SIX SIGMA SPOTLIGHT MARCH, 2005 ELLEN BOVARNICK VICE PRESIDENT, CORPORATE BUSINESS EXCELLENCE THE COCA-COLA COMPANY Six Sigma SpotLight is a regular feature of the e-Zsigma newsletter, and allows us to introduce one of the global six sigma community's superstars.   Ellen Bovarnick joined The Coca-Cola Company in Atlanta in 2001.   As the vice president of Business Process Excellence, she leads the Company’s development and implementation of business excellence initiatives world-wide, based on six sigma methodologies.   She brings to this role extensive management experience in designing and implementing processes to enhance servicing customer requirements, focusing operations on accomplishing business strategies, driving accountability, and achieving results.  Prior to joining Coca-Cola, Ellen created and led the deployment of Six Sigma systems and methodologies as the vice president - Six Sigma for the Aerospace Division of Honeywell International, and the senior vice president - Six Sigma Quality at GE Capital Mortgage Corporation.   For the past 20 years, Ms. Bovarnick has continued to develop and deploy the six sigma tools and methodologies she mastered as part of the original team of employees at Florida Power & Light that successfully led that company to win the Deming Prize in 1989.  She has coached hundreds of teams through the six sigma tools and methodologies and guided leadership teams in leading and organizing their six sigma efforts.  In 1998 one of her teams won the Rochester Institute of Technology/USA Today Quality Cup for service organizations.   Ellen is a licensed attorney, CPA and certified internal auditor. Ellen holds a JD from the University of Denver - College of Law as well as both a MBA and BSBA from Boston University School of Management. She also holds a patent and a copyright for her 6 Sigma Systems and materials.   Having met Ellen for the first time in Miami, at the recent IQPC Annual Six Sigma Summit where her teams won two IQPC Six Sigma Awards, we were delighted when she accepted our invitation to be a part of our Six Sigma Spotlight.   1.  NEWS:  In the presentation you gave at the IQPC Six Sigma Annual Summit in January, one phrase that jumped out at me on one of the slides was, "The Coca-Cola Company is truly a global company, not simply a US company doing business globally".  Can you share with us what this means in terms of your business culture, products and supporting processes?  How does this differentiate the Coca-Cola Company from other companies with a similar global footprint?   ELLEN:  I think the primary differentiation can be made in that we do have hundreds of business cultures that co-exist around the globe… As was the case when I was with General Electric, each of The Coca-Cola Company businesses has a slightly different culture which is often dependent on the local leadership, and further influenced by the business focus within the respective operating units.  This, in conjunction with the real cultural diversities presented by each country and its population drives both subtle as well as often glaring differences that must be taken into consideration when managing an organization as vast as The Coca-Cola Company.  This is what is meant when suggesting that we are truly a global company, and not simply a US company doing business globally.   2.  NEWS:  Coca-Cola, the product, was first introduced in 1886 with a daily revenue of 45 cents.  Today, the Coca-Cola Company operates in over 200 countries, owns the world's most recognized trademark, employs 49,000 people, features 400 brands, and is a Fortune 100 company with USD$21 billion in annual revenue!  Process and product management must have been essential for that profitable growth.  What is the burning platform at The Coca-Cola Company that is often identified as a critical to success factor for the introduction or revitalization of business excellence strategies?  Perhaps a better question... IS there a burning platform?   ELLEN:  The burning platform today would be execution.  The Coca-Cola Company is really a marketing company when we think about the product line and innovation, but how we manage the value chain, from the suppliers all the way through to the end consumer is all about execution.  When growth is good or profits are high, execution can sometimes be overlooked… you can recover (from mistakes) heroically, and still do well.  In lean or scarce resource times, execution becomes your burning platform.  This could be said for any business and The Coca-Cola Company is no different. The urgency today is about execution.   3.  NEWS:  During your presentation, you mentioned "Six Sigma" several times, both in the context of The Coca-Cola Company, as well as in terms of other companies you have worked with in the past.  However, in the presentation documents, I can find only one indirect reference to Six Sigma, and that is the improvement methodology that is being used: DMAIC (Define, Measure, Analyze, Improve, Control) and DMADV (Define, Measure, Analyze, Design, Verify).  With your leadership history in firms formally pursuing Six Sigma strategies, does this indicate a significant difference in the approach you are taking at The Coca-Cola Company?  If we spoke to your leadership team at Coca-Cola about Six Sigma, what would be their response?  How, if at all, does it fit on the leadership radar, or is it there but under a different label?   ELLEN:  It exists under the label of execution…. additionally, you would find it supporting accountability as well as business culture transformation.  It is a way to help the company be different, and it drives certain positive behaviors.  In our method of implementing Six Sigma, we are building capability… not necessarily “DNA” as has been the case with other companies like Caterpillar, DuPont or GE… but capability to help deliver on the execution platform I mentioned earlier.    If you asked 24 people what Six Sigma means, you will get 48 different answers, so I personally don’t believe that saying “Six Sigma” means very much unless you are referring specifically to the 3.4 defects per million opportunities (DPMO), and even then, some people will tell you that’s 4.5 Sigma!  For some people, it’s a metric, goals and attitudes… it’s a vision… all sorts of things.  At The Coca-Cola Company, we are implementing Six Sigma under the heading of Business Process Excellence, a complete program to help run the business.  This differs from the approach many companies are taking, where these firms are narrowly implementing Six Sigma today in manufacturing, and do not see it as a way to run and manage the entire business – merely a tool to improve a process or an operation.  We look at it much more as a way to connect the business parts with one another – that is an important element.    Our model includes three major components: The focus on the key indicators of the business, understanding and aligning the business processes and measuring them from a customer perspective, and finally, driving improvements through the rigorous application of the DMAIC (Define, Measure, Analyze, Improve & Control)  improvement methodology or the DMADV (Define, Measure, Analyze, Design, & Validate) (re-)design methodology.  By the way, we include lean techniques in here as well.  We are making sure that everyone has the tools and the methodology to solve problems – including the statistical rigor that was missing from the TQM approach of the 80’s – whether they are engineering or analytically-oriented people who find this approach to be a very natural fit, or those who find this approach to be quite new, if not foreign… They all share a common framework to approach problem-solving.   4.  NEWS:  You presented that, "After 114 years, the company changes from central to local control...'Think local, Act local'"... "No longer about one visionary leader... it’s about creating a team that's as good as the brand".  Given Coca-Cola's sheer mass, this suggests an enormous cultural as well as process change.  What role do you see your team playing in this massive change, and what can the consumers as well as shareholders expect to see from this change?  What are the risks associated with this, and what are the upside benefits that are driving the change?   ELLEN:  The role I see my team playing is really three-fold, centered around a service model.  Firstly, our goal is to build the capability by providing Six Sigma training and coaching to the organization.  Most importantly, it’s not about merely training people, but developing skill sets through repeated application of the tools and techniques by the people who do the work everyday.  We do not provide an army of black belts to the business.   However, it is not just about teams making improvements.  Leaders also have a new role and if they don’t understand what that is – if they can’t get out of the firefighting mode and learn how to lead in Business Process Excellence (BPE) – then nothing will really change.  Therefore, we have an additional role in guiding and coaching leaders in how they can better manage under this new effort.   Thirdly, we also have a responsibility for the design of the (BPE) model.  There are a lot of companies that have implemented Six Sigma separate from Lean – there are some companies who have just begun to introduce DMADV (Define, Measure, Analyze, Design, Verify)… my group, in particular, is responsible for the design of this program so that all of the members of this company, across all of those 200 countries and different sub-cultures, can speak to one another in a common language.  The one thing we can not afford to happen is getting different approaches or responses depending on which consultant or school provided advice– we’re here to ensure that the company has a single, unified framework in which to operate.   With regards to the risks associated with this effort… there are always risks.  Part of the challenge for all leaders adopting a Six Sigma approach, is that it is very difficult for leaders who have been promoted because of who they were, and how they approached the situation historically . . . to accept that there is another way and now they must learn it – if your culture is not one of a learning organization, but one that expects you to be all-knowing – it is a very difficult change.  The risk is that they will not be able to make that mindset shift… They won’t give themselves or their employees the license or ability to say we are all in this together and we are all going to learn and go together.  If the company can pull that off, it will be one of the most powerful leveraging opportunities the company has.  Nobody expects the leaders to know Six Sigma… they know that… the employees know that – this is their opportunity to take a model and use it to show that we are all learning together.  There’s a risk if they can’t do it, but it’s a great opportunity if they can.  When you are truly a learning organization and when you use these kinds of opportunities as a way to grow, hold yourself accountable but learn from your mistakes and make improvements, it is very powerful.   5.  NEWS:  Many companies that have adopted Six Sigma-type process management strategies have also looked towards similar improvements in their supply chain partners as process variation becomes more visible, and tools and techniques to reduce and better manage this more sophisticated.  Is Coca-Cola at this time involving its supply chain partners in this chapter in your business excellence journey?  As Jack Welch said over two years ago at the ISSSP Leadership Conference in Arizona, the next step for Six Sigma is the supply chain... Is that the case for The Coca-Cola Company, and if so, how?   ELLEN:  The answer, of course, is yes… no company is an island.  I said from the outset that it’s about connecting the parts with the whole.  It is larger than the supply chain… its is really the value chain, as described in the SIPOC (Supplier, Input, Process, Output, Customer) model, where it goes from your supplier or your supplier’s supplier through to your customer and, ultimately, the end consumer.  We could and would include all aspects of that.  Some of our suppliers, in fact, are ahead of the curve, in that they have been implementing Six Sigma even before we got started in it.  Others are not there yet.  A number of our retail customers are just now starting to dip their toe in the water.  In every hand-off in the value chain, there is the opportunity for a breakdown.  You can often do a very good job in your own silo, but it’s when you cross the silos that you begin to have a problem… especially if you don’t have visibility and perspective on the needs of the next process or user, and the defects and variation that result.  By looking at the value chain as an end-to-end process, you don’t have the “silo” of the supply chain – you have the true end-to-end view.  What does the paying customer need and want, and how do we fulfill that.  For us, there would be no part that could be left untouched by what we are doing.  Having said that, we are still in our infancy – we have a lot of work to do in our own house first – our own processes are not working as well as they should.  It would be fairly arrogant to go to the supply chain and demand that they improve when we may be part of the roadblock.  It’s about understanding where the most valuable leverage is, and then working there – whether it be in the supply chain or our own processes or both.   6.  NEWS:  At the IQPC Six Sigma Annual Summit in January, the Coca-Cola team was awarded first place in two of the four categories for best projects, beating out some very stiff competition.  To what do you attribute this success, and what does this recognition mean for your team at Coca-Cola and the company in general?   ELLEN:  I attribute the success to the model that we have chosen to implement, the rigor with which we apply it, and the enthusiasm and energy of the employees that have been our early adopters who have chosen this as their means of driving the results of the business.  Everything is a system, and all parts of the system have to work.  It would have been pointless to have a good model but no one adopted it… pointless to have enthused and energized employees if there wasn’t something for them to implement.  The recognition was very significant for my team… having that external confirmation that what we’ve been working on for the past two and one half years is recognizably a step above some of those companies who have been doing this for many more years.  You always like to know where you stand relative to where others are in terms of best in class.  This allows us to know where we did well as well as where we can improve.   It has also allowed the company to know how well we have done… We’ve achieved what we have with early-adopters.  For some who may have been on the fence, I think this recognition allows them consider that there is something here worth investigating.   7.  NEWS:  I would suspect you have two camps at The Coca-Cola Company - one fixated on religiously maintaining global standards in both processes, and more importantly, products.  The Six Sigma approach to process management is obviously well-suited for this task.  The other camp, I would suspect, is the innovators... people coming up with the ideas that generate new opportunity and growth.  What do the Six Sigma tools and methods that you are championing at The Coca-Cola Company offer this very different camp?   ELLEN:  We have someone in the innovation group who is leading the company’s work in designing innovative experiences at the consumer level, and they tried our Six Sigma BPE on for size.  What they found is that the tools are fabulous at helping them be more creative by taking the repetitive and administrative work that they need to have in support of their creativity, and make it work flawlessly.  The group was experiencing a drain on their innovative time, their creativity, freedom and flexibility since other parts of the process were not working.  When they evaluated and investigated these supporting processes using DMAIC, to see what was and was not working, they uncovered three root causes that fundamentally changed how they deal with their internal customer to get to that true consumer experience.  They have saved a lot of time by eliminating rework from not having clear agreements with the groups that they were serving, and truly understanding their client’s objectives.  Six Sigma speaks very well to freeing up and allowing those who like and need to be innovative, to be just that.   Keep in mind, Six Sigma is not about changing the fundamentals of what somebody’s job is – to do your job for you.  But, it makes the process of doing the job you have to do that much better.   8.  NEWS:  You have mentioned that the Business Process Excellence approach with Six Sigma at The Coca-Cola Company is different and it is that difference that is driving the success that you are seeing.  Can you explain how your model at Coca-Cola is different – what is it that may set you apart from so many other firms pursuing Six Sigma strategies?   ELLEN:  Our model at The Coca-Cola Company is somewhat different… it is more holistic and systemic.  As I have been talking with other companies that are “doing” Six Sigma, they are referring to doing projects for improvement in manufacturing or in the transactional services they offer.  Our model is not just about the project – it’s about running the business by making sure you are focused on what the business needs to accomplish – understand the business gaps – not just process breakdowns, since not all process breakdowns are equal, and it is important to prioritize what will  bring value to the business.  For example, you want to avoid working on eliminating non-value added time that doesn’t actually reach the bottom line when there are other projects where the gaps impact the bottom line.  It is more important to understand how to prioritize your improvements to drive business results.  If we forget that, then we risk losing the value-proposition for Six Sigma, and that is a very important linkage for us.    This is really about leadership… even when you have top-down leadership saying they want to do this thing called Six Sigma, the real business results come from the mandate created from that leadership vision.  Someone asked me the other day if we, in the global Six Sigma community, run the risk of diluting Six Sigma as a brand?  I think we have already done some of that.  We are now using the term like we did with TQM.  TQM in the 1980’s meant many different things.  On one level,  it meant quality circles, which translated into teams running around doing things in a company, typically without even a methodology to follow.  It’s not surprising, then, when CEOs would say, “I don’t understand it.  I’ve been doing all these quality circles and I’m not getting any better business results. Obviously, TQM doesn’t work!”  Well, it was never just about quality circles… If they aren’t aligned with your business needs and you don’t understand what drives your business and you haven’t prioritized – you’re not focused on the customer, then you stand the risk of making improvements on irrelevant things.    This is an important message, and I would describe it to people in terms of a recipe.  I can tell you all about making a cake… we need chocolate, sugar, eggs, and flour.  I also tell you that you need to put all of these things in the oven at a temperature of 350 degrees.  And you say, “Great!  Now I know how to make a cake!”  You take all those ingredients, the elements, and stick them in the oven at 350, and nothing happens!  You don’t have a cake!  So, you turn up the heat and see if that produces better results… you work a little harder.  Obviously, the oven isn’t hot enough, so let’s make it 375… If you believe in stretch goals, you might even turn the oven up to 400.  Let’s see if we can get a cake out of it now - not necessarily by working smarter but certainly a little harder.  Of course, you still don’t get a cake – in fact, all you get is burnt results out of the oven.  The truth is that Business Process Excellence and Six Sigma is a recipe and if you don’t understand the system and the recipe and how the ingredients go together – what to add, when to add it, and how to mix it… If you don’t appreciate that there is a recipe for pulling it together, then you don’t have the whole picture and you won’t be able to drive the results the business needs to be successful. Rod Morgan, e-Zsigma (Canada) Inc. If you have a Six Sigma "superstar" you would like to have featured in SpotLight, please send your recommendation to news@e-zsigma.com along with: 1. a brief biography of the person you are recommending 2. the reason you are submitting their name 3. a photograph or "action shot" if you have one 4. your nominee's contact information (so that the e-Zsigma news team can obtain their consent as well as conduct an brief interview)   If you have any questions regarding Six Sigma Spotlight, please contact e-Zsigma.  Your feedback is always appreciated!