Key Points

• Six Sigma is a great fit for startups, provided you temper your expectations accordingly.
• Developing solid metrics goes a long way in establishing your data flow for Six Sigma.
• Getting used to process improvement early will make it second nature for future endeavors.

Is Six Sigma for startups viable? Typically, when we think of Six Sigma, we think of deployments of the methodology across enterprises. Large organizations have been the constant domain of Six Sigma since its development. Now, that isn’t to say that smaller organizations completely forego using Six Sigma principles. My time working with scrappy startups has shown that they are quite willing to get the wheels rolling on adopting frameworks.

Instead, what we’re going to look at today isn’t so much whether Six Sigma for startups is a viable concept. Rather, we will take a closer look at how to implement Six Sigma and set it up to scale with your organization as it grows. No business starts as a titan of industry, but with the right prep work, you can effectively function as one.

What Is Six Sigma?

Six Sigma is a series of quality management techniques that originally was developed by Motorola in the 1980s. It wasn’t until its full-scale deployment at General Electric that the business world was taken by storm by Six Sigma. Its original domain was manufacturing, as if the progenitors of the discipline hadn’t clued you in. Six Sigma was an effective means of reducing costs, increasing quality, and overall leading to greater health and stability for an organization.

Since its wider deployment, Six Sigma has become one of the top ways of improving an organization. Hybrid approaches like Lean Six Sigma and Agile Six Sigma have shown how these techniques can more readily pivot to other industries. At its core, Six Sigma is about leveraging the data in your organization to make better decisions.

These decisions can come in the form of how you construct the processes used to develop your product, or in how you run the business itself. Six Sigma isn’t so much just a toolset, but rather a transformative set of techniques that are readily integrated within any organization you can imagine.

What Industries Suit Six Sigma?

Six Sigma is typically used within manufacturing, but that isn’t the whole picture. While manufacturing gives a broader overview of your organization’s impact, the approach is suited for just about any industry you can imagine. During my time in tech, the IT department and software developers often operated with Agile. However, the rest of the teams and departments leaned heavily toward Six Sigma. This was for managed digital services, rather than any sort of manufacturing position.

To this end, many organizations have adopted Six Sigma that aren’t remotely congruent to the realm of manufacturing. Six Sigma provides the tools and means to improve any business, reduce waste, and ultimately strike a fine balance between quality and cost. It is up to the organization implementing it to how effective these initiatives are.

However, one thing is for certain: Six Sigma isn’t going anywhere. While the business landscape has evolved quite a bit in the five years since the COVID-19 pandemic, we’re seeing a greater saturation of hybrid and pure approaches to Six Sigma implemented in businesses across the world. It might not take the original form as envisioned by Motorola, but there is no denying the efficacy of the tools and approaches contained within the methodology.

Six Sigma for Startups: How to Implement It

Now that we’ve defined Six Sigma and identified the industries best suited for it, it’s time to take a closer look at how to best implement it in a startup context. Startups are tenuous affairs at the best of times, but with the right leadership and tool set can see it through to overall greater success. It doesn’t truly matter what stage of funding you’re on, at least when considering angel investors and venture capital cash infusions.

At the end of the day, the company needs to sustain itself without outside funding. What Six Sigma for startups can do is start laying the foundation for continued success and self-reliance for any organization. However, it is important to recognize that in your early days, it’ll be a matter of picking and choosing the elements that work best for your organization.

Whole cloth adoption of Six Sigma might be fine, but if you’ve got a workforce of a dozen employees not counting the founder, it’s going to be overly cumbersome to effectively use. Instead, this is where you start selecting the tools that work for now, and setting aside the tools that will be a boon for later efforts within your organization.

Identifying the Frameworks

When looking at Six Sigma for startups, it is important to make the two primary frameworks used for any effort in the methodology. These come in the form of DMAIC and DMADV. DMAIC is a process improvement framework and something we’ve covered exhaustively in the past. DMADV is used for the generation of new products or services and is again something we’ve covered at length in the past.

However, it is important to understand both of these frameworks and when to implement them. You wouldn’t use DMAIC to create a new product for your e-commerce business after all. By that same hand, you wouldn’t use DMADV to look into how to improve your current processes. Knowing how to implement either of these frameworks and when is vital.

Six Sigma for startups is a balancing act of taking what works and jettisoning what you can’t use. That said, I would emphasize utilizing these frameworks to their fullest. You’ll find your products have a significant increase in quality when following the best practices for either framework.

Understanding the Benefits

When I’ve talked to startup founders in the past, it is hard to cut past the jargon and the buzzwords. While there might be a strong unifying vision at the core of a startup, cutting past what a founder thinks the layperson should hear is a difficult task. Six Sigma isn’t just something you’ll say you’ll do, after all, but rather a means of controlling the quality of your organization’s output.

To this end, Six Sigma for startups in its most primordial state should be about analyzing why the methodology needs to come to your business. This isn’t just a term to bandy about to your investors, but rather a complete transformative discipline that will change the very fabric of your nascent corporate culture.

As such, understand the benefits of Six Sigma and what it means to your organization. It isn’t going to be a cure-all panacea for what ails your organization. However, it could mean the difference between seeking out additional funding and being able to stand on your own two feet. Do the work, get some of your team certified, and you’ll have a far better standing when it comes to implementing this methodology.

Recognizing the KPIs in Your Organization

We’ve talked in the past about key performance indicators. Identifying what counts as a KPI in your organization is going to go a long way toward guaranteeing the success of your organization, however. This isn’t a metric to take lightly, especially when considering Six Sigma for startups. Instead, this is one of the most vital data points you can actively measure in your business.

Identifying areas where you can establish KPIs is going to be difficult, especially if you don’t have conventional goods as your source of income. However, I’ve got faith that practitioners of Six Sigma in startups understand what it means to take a moment and read the numbers.

You’re going to have all sorts of data flowing in, make sure your output is converted to a justifiable and quantifiable metric. This will help you aim for the vaunted Six Sigma quality while also giving you data points to collate as your company progresses and expands.

Constructing Your Process Improvement Cycles

When you’re just starting, it can seem somewhat self-defeating to think about improving your processes. Startups are essentially just finding their footing, securing funding, and hopefully striving toward something more than their current status quo. However, getting the ball rolling on your process improvement cycle is going to pay off sooner rather than later.

Iterative product development like Agile doesn’t necessarily have to concern itself with process improvement cycles. Learning how to best utilize DMAIC and establishing your operational procedures for process improvement is going to pay off in a big way as your company grows.

As such, get the legwork started now, and worry about the particulars later on. Having good procedures in place will make the notion of change far less difficult to swallow for your current staff and set a precedent when you have a larger workforce at your disposal.

The Limitations of Six Sigma in Startups

Often, the limitations of an approach escape us when we dream of what it can do for our current standing. However, the limitations of Six Sigma become readily apparent when looking at it from the perspective of someone in leadership at a startup. Six Sigma leans heavily on historical data, which will drive much of how you view and undergo process improvement.

This lack of data is going to go quite a way in dictating how you process and interpret current events. As such, the early days of using Six Sigma for startups are going to be more akin to groping in the dark than adhering to a tried and tested method of improvement and cost reduction. That isn’t to say this is a fool’s errand, however, you just need to tough out the early days.

The lack of data can benefit your organization in the long run, as it’ll clue your data analysts into what metrics are the most important to gather as you progress. Further, it’ll help you develop what metrics truly matter when starting up your DMAIC and DMADV initiatives. This is also the perfect time to familiarize your staff with the likes of the QC tools and other useful mechanisms that find frequent usage in Six Sigma.

Other Useful Tools and Concepts

Still hungry for more? Of course, you are, and we’ve got just what you need. You might want to take a closer look at what design thinking is and how it benefits your organization in terms of innovation. This novel method of designing products is catching on in a big way and you’ll want to be on the cutting edge.

Additionally, you might want to take a closer look at the future of Six Sigma. Very few of the approaches we cover here are static entities, but rather evolving with the times to stay relevant and useful.

Conclusion

So, is Six Sigma for startups viable? It certainly is, but it requires the business to set its expectations naturally. Expecting to leverage the sort of power that a conglomerate like General Electric can wield is going to result in frustration. Scale your expectations and Six Sigma will grow with your organization.

The image featured at the top of this post is ©Tint Media/Shutterstock.com.