As I was getting into the cab outside Sheraton Saigon, the concierge guy handed me a small square piece of paper. "What’s this for?", I asked, without really looking at what was handed to me.

"In case you have trouble with the driver sir.", the concierge guy answered. It was a small feedback form allowing hotel guests to rate their cab drivers. Don’t think I would have the need for it though, I thought. The airport ride’s just a 7km-distance, 45-60 minutes. I took the form anyway. It was so tiny one wouldn’t call it a form.

Well, I did hit a little cab trouble. Upon reaching the Tan Son Nhat International Airport the driver insisted that I pay for a ’parking ticket’ which I would not; translating into some unpleasantaries on his part. I finally got out of the cab, very upset, after paying the correct fare. The form came a little handy in facilitating my complain to the hotel as the concierge guy had written the cab ID on it earlier.

A few weeks later I did have the opportunity to ask the Director of Rooms how on earth the hotel manages a process which are out of the hotel’s scope of processes. As I found out bad cab rides are one of the major reasons why people don’t return to Vietnam. No guessing whether this impacts on hotel guest experience in the check-out process or not. Well Andy related to me that his hotel works closely with the Tourism Board and cab company ensuring feedback is directed back to the cab company and to that particular cab driver. Apparently the hotel takes a serious stance against errant cab drivers trying to make a fast buck.

On my next visit I don’t think I’ll ever run into the same guy again in cab 256.

Last Thursday, 5th June, the Malaysian Government revamped its petrol subsidy system by increasing petrol prices by a steep 41%, from USD0.58 (RM1.92) a liter to USD0.83 (RM2.70). It is low if you guys look at it in US currency, but in Malaysian Ringgit terms it’s a spike in cost of living. Public expectation here is low petrol prices because Malaysia is an oil-producing country. Petrol in Venuezela, by the way, is USD0.05 per litre.

This price hike caused the following to happen in chain-effect:

• Transportation companies announced increases of 35% in trucking and logistic fees (now it’s increased to 40-45%)
• Petronas announced gas price increase by 187%
• Electricity rates increased 18-26% for commercial and small businesses
• Kuala Lumpur stock exchange fell 27 points the next day the price hike was announced
• An island-state said that low-cost housing was no longer possible in anticipation of rising building materials cost
• Other Government-price-controlled food items such chicken had their ceiling price removed

The main argument for the fuel price increase is that the heavy government subsidies eat into the economy pie and that the Malaysian fuel subsidies flows to its neighbors Thailand and Singapore (in a limited way)- Thailand and Singaporean vehicle traffic into Malaysia is estimated to be above 200,000 vehicles a day across the Thai-Malaysian and Singapore-Malaysia borders. The Thailand and Singapore cars fill-up before leaving for home. Singaporeans are allowed only a three-quarter full gas tank as their vehicles cross the border.

Goldman Sachs estimates a 7% inflation for June while local financial institutions forecast a 5-6% inflation for the whole of 2008, a ten-year high. There are immediate mitigation steps undertaken by the government of course, such as a USD191 and USD46 per annum rebate for small car and bike owners respectively. However, there are huge gaps in the process- people who do not own vehicles are missed out in the picture, left alone to combat inflation.

The Malaysian Government is expected to realize USD12.23 (RM40) billion in the subsidy cuts this year. With the savings there promises of improving and expanding the public transport system and other public-beneficial programmes. Citizens take this fuel price hike from a political viewpoint as well as the economics of it. There is high suspicion on the utilization of subsidy savings- where is the Government channeling the additional petro-dollars from the realized savings to. Another prolonged fury- the financial statements of Petronas are not made public by law since many years back.

Public expectation is on the Malaysian Government to improve the public transport infrastructure which they have promised to do but still dragging their feet on it. Yes, the public feels left alone. Public transport is important so we can all leave our cars at home and start using a cheaper means of transport. Meantime, the Malaysian Government slashes RM2 billion of its ministers’ entertainment allowances and promises no further fuel price hikes this year. Pullback in government spending has its effects on the economy, as we know the theory of macroeconomics explains it. The first blood drawn will be on Malaysia’s retail and hotel sector because the entertainment cut affects government seminars and events … the reduction in government spending will result in a contraction and loss of jobs in both industries eventually.

But frankly everyone hopes this situation does not arrive. Being worked in the hotel industry previously- in times of falling operating profit, the only immediate controllable remedy is to cut and reduce operating expenses. However 4-5 star hotel operators know that cutting costs has a limit before it impacts on guests’ experience. I was lucky to have Six Sigma when trouble hit my hotel in 2003. That year SARs arrived and it hit the hotel industry hard (imagine a hotel having an average occupancy of 90% going down to 8% for three months)- for starters my colleagues and I (senior management) voluntered a 25% pay-cut to immediately reduce costs. Six Sigma was just launched in the Asia-Pacific region and the team quickly hit the boardroom and flipcharts to identify revenue-enhancing and cost reduction lean projects. I particularly championed a laundry project and an electricity reduction program. Six Sigma tools such as process mapping, the CTQ diagram and VOC helped identified critical process areas which mattered to our guests most. Those areas were treated with extreme care if there was a particular cost reduction. We sold our laundry services to nearby hotels; staggered group check-ins and planned chiller starts on half-hour intervals to avoid the triggering the higher band electricity rate and so on. SARs lasted till the end of the second quarter of 2003. Despite of this, the hotel went on to achieve 125% of its budgeted gross operating profit by the end of 2003; increased short term investments to USD4 million, and the paycuts never flowed down to the other managers and staff. I can frankly say that without the timely appearance of Six Sigma in Asia-Pacific at that time, the drastic cost-reduction my hotel took would have been more damaging to the business.

That’s Six Sigma for you- tested in times of financial turmoil.

Quickfacts

Currency USD1~RM3.27 at time of writing

Per capita (estimated) 2007 USA USD46,000; Malaysia USD14,400

It’s election time again in Malaysia on 8th March 2008. I picked up this interesting story from Yahoo and wish to share it with the readers here. Held once every 5 years, this article talks about ’dead’ voters in Malaysia.

KUALA LUMPUR (Reuters) - Malaysia has found nearly 9,000 people aged more than 100 on its electoral rolls as it heads for general elections next month, raising suspicions that the books are "contaminated" with dead voters.

The Election Commission has found the names of 8,666 registered voters with birth dates from a century or more ago, the New Straits Times said on Friday, quoting commission secretary Kamaruzaman Mohd Noor.

They included two 128-year-olds, the daily said.

"As far as the commission is concerned, as of December 31 last year, these voters are still alive," Kamaruzaman said.

Opposition groups have complained for years that the rolls are outdated and vulnerable to fraud.

The Election Commission says it relies on a dead voter’s family or officials to notify it of the death and so rolls can be outdated, but it denies scope for electoral fraud whereby someone casts more than one ballot by impersonating a dead voter.

At the elections on March 8, the commission will for the first time use indelible ink to dye a voter’s finger to ensure he or she cannot attempt to cast a second ballot undetected.

"We suspect that many among them had in fact passed away but that the commission has not yet struck off their names from the rolls," said Wong Chin Huat, of electoral-reform lobby group Bersih, which includes several opposition parties.

"This suggests a high degree of contamination in the rolls, which will make it easy for people to impersonate them on polling day," Wong added.

Malaysia has 10.9 million voters and its population has a life expectancy of about 72 years for men and 76 for women.

Opposition party Parti-Islam Se-Malaysia, which first spotted the names of the two 128-year-old voters on the rolls of central Selangor state, said it was checking if they were still alive.

"We plan to apply to the Guinness Book of Records to list them as the world’s oldest voters if they truly are still alive and kicking," said party spokesman Roslan Shahir said.

I’m just wondering, what is your opinion on this from the Six Sigma point of view?

It’s been awhile since my last blog posting... much time was spent managing my home renovation project. It’s now completed, I can sit down and ‘do my things’. I started blogging (my own blogsite) Six Sigma in April 2007 with the intention of staying in touch with the subject matter and also to learn certain web-technologies (I’m halfway through a Dreamweaver training guide still). Along the way I found the iSix Sigma Blogosphere website- and eventually getting accepted in Blogosphere provided a ‘higher’ avenue for my thoughts on Six Sigma. Yes- ‘rubbing shoulders’ amongst the expressive best elevated my writing style and Six Sigma knowledge.

I joined a Starwood resort in late 2002 as a finance manager; 3 months later I was asked to sit for 3 three-hour psychometric test that would eventually rate me as being creative, unorthodox, having that Six Sigma ‘mind’, etc, etc, which gave the green light to Green Belt training. After 4 years and kicking off Six Sigma in 2 other hotels (believe it or not- as Financial Controller/ GB) I left the hotel industry to pursue something else very different- manage the Financial Management of a huge IT department of a bank while implementing shared-services initiatives using the ITSM practice.

Is there life after Six Sigma? Yes, there is. I left a Six Sigma job but never really did leave Six Sigma. All that Starwood Six Sigma training left me with a ‘heightened’ sense for processes (but it’s not that having an inquisitive mind did not get me in trouble with my superiors in a ‘traditional’ environment!) I think in process maps and decision boxes, for instance. I never really left the hotel scene either- my wife and I dine regularly in Starwood and its competitors’ hotels giving me a 360-degree experience in the hotel industry- as worker previously and now as customer.

Well, here’s to a great hotel company!

Each company probably would have strategized targets to achieve on annually. In Starwood they are know as Big 5’s. Big 5’s are tactical targets that support the company’s global initiatives and global objectives; normally a mixture of financial and non-financial but measurable targets. These targets ‘flow down’ from divisional presidents’ offices’ to area directors and down to general managers of individual hotels. The general manager’s targets in turn are supported by each senior team member’s Big 5’s. Members of the management (who are stakeholders of processes as well) evaluate whether Six Sigma can be used as a platform to achieve Big 5’s. If there’s no clear link, it’ll probably mean no buy-in from stakeholders.

When there’s no buy-in, Black Belts are told to look at the next item in the pipeline. This is to avoid the project ‘dying’ halfway.

The first time I watched Sidney Lumet’s 12 Angry Men (1957) was four years back, at a Six Sigma leadership workshop. We were only 3 days into a two week long training, and some of us were already stretched to optimal stress levels. Being a bit more of an action buff, and being after a buffet lunch when training resumed I thought I’d grab extra coffee just in case. Little did I know a few years down the road I would have watched this movie a few more times.

Except for a bathroom break scene almost the entire movie takes place in the jury room. The film starts off in a relaxed manner- except for Henry Fonda most of the jurors are more than eager to vote and ‘get out of here....’. Tension and conflict increases as the story unfolds. I read in a web article Sidney Lumet used wide angle lens at the beginning of the movie but the cameras closes up as the movie progresses thus creating that claustrophobic feel. Rain and the sweat of the afternoon add to the effect too.

12 jurors- 12 totally different contrasting characters- the big arrogant bully, the thinker, the wise, the amiable, the persistent and persuasive, the follower, placed in conflict; read ‘corporate world’ please. No wonder this film is a favorite case study in corporate trainings. Straight and engrossing. No special effects, but plain tight intense acting. Tough guy Lee J. Cobb delivers the last jury vote in classic style. Henry Fonda’s character, Juror Number 8, reminds me of the Six Sigma guy- alone in opinion at the beginning, but having the facts separated from perception. Along the movie, he craftily tackles the different social styles of the competition and challenges their opinion. This character teaches a thing or two about staying focused on course and not buckling under pressure. The best scenes are the moments of buy-in as the camera zooms in on each character.

I would say, Results= Persistence + Buy-in!

Conformance is how well a process performs within its CTQs and specification limits. Variation is the opposite of it- the difference in the process output over time. Variation is often caused by elements which are part of the process itself (common cause), or elements which are external to the process (special cause).

Common Cause variation is effected by elements within the process. They are mostly random and independent of each other; conforming to the normal distribution curve ie stable. However, a stable process does not mean good or satisfactory output- it merely means the process is consistent within specification limits and the variations are contained within these limits. In the formula y=f(x), there are many x’s but low impact x’s (described in iSix Sigma’s dictionary). Tweak the process to get improvements in output.

Special Causes of variation are arising from unusual circumstances. They are not random, do not reflect historical trends and is not normally distributed. If Special Cause variation is detected in a process this process is considered not stable. In the formula y=f(x), there are few x’s but high impact x’s (described in iSix Sigma’s dictionary). It’s probably not a good idea to change the process first, but dig deeper into the root cause of this kind of variation. Tweaking the process won’t make the special cause variation disappear because these variations may have nothing to do with the process. Introducing a process change may result in worse variation than before -the normal ‘ups and downs’ of the process may turn into irregular spikes.

Hotels sell ‘moods’ and ‘senses’- it’s inevitable these elements influence comment forms or process output but what’s the connection between variation cause and customer experience? This brings us back to that particular set of dots outside specification limits in that project run chart that had the food & beverage team bewildered. If the Five Whys and Cause-And-Effect can’t provide a direction, it’s time to look at the ‘history’ of the guest who contributed to the data point. Were there any complaints logged on this particular guest prior to this project’s process? In the hotel industry, the guest goes through processes back-to-back. Any ‘unhappiness’ or ‘joy’ from the previous process is retained and brought forward to the next process, the degree which depends on how the guest interacts with hotel employees, hotel products and the customer recovery process. For instance, the guest ‘suffers’ a ‘bad’ check-in (room not ready & guest waits unreasonably; assigned a smoking instead of a non-smoking room, failed elevator, etc.) and is still unhappy at dinner time gives a poor rating to the food & beverage service. Properly identifying data points like this tells a clearer picture of project performance- what to change and what not to change.

CTQs, short for Critical-To-Quality, are key quantifiable requirements of a service or product which are critical to meet customer expectations and often defined by customer expectations. It’s what the customer expects of our product or service. Customer expectations and comments which are gathered from surveys or comment forms for a particular area of service are translated (Diagram 1) into meaning groupings using affinity diagramming. The critical requirement (CTQs) for the issues is identified thereon from the translation table.

Diagram 1

VOC translation

Subsequently, use the SIPOC (Diagram 2) to scope the project and identify the main key measures in the inputs & outputs; and the process itself. The key measures should relate to CTQs and able to quantify CTQs

Diagram 2

SIPOC

Key measures

In the hotel industry, expect changing expectations even from the same guest. Customer expectations may vary through the day and through different moods. Imagine this scenario related to the example above- if I am having a hectic day ahead, I’ll want my room service breakfast to be delivered to the room within 10 minutes; but in the evening, I wouldn’t care if dinner is delivered in 25 minutes because it’s the time I’d take for a hot dip in the jacuzzi.

John Corr’s comment (9 March 2007) in Andrew Downard’s Six Sigma Sucks blog (1 August 2006) showed the lack of understanding of how Six Sigma is applied in the service industry. While preaching a certain methodology it’s good to do some research first. A great example of how Starwood does continuous improvement in its hotels:

Simple problems- Starwood uses a simple methodology in its ’Starwood Cares’ program to tackle simple straighforward problems. Projects like this have a short deployment time, ranging from days to within a week.

Less simple problems- use Innovation Transfer (projects transferred from successful projects in other hotels) or Quick Hits (projects for simpler issues). The effort and deployment time of these methods are a fraction from a DMAIC project.

Complex problems- use DMAIC!!

While the first two methods could be known as Lean, the idea is to use different methods to tackle different issues so as not to get the Six Sigma resources spread over too thinly. At project selection stage, entries are reviewed and asked- ‘do we need Six Sigma for this project?’ If the answer is ‘no’ then the simpler methodology is used. Also in the service industry, there’s also a need to enhance customer satisfaction and service values, not just pure financial benefits. In the service industry, service quality and sales are related anyway, though in deferred time frame. Increase in quality of service does not normally impact on the profit and loss account in 1-2 months time but statistics show that great customer satisfaction index normally equals increased returning guests and increased sales within a slightly longer time.

Interesting blog there, Andrew, you’ve got comments right up to a year later. I’ve meant to put this in the comment box but ran out of word space.

When I first joined the hotel industry as the finance guy, I was literally glued to my desk. Sure, I would attend all the necessary office meetings and staff events but my mind was solely ‘back to work’. Bipan the General Manager would come by my office and reminded me very often, “Hey, Mr. Finance Manager- your office is out there..!”. I chuckled at the thought of my office being ‘out there’- 39 acres of rainforest with a few major species of birds, monkeys and other wildlife thrown in. Not forgetting the family of otters that swam in every night.

Of course, being ’out there’ actually means getting out of the office and spending some time on the ‘shop floor’ with the objective of interacting with customers and employees; and knowing the field. It is also Management by Wandering Around (MBWA), invented by Hewlett-Packard sometime in the 1970s, made famous by Tom Peters and Robert Waterman as one of the ‘Eight Basics’ in their book In Search of Excellence in 1982. Considered old school by some, MWBA is still very much practiced especially in the hotel industry; in fact MWBA is an integral part of hotel culture- top management must have that direct informal communication line with the information source- customers and employees. It’s part of the job. Besides communication it’s also important to get a feel of what’s going on out there.

The true technique to effective MWBA is not wandering for wandering’s sake but wandering with a few key objectives in mind and trying to achieve those objectives. Wandering without a purpose is considered unofficial down-time where nothing is achieved. Points to consider for an effective walkabout:

Make up your mind
List down, either mentally or jotting down, the objective(s) of my shop floor bout before heading out. What’s the time now, where are the ‘action’ areas? Where are my Six Sigma project areas? Where are the hotel guests hanging out now? Are there any issues at the back-of-the house 1 which need to be look at?

Stay sharp, stay relaxed
Stop thinking about that spreadsheet on the computer screen back at the office. If I’ll need to complete that report, I’ll need to complete it then, and stop thinking about leaving my desk. Stay relaxed so that employees around me don’t feel that it’s an inspection (even though it is at times). Get to know at least one employee on a personal basis. Recognize employees who are doing it right. Be prepared to get engage with hotel guests during peak hours; be approachable and proactive. It’s OK to carry a bag or two- I’m representing my company; I’ll need to tell the guest implicitly senior management really cares for him/ her. Keep an eye out for shortfall in brand standards on the floor.

Know the (process) flow
Know as much as possible the process flow, procedures and brand standards of the area I’m visiting. It doesn’t mean I will need to chalk up hours of reading manuals but since I’m doing a situational watch it’s good to observe the floor action and relate it back to the process, making my wandering a good education process. I’ll also need to create the impact amongst employees that I know the shop floor, being mindful that I’m a walking reference desk, so I’m ready to be approached and engaged by customers or employees.

Check on project areas
It makes sense to ‘inspect’ the areas which are relevant to the Six Sigma projects I’m running. If I’m running a project on room category up selling at the hotel reception area, I’ll head for the hotel reception to observe how the room up selling is carried out during guest check-in, peak and off-peak. When I was heading a project on laundry chemicals in the laundry department, I visited the laundry floor with the laundry manager when everybody had gone home, to check the poundage of soiled sheets collected during the late evening.

Time-keeping
Keeping track of time is important- it’s unproductive to spend hours wandering and engaging people while neglecting my key areas of responsibilities which I need to address on a daily basis. The idea is to engage effectively and then move on. I’ll keep my wandering ‘tight’ so that I can walk the same areas at a different time of the day.

Kill the incidents
There is essentially a difference between an incident and a problem. Incidents are short interruptions to a service or shortfall in service quality, for instance failure of a lunch order to arrive within a comfortable timeframe. Incidents could be one-off, but recurring similar incidents indicate there’s a problem at hand. If the food is late for every given order, then there’s a problem at hand. I’ll read the social style of the customer and do damage recovery if necessary because business needs to go on. I’ll need to be mindful about tackling problems in full public view which I can’t solve on the spot- be honest about it and promise to revert within reasonable time. Incidents can be solved on the spot or within a very short time cycle but problems need more analysis and time to determine the root cause. Problems will need to be addressed in the next morning’s briefing and possibly materialize into projects.

In the previous company which I worked for MBWA is not known as a separate concept but has its elements infused with other organizational practices. Which means if I flipped through the employee's pocket book I would find MBWA values there but called under different titles. It is effective when incidents can be solved; problems properly followed through.

1 Back-of-the house- a term used in the hotel industry to describe the ‘employee areas’ and back-end support functions such as the administrative office, employee cafeteria, engineering office and so on.