The Right Way to Start a Lean Six Sigma Project

And How to avoid failure ...

Over the next four articles, we’ll examine how organizations can select Lean Six Sigma projects that actually matter to your business.

The first article establishes why project selection requires strategic foundation, understanding your business priorities and cost structure before you look at any specific problems.

The second walks you through the practical frameworks and tools for evaluating and prioritizing potential projects once that foundation exists.

The third addresses how to scope projects properly and build in sustainability from the beginning, not as an afterthought.

The fourth takes a different angle, focusing on what someone brand new to Six Sigma—or introducing improvement initiatives to a company he or she just joined—should do for their first project when the comprehensive approaches far from reality.

Now, let’s set the scene for the first one …

The Foundation

The training always ends the same way.

Twelve weeks of instruction. Hypothesis testing, control charts, process capability analysis. The Black Belts have filled notebooks. They’ve passed the exam. And now, on the last day, the instructor tells them to go back to their departments and find problems to fix.

Find problems. As if the hard part were finding them.

What happens next is predictable. One Black Belt picks the project she knows she can finish fast – something small, something contained, something that will look good on her performance review in six months. Another picks the thing that’s been annoying him for years, the broken process he’s complained about in meetings. A third asks his boss what to work on and gets a vague gesture toward “that inventory issue.”

Six months later, half the projects are abandoned. The ones that finished delivered results no one can trace to the bottom line. Management looks at the invoice for all that training and wonders what they bought.

This pattern repeats in company after company, industry after industry. And every time, the diagnosis is the same: the methodology didn’t work. The tools didn’t fit. Six Sigma isn’t right for our culture.

But the methodology isn’t the problem. The tools work fine. The problem is simpler and more damaging: nobody connected the improvement work to what the business actually needed to accomplish. You can execute DMAIC with textbook precision and still waste everyone’s time.

If you’re working on the wrong thing, excellence in execution only means you’ll get there faster.

Two Companies

In the early 2000s, two manufacturing companies faced the same mandate from their boards: reduce operating costs by 10 percent.

At the first company – call it Company X – the executives did what executives usually do. They looked at their budgets. They identified line items that could shrink. They came back to the CEO with sixty ideas:

eliminate the quality audits, switch to cheaper suppliers, cut headcount in customer service, reduce R&D spending by 15 percent.

The arithmetic worked. Costs dropped. The executives received their bonuses.

But something else happened too. Customer complaints rose. The cheaper suppliers delivered cheaper quality. Without the quality audits, defects that used to get caught at inspection started reaching customers. The customer service team, now understaffed, couldn’t keep up with the calls. Response times stretched. Frustration mounted – among customers, among the remaining employees who absorbed the extra workload, among the managers trying to hold things together with fewer resources.

Within eighteen months, the company was spending more than it had saved. They had treated cost reduction like a math problem – subtract here, subtract there, watch the number fall. They never asked where the waste actually lived.

At Company Y, someone asked a different question.

Instead of looking at what they could cut, they looked at what they were spending because something wasn’t working. They documented every cost that existed only because a process had failed somewhere.

Late deliveries that required credits to angry customers. Billing errors that took hours to untangle. Scrap and rework on the production floor. Mistakes in accounts payable that meant paying invoices twice. Premium freight charges to make up for missed production schedules.

When finance added up these costs – what quality professionals call the Cost of Poor Quality – the number surprised everyone in the room. Fifteen percent of total costs. In some areas, closer to twenty-five.

That number became the target. Not arbitrary cuts, but specific failures. Fix the process that creates late deliveries, and the credits disappear. Fix the production process that generates scrap, and the material costs drop and throughput rises. Fix accounts payable, and you stop paying vendors twice.

Company Y didn’t reduce costs by cutting. They reduced costs by fixing. And when you fix the root cause, you don’t just save money. You make customers happier. You make work easier for your people. You build capability instead of destroying it.

The difference between these two companies wasn’t effort. It wasn’t intelligence. It wasn’t commitment. It was strategy. Company Y understood what they were really trying to fix before they selected a single project.

The Iceberg

If you’ve ever seen a diagram of an iceberg, you know the principle: most of the mass sits below the waterline, invisible from the surface.

Quality costs work the same way.

The visible costs are the ones everyone tracks. Scrap. Rework. Warranty claims. Customer returns. In most organizations, these run about four or five percent of sales. Finance knows these numbers. Operations reviews them monthly. They appear on dashboards and in board presentations.

But below the waterline, hidden from the reports, sit the larger costs.

Excessive overtime to fix problems that shouldn’t have happened. Premium freight to make up for delays. Planning bottlenecks that push schedules back.

Excess inventory held as a buffer against unreliable processes – inventory that ties up cash and takes up space and sometimes spoils before it’s ever used. The hours spent handling complaints. The expediting costs when the normal process breaks down and someone has to work the weekend to get the shipment out.

These hidden costs don’t appear on any single line item. They’re scattered across budgets, buried in overhead, absorbed into the baseline. But add them up – really add them up – and they often reach ten to twenty percent of sales. Sometimes more.

This is where the opportunity lives. And this is where your project pipeline should come from.

Not because financial returns are the only thing that matters. But because these costs tell you something. They’re signals. Every dollar you spend because something doesn’t work right is a finger pointing at a broken process. Follow the money, and you’ll find the problems worth solving.

The Foundation That Most Programs Skip

Open any Six Sigma textbook to the chapter on project selection, and you’ll find scoring matrices. Criteria lists. Weighted rankings. Impact-versus-effort grids.

These tools are useful. But they assume you’ve already done something that most organizations skip: the foundational work that makes intelligent selection possible.

Before you can select projects, you need to understand four things.

First: The Strategic Plan.

Not the poster on the wall. Not the vision statement with words like “excellence” and “innovation” that could apply to any company in any industry. The actual strategic plan – the one with gap analysis, action plans, quantifiable performance targets.

What gaps exist between where the organization performs today and where it needs to perform? What initiatives are underway to close those gaps? What’s standing in the way?

Your improvement projects should connect directly to these strategic gaps. If they don’t, you’re running a parallel program – one that might deliver results, might keep people busy, but may or may not help the business achieve what it needs to achieve.

Second: Your Competitive Position.

A business unit with a strong position in a growing market faces different challenges than one with a weak position in a declining market.

The strong player can afford to focus on speed. Product development. Getting to market faster than competitors. The weak player probably needs to focus somewhere else entirely – cost structure, operational efficiency, survival.

There’s no universal answer to what kind of improvement work matters most. It depends on where you sit. And if you don’t understand where you sit, you’ll select projects based on internal logic – what seems broken, what’s visible, what someone complained about – instead of external reality.

Third: How Goals Cascade.

In well-run organizations, there’s a traceable line from corporate strategy to business unit objectives to departmental goals to individual performance targets.

Strategic goal: grow market share by two points. Business unit objective: launch three new products by Q3. Departmental goal: reduce development cycle time by 15 percent. Process target: cut prototype approval from six weeks to three.

That process target – prototype approval time – is where a project lives. But you can only find it if you’ve traced the cascade from the top.

Without this system, you end up with projects that deliver results nobody connects to anything. The project team celebrates. Leadership shrugs. The disconnect breeds cynicism, and cynicism kills the next project before it starts.

Fourth: Your Core Processes.

Every business runs on a set of major processes. Order to cash. Procure to pay. Hire to retire. These are the big ones – the Level 1 processes that correspond to business functions and have accounting traceability.

Below these sit the Level 2 processes: the subprocesses with distinct sequences of work steps. Receiving. Invoice processing. Onboarding. Pick and pack.

A typical improvement project addresses work steps within one or more Level 2 processes. If you don’t have this map, you can’t scope projects properly. You won’t know where one process ends and another begins. You’ll either tackle something too big to finish or something too small to matter.

These four prerequisites take time. They feel abstract. They don’t produce the immediate satisfaction of launching a project and watching a team get to work.

But they’re not optional. Skip this foundation, and you’ll end up where most organizations end up: a portfolio of projects that are technically successful but strategically irrelevant. A lot of activity. Not much progress.

What Failure Looks Like

A billion-dollar chemical company decided to try Six Sigma. The CEO was curious. Senior management was skeptical. They agreed to pilot the methodology at a single plant – if it worked, they’d expand.

Already you can see the problem. A pilot built on skepticism. A test designed by people who expected it to fail.

The problems multiplied from there.

The criteria for selecting projects were never made clear. Finance wasn’t involved in picking projects or validating the expected savings. When it came time to choose project leaders, they didn’t pick their best people – they picked whoever was available. After training, these project leaders were told to keep doing their regular jobs. Lead the improvement work on the side. Fit it in between your other responsibilities.

For nine months, site managers reviewed the projects exactly once. Senior management didn’t review them at all.

After nine months, one project had been completed. One.

Management reached their conclusion: Six Sigma doesn’t fit our company.

They were wrong about the diagnosis. But they were right that something had failed. What failed wasn’t the methodology. What failed was everything that has to be in place before the methodology can work.

Unclear criteria. No financial partnership. Second-string talent. Insufficient oversight. No plan for sustaining whatever gains emerged. These aren’t project-level problems. They’re strategic-level problems. They happen before you select anything. You can have perfect selection criteria, but if leadership isn’t committed and the organizational systems aren’t in place, your projects will struggle.

And when they struggle, the conclusion is always the same: the tools didn’t work.

The tools weren’t the problem. The tools were never given a chance.

The Shift

Anyone can walk through a factory, an office, a warehouse, and find dozens of things that could be improved. That’s not the hard part. The hard part isn’t finding problems.

The hard part is finding the right problems.

The shift is this: from “what problems can I see?” to “what problems, if solved, would close our strategic gaps and improve our competitive position?”

This shift requires everything we’ve discussed. You need to understand your strategic plan so you know what gaps matter. You need to understand your competitive position so you know what improvement work is worth the investment. You need to understand your cascading goals so you can connect projects to business objectives. You need to understand your core processes so you know where projects should focus.

Once this foundation is in place, project selection becomes something different. You’re not searching blindly. You’re not hoping you picked the right thing. You’re targeting specific opportunities that matter: to leadership, to the business, to the strategy.

Most organizations want to skip the foundation. It takes time. It feels abstract. It doesn’t have the energy of a kickoff meeting or the satisfaction of a completed tollgate review.

But every organization that sustains real improvement over time has done this work. They’ve connected improvement to strategy.

That connection is what separates programs that transform businesses from programs that just keep people busy.

Next Week

Next, we’ll cover the tools and frameworks for strategic project selection.

How do you map Cost of Poor Quality? What does a process hierarchy look like? How do you build scoring criteria that distinguish valuable projects from appealing ones?

We’ll move from theory to practice – from understanding why foundation matters to building it in your organization.

Because once you know what to fix, the next question is: how do you systematically find it?

Best,

Mohammad Elshahat

EMEA Operational Excellence Consultant

Creator of The OpEx Playbook