Can Six Sigma Be Applied to Governmental Agencies?

Traditionally, Six Sigma has been considered a process analysis and improvement methodology for businesses. The reason is simple: identifying and eliminating waste has a direct effect on an organization's bottom line. Given that companies report hard numbers in their fiscal year-end statements, any improvement in the bottom line yields clear results. As such, the methodology is seldom discussed in the context of improving processes within governmental agencies. That is unfortunate because the approach can be implemented to yield significant savings and efficiencies - albeit in different ways than when deployed within for-profit organizations.

In this article, we'll take a closer look at the implementation of Six Sigma in government. I'll explain why a project's focus must be entirely different and the impact of deploying the methodology. I'll also describe the approach as seen through the lens of the balanced scorecard.

Shifting The Initiative's Focus

Whether we're focusing upon the local, state, or federal level, governmental entities have different core objectives than for-profit organizations. Their goal is to provide services for the community. The challenge is that they must do so in a way that the public perceives their process to be efficient. After all, the provision of services relies upon taxes. Raising taxes to fund services is generally considered a last resort since it is politically unappealing.

In a typical application within a for-profit enterprise, Six Sigma would be focused on eliminating waste and thereby, providing fiscal savings. Within government, the focus is less on savings and more on providing efficient value to their customers (i.e. taxpayers).

Much of the value that is provided by government to the public is done through regulating private industry. However, those regulations carry a compliance cost for businesses. The job of government is to regulate companies without going overboard since over-regulation would increase costs beyond that which private industry could profitably bear. A Six Sigma initiative can be focused on the execution of regulatory actions. The methodology can help governmental agencies reduce compliance costs for the private sector while serving taxpayers' needs.

The Impact Of Improving Efficiencies

When a Six Sigma initiative has helped government serve their customers (taxpayers) more efficiently, a number of benefits emerge. First, employees within the affected agency can devote more of their time to activities and projects that yield more value. Second, the financial requirements to execute a regulatory action declines which means taxes do not have to be raised. Third, the impacted private sector's cost of compliance with the new regulation can be reduced which further benefits taxpayers through lower costs.

In effect, by identifying and eliminating waste within governmental processes, Six Sigma can deliver significant benefits to multiple parties.

Through The Lens Of The Balanced Scorecard

The balanced scorecard was originally created for the private sector. It separates the goals of a company into four categories: internal business processes, financial, learning, and customer. It is used by managers to help measure the extent to which their organization's short-term operations dovetail with their long-range strategy. In a for-profit company, "financial" is the priority. In government, "customer" becomes the priority. Rather than generating a profit or a return for shareholders, governmental agencies are primarily concerned with making sure they're meeting the needs of taxpayers.

The process improvement approach of Six Sigma fits seamlessly into governmental agencies. The only difference is the objective for which it is implemented. As long as process-related metrics can be gathered and analyzed, a Six Sigma team can uncover efficiencies that benefit multiple parties.