It was another day at the office for Izzy Sanchez. He was in a training class for American Standard listening to the instructor carefully explaining how to use new software to a group of employees.
The employees were dutifully following along on their laptops; things appeared to be going well. But Sanchez’s job was to dig deeper than appearances.
During a coffee break, Sanchez asked the employees how the training will work for them. Their response is a resounding “thumbs down.” When Sanchez asked why, an employee pointed to the classroom.
“You see all those computers in there? Well, we don’t have those computers at work,” he said.
“The new software was useless without computers,” remarks Sanchez. “So I found a way they could accomplish the same thing using a pencil and a calculator. Sometimes it’s something that simple.”
Sanchez has a lot of stories like that. For some, the answers are simple; for others, much more complicated. But it’s stories like that and the problems that cause them that led to the formation of Lean Sigma Professionals, LLC.
Founded in 2007 as a partnership between Sanchez and Ian Cato, who are both managing partners, Lean Sigma Professionals provides business performance solutions through Sanchez and Cato’s extensive expertise in Lean Six Sigma solutions for business.
Borrowed from Manufacturing
“Lean Six Sigma is actually a combination of two business efficiency methodologies,” explains Cato. “Lean dates back to the Toyota assembly line. The purpose of Lean is to reduce waste, to streamline and add value.
“Six Sigma is all about reducing variation and defects. In a Six Sigma process, 99.99966 percent of the products are free of defects. Motorola was first to use Six Sigma in producing their pagers. But Six Sigma became well known when Jack Welch used it at General Electric in the 1990s.”
“Lean Six Sigma is a blueprint,” adds Sanchez. “It allows you to identify errors, find root causes and eliminate them. Mistakes can cost companies up to 30 percent of their revenue each year. That’s why this is so important. Lean Six Sigma transforms business processes so they deliver their intended results reliably and consistently.”
Both Sanchez and Cato first came into contact with the Six Sigma methodology while working in large corporations—Sanchez at Xerox and Cato at Johnson Controls—when both were picked as promising leaders and sent for Black Belt training. Each one is now a Six Sigma Master Black Belt and Certified Lean Master.
Lean Six Sigma skill levels are designated by “Belt” designations. The standard hierarchy is Green Belt, Black Belt and Master Black Belt. A Green Belt can handle most problems within a company, a Black Belt is an expert and a Master Black Belt is equipped to handle highly complex issues as well as train others in Lean Six Sigma.
Both Sanchez and Cato entered into training with a healthy skepticism. They were quickly persuaded.
“By the second week I was beginning to see sense in it,” says Sanchez. “I’d just finished grad school for mechanical engineering and realized that if I’d known Lean Six Sigma then, I could have written my thesis in half the time. That’s when I decided that this is really powerful and I turned into a believer.”
“I was sold after I learned about the transfer function,” Cato says. “The transfer function states that outputs are a function of inputs. Most companies focus on their outcomes, on their net incomes. A Lean Six Sigma company focuses on their inputs, on all the items that contribute to their net income. That’s the fundamental difference between companies who’ve implemented Lean Six Sigma and those who haven’t.”
“And it’s quantifiable,” Sanchez adds. “You analyze and quantify. It’s measurable at the end. You’re getting data from it. Lean Six Sigma was developed for manufacturing but it’s expanded into just about every industry now. It can be applied to anything that has a process.”
“But we mean something different when we talk about a process,” Cato points out. “For most people a process is a group of tasks. To us, a process is a foundation, an infrastructure. It has a measurement system and an owner. It tells technology what to do; it tells people what to do. That’s a process.
“We’ve found that most companies with a problem don’t recognize it as a process issue. They think it’s a people issue. So they go out and hire smart people and they expect the smart people to fix things. In many companies the people are constantly fixing things because the problem is about the process infrastructure, not the people. Companies invest massive amounts of dollars on people and technology and ignore their process.”
“What they don’t realize is that if you have a process problem, better technology will only create your problems faster. They’ll now manifest at the speed of light,” interjects Sanchez.
Sanchez, who has an engineering background, and Cato, who has a finance background, first crossed paths while working at Bank of America headquarters in Charlotte. Part of the wave of professionals with Six Sigma experience the bank hired to help refine their processes, Cato became Sanchez’s backfill when Sanchez was promoted.
In hindsight, they credit their partnership to serendipity. Often they would be leaving the bank, hours after the official end of day, and run into each other in the parking lot.
“We would stop to talk about issues and concerns,” Sanchez remembers. “We found we had a lot in common, that we had the same values.”
Those conversations and their mutual belief in the power of Lean Six Sigma principles were the building blocks that led to their startup of Lean Sigma Professionals.
The partnership had an unconventional founding. The two lived on different sides of Charlotte so when it came time to make the business official, they agreed to split the driving distance and meet somewhere in the middle to sign the partnership agreement. The middle turned out to be a dirt road of an undeveloped housing subdivision off I-485.
“We signed the papers on the trunk of my car,” Cato recalls with a chuckle.
The business is unconventional in other ways too. It uses only Lean Six Sigma methodology. That, coupled with their self-designed S.I.M.P.L.E. framework, provides practical and sustainable solutions customized to each client’s needs and objectives.
And unlike other businesses, the company, which they founded in December of 2007, didn’t launch until February of 2009.
“We kept our day jobs and took time to apply the Lean Six Sigma tools to building our own business,” Cato explains. “We built our strategies and got mentorship from another consulting firm. We developed the company on our values. In our careers we’d had experiences with business consultants, and there were things we wanted to do differently.”
A Different Approach
“First, we were determined not to go into a company and disrupt their culture. We didn’t want to be the type of consultants who set up tent, camp in the organization, and then hand down the ‘Holy Grail,’” says Cato. “Where other companies send in 10 or 15 consultants, we send in one really experienced and capable one. And our consultants are there solely to work; not to sell the company on additional work. We don’t allow our consultants to sell.”
“We also ask questions about the corporate culture before we get on-site so that we fit into the company environment,” adds Sanchez. “We’ve actually gone to a nearby Wal-Mart or Target to change clothes when it was necessary.”
“We wanted to use a softer approach when we come into a company,” Cato adds. “We ask questions instead of telling people what to do. We stand back and watch. Many times when we come into an environment, it’s the first time someone has directly asked the employees what’s going on.”
“If people feel that you have a true interest in their pain, they’ll talk to you,” says Sanchez. “But you have to demonstrate your interest. So when they say, ‘You won’t be back here at 3 a.m. when the real work starts,’ you show up at 2 a.m.—with coffee and doughnuts. You make them know what they do is important, because it is.
“We don’t sit in a conference room. You will find us on the manufacturing floor, potentially under a machine figuring out how it works. We’ll be offloading a truck to feel the weight, the girth. In a bank, we’ll be with the teller or loan processor making a connection with the person actually in the process.”
“We come into a project because a company is feeling pain,” explains Cato. “They know they have a problem but they don’t know the legacy of the problem. It’s up to us to figure out what the key driver of the problem is.”
The different approach has already yielded Lean Sigma Professionals success. Last year, they were awarded the Supplier of the Year Award from the U.S. Postal Service for their work with them in 2010. Only 13 companies out of the Postal Service’s 20,000 suppliers received the award.
“Price Waterhouse, Deloitte, Accenture and Booz Allen—all the big consulting firms—were in the mix, but we were the only consulting firm honored,” Cato says with obvious pride. “We may have been a small company without a big name profile, but we went in there and delivered $60 million worth of real money in savings for the Postal Service.”
In addition to custom-designed business solution programs to improve existing processes, Lean Sigma Professionals also designs new processes based on client specifications and allows companies to bring Lean Six Sigma principles in-house by providing flexible training in Lean Six Sigma for employees. Training ranges from a one day overview through Master Black Belt training.
“Another piece of our business is implementation,” says Cato, “and a key part of implementation is messaging. It’s not just about what we’ve done in a solution. We have to take the Lean Six Sigma jargon and translate it into something that makes sense to the client. If they don’t understand it, there isn’t going to be any implementation.
Experts for Charlotte and Beyond
Sanchez and Cato are proud of what they’ve built in only four years of business. They now regularly handle projects all over the country and internationally as well. Their goal is to grow by 100 percent every year and they firmly believe this is an achievable goal.
“We started this business with our personal money and credit cards,” Cato states. “In 2009, our net income was negative $60,000; a year later we were at $3 million. We’re doing things that are unique. We want to make this methodology available to small business. Lean Six Sigma could be especially helpful to small businesses and we’re working on strategies to get it into the small business community.
“We’re also working on a performance-based contract option in which companies pay us based on what we do. We’re putting skin in the game.”
“And we want to commit to being the Lean Six Sigma consulting experts in Charlotte,” Sanchez says. “Every week we see consultants flying into Charlotte from other places to do what we do. Charlotte is our headquarters and it’s a great business city. We have a stake in seeing that Charlotte business thrives and we have the expertise and passion to accomplish that.”