Abstract

Much has been written about General Electric's Six Sigma experience, frequently more fiction than fact. A firsthand account from a Black Belt involved in GE's Six Sigma effort from the beginning sets the record straight. In September 1995 GE CEO Jack Welch announced that the Six Sigma initiative would be the company's top priority for the next five years. Within weeks Master Black Belt training began with the major focus on improvement of manufacturing processes. Each business within GE began its own initiative. The net payoff from Six Sigma in 1996 was negative because of significant start-up costs. This changed in 1997 when each business was held accountable for its Six Sigma results. Also in 1997, GE switched its focus from manufacturing processes to three other initiatives: commercial quality applications, the creation of Green Belts, and Design for Six Sigma. This was done to include the many facets of GE enterprises not directly associated with manufacturing. In 1998 customer feedback caused the company once again to change the focus to more direct customer issues, while at the same time placing emphasis on reducing variation in product delivery processes. During the dotcom rage of 1999 GE pushed Web based business and internal digitization. The focus in 2000 was on making Six Sigma work for customers and in institutionalizing it into GE culture. In 2001, Jeff Immelt, Jack Welch's successor as CEO, announced a reinvigoration of Six Sigma to include a higher percentage of senior executives, customer service projects, and standardization of Black Belt course material and certification criteria. A sidebar article lists 20 ways to apply Six Sigma to finance.