according to specifications use to define a standard deviation from a bell curve. The higher the sigma, the fewer the
deviations from the norm—that is, the fewer the defects. At One Sigma, two-thirds of
whatever is being measured falls within the curve. Two Sigma covers about 95 percent.
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At Six Sigma, you’re about as close to defect-free as you can get. It’s an ambitious
quality goal! Although it’s an extremely high standard to achieve, many quality-driven
businesses are using it and benefiting from it. For instance, General Electric estimates that
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it has saved billions since 1995 by using Six Sigma, according to company executives.
Other examples of companies pursuing Six Sigma include ITT Industries, Dow Chemical,
3M Company, American Express, Sony Corporation, Nokia Corporation, and Johnson &
Johnson. Although manufacturers seem to make up the bulk of Six Sigma users, service
companies such as financial institutions, retailers, and health-care organizations are begin-
ning to apply it. What impact can Six Sigma have? Let’s look at an example.

It used to take Wellmark Blue Cross and Blue Shield, a managed-care health-care com-
pany, 65 days or more to add a new doctor to its medical plans. Thanks to Six Sigma, the
company discovered that half the processes they used were redundant. With those unneces-
sary steps gone, the job now gets done in 30 days or less and with reduced staff. The company
also has been able to reduce its administrative expenses by $3 million per year, an amount
passed on to consumers through lower health premiums. 54
Although it’s important for managers to recognize that many positive benefits come
from obtaining ISO 9000 certification or Six Sigma, the key benefit comes from the quality
improvement journey itself. In other words, the goal of quality certification should be having
work processes and an operations system in place that enable organizations to meet custom-
Project management in the music industry in- ers’ needs and employees to perform their jobs in a consistently high-quality way.
cludes concert tours by artists such as coun-
try music singer Kenny Chesney. Managing
a tour involves coordinating the timeline,
activities, accommodations, and transporta- 3 How Are Projects Managed?
tion for the musicians and crew members in As we discussed in Chapter 6, many organizations are structured around projects. A project is
different cities and performance venues from
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the first to the last concert date. a one-time-only set of activities with a definite beginning and ending point. Projects vary in
size and scope, from a NASA space shuttle launch to
a wedding. Project management is the task of get-
ting the activities done on time, within budget, and
according to specifications.
Project management has actually been around
for a long time in industries such as construction
and movie making, but now it has expanded into
almost every type of business. What explains the
growing popularity of project management? It fits
well with a dynamic environment and the need
for flexibility and rapid response. Organizations
are increasingly undertaking projects that are
somewhat unusual or unique, have specific dead-
lines, contain complex interrelated tasks requiring
specialized skills, and are temporary in nature.
These types of projects don’t lend themselves
well to the standardized operating procedures
that guide routine and continuous organizational
activities. 56
Eric Henderson/Reuters/Landov