John Smithers - about a Six Sigma Quality Program in Sigtek

1. John Smithers- about a Six Sigma Quality Program in Sigtek Fong Kit Ling, Catherine Lee, King Ng Lai Wah, Kanas Sin Wai Yu, Cortina Wong Kit Lee, Tammy

2. Agenda • Background & Approach to Change • Barriers & Drivers of Change • Was John Smithers Effective? • What can be done differently? • Success Case of Quality Initiative: J&J

3. Background • Sigtek manufactured signal handling equipment • Growth after 1997 during Internet boom • Industry stockpiling in 1999 & serious market competition; sales & workforce tumbled • 2001 Telwork bought Sigtek; Formulate a Six Sigma Quality program to all its subsidiary • Smithers was chosen as instructor for Six Sigma Quality Program

4. Approach to Change • Top-down from Telwork to set Six Sigma for subsidiary • Communicate the change through training • Trainers selected from Engineering & Operations in Sigtek • Motivate the staff with the trainers’ enthusiasm & workers’ intrinsic motive to improve

5. Feb Telwork formulated Six Sigma Quality Program May & June Smithers and Murphy joined other instructors from Telwork’s other subsidiaries for three weeks of training Sept Telwork sent corporate trainers to Sigtek to present the Six Sigma to senior & middle managers Sept - Nov Smithers & Murphy conducted training to Sigtek employees Nov Telwork orchestrated a major management change, Operations Patricof won the power struggle; Smithers may lose job, his boss was demoted Chronology of change process

6. Drivers of Change • Serious competition to cause Sigtek business tumbled to $400 million with workforce trimmed to 800 (from 1000) in 1999 • A command from new parent Company (Telwork) to bring the Six Sigma Quality program to all its subsidiaries • Enthusiastic trainers & comprehensive training programs

7. Barriers of Change Sigtek was Loosely Coupled • Political lens: extreme polarity that existed between Engineering & Manufacturing Operations • Cultural lens: Sigtek was bureaucratic Instead of getting actively involved in the implementation of the program, the team wastes time on inconsequential bureaucratic decisions

8. Barriers of Change • Strategic lens: No strategic alignment • Telwork hoped to use Six Sigma Program to gather all of the scattered and diverse companies • Senior & middle managers (as agents & recipients of change) did not understand the rationale behind running the Six Sigma Program • Most people were unaware of the existence of the site Quality Team, which coordinated Six Sigma efforts at facilities

9. Was Smithers Effective ? • Goals of the Six Sigma Quality Program • Improve product quality • Encourage better management practices • Gather all the scattered & diverse • companies acquired under Telwork Role of Smithers: Site instructor • Instructor Responsibilities: • A belief in a new system of management • & a new work environment • Mobilize the workforce in order to make change & solve problems

10. Smithers can do differently… • Create some successful stories at the beginning by high personal involvement & top management support. • Request for a few more assistant instructors to facilitate the implementation of change in different work groups. • Propose to Patricof to align an incentive program/ performance appraisal with the Six Sigma Quality Program.

11. Sigtek can do differently… • Strategic fit • Appoint a leader with vision to change (Patricof did not have intrinsic quality initiative) • Align quality initiative with incentive system, both pay incentive and management recognition • Set up central quality consultancy team to help implementation to overcome bureaucracy • Don’t rush. Allow time to understand, to accept the whole ideas

12. Sigtek can do differently… • Cultural match • Gain buy-in from senior/middle management (agents) before rolling out the program to the line workers (Sigtek was bureaucratic, top-down and middle-down was the key to drive change to bottom) • Align with the informal leaders among the workers to initiate change

13. Sigtek can do differently… • Political coalition • With Patricof being the new GM, take the golden chance to end the power struggle between Engineering & Operations • Restructure key personnel position in Sigtek to enhance cooperation between Engineering and Operations • Empower the middle managers to initiate changes • Extra incentive for cross division projects to promote coalition • Top management promotes using success in Six Sigma to build the reputation of Sigtek within Telworks.

14. Success Case: J&J • Top Management Commitment • Each board member has to certify for at least 1 green belt project e.g. CFO is black belt certified • Each department has to have at least 1 green belt project certified • Included in Annual Appraisal System of individuals and division head • Master Black Belt has to devote 50% of time in relating to 6 sigma programs • Annual Six Sigma plans/ targets in the Strategic plan / Business plan • Set Measurable goals and Certification System • Set criteria of Green / Black / Master Black belt • Start from smaller scale projects • Management sets visions or scope to start annually with but welcome new ideas. • Projects has to be approved before starting • Completion of Projects has to be certified by sponsor • Support and Mentoring System • Official Training of Six Sigma tools • Assign sponsor (who is either black belt or master black belt) to help / assist through out the process of project

15. Success Case: J&J • Reward and Recognition • Incentive in terms of Money • Certificate, Trophy and Hall of Frame • Presentation of Awards in Annual Meeting • Provide chance to present the success to the others • Culture and Attitude Management • For company initiated projects, only the top performers will be selected to hold the project • All Projects need to be approved before start • Completed project needs to be certified by sponsor • White Belt training to education all staffs on the basic concepts and objectives • Cultivate that as personal development (Tools are universally applicable)

16. Question & Answer