How Startups Can Benefit from Six Sigma

Six Sigma is a well-established methodology that traces its origins to Motorola. The approach is centered on continuous improvements to reduce defects in processes and ultimately improve productivity, business revenue, and customer satisfaction levels.

While most leaders typically think of Six Sigma as an approach businesses adopt when they’re facing critical problems, anyone from Fortune 500 businesses to startups can leverage Six Sigma principles to improve their processes.

Continuous Improvement

At the heart of the Six Sigma strategy is continuous improvement. The methodology helps identify defects and proposes ways to correct them to improve productivity. 

Six Sigma employs the Define, Measure, Analyze, Improve, and Control strategy, which is data-driven, to identify scope for improvement and sustain the improvements moving forward. The approach harnesses data collected from across touchpoints to establish baselines and work on improving processes. Six Sigma is based on the foundations of statistical analysis and draws upon these principles to reduce variability.

Increase Revenue

Six Sigma ultimately helps small businesses grow and bolster their profits. Six Sigma and Lean Six Sigma approaches systematically work to remove process roadblocks and cut down on waste to ensure resources are efficiently utilized. 

This translates to reduced production times and improved customer satisfaction levels. The end result is higher revenue for the business. Customer retention also sees a boost, which again results in greater profits.

Reduce Costs

Startups often already struggle with expenditures that quickly rise if left unchecked. It’s imperative to keep costs under control using innovative ways. 

Six Sigma reduces defects and wastes, which are process inefficiencies that consume resources, incurring costs for businesses, but don’t yield business value. Overproduction also counts as waste and Six sigma helps combat that too. Implementing Six Sigma methods eliminates such wastes which automatically reduces expenses.

Improve Efficiency

One of the main reasons for the widespread success of Six Sigma is its focus on identifying the root cause of defects and wastes. The approach reduces variability and works on the underlying causes of such variability. 

Six Sigma can also do away with unnecessary processes and reduce distractions, which directly improves productivity manifold.

Design Innovative Products

Six Sigma also employs the DMADV paradigm, which incorporates the Define, Measure, Analyze, Design, and Verify phases. This approach can be used to understand customer requirements and design new products and services which can contribute greater business value. 

While the DMAIC approach works for already existing processes, DMADV focuses on creating pioneering new products and services that can differentiate a business from its competitors.

Understand the Voice of the Customer

Six Sigma always begins with a clear understanding of the problem at hand and the requirements of the end users of a product or service — the customers. It carefully captures and analyzes the voice of the customer, which includes the feedback of customers to constantly improve existing designs and create newer ones to address consumer-facing issues in a proactive manner. 

Customer satisfaction is important for any business and startups are no different. In fact, startups that focus on customer experience can often set themselves apart from the competition with their distinguished offerings. The result is a greater market share and increased revenue.

Ensure Employee Satisfaction

An organization’s employees are its most important resource. Six Sigma can increase transparency and accountability for employees, creating stronger team functions. The methodology promotes a sense of ownership among the workforce and inspires them to deliver their best for the organization.

Six Sigma can also drive incentives for employees which further improves productivity and employee satisfaction. 

Wrap Up

Six Sigma can be an indispensable tool for startups and small and medium businesses aiming to carve a niche for themselves in this highly dynamic world. The methodology can help closely understand evolving customer requirements and improve products and services to better meet customers’ needs. New products and services can also be created to fulfill voids and surpass customer expectations.

Six Sigma also helps cut down on costs which can be a major blessing for companies with bootstrapped budgets. Ultimately, startups can harness Six Sigma as an essential part of their toolkit to constantly innovate and set new standards for themselves, no matter which industry they operate in and which specific challenges they face on a day-to-day basis.