When we think of Six Sigma, we think of companies like General Electric and the fact that after, less than two years after its Six Sigma implementation, the company brought in about $320 million in cost savings. News flash — the Six Sigma tools and methodologies will work for your own personal finances!
The Conversion
Although the processes are the same, they have to be converted on a personal scale with a personal meaning to your specific issues. The Six Sigma tools are brilliant in their simplicity, and can be used to ultimately fix the root causes.
DMAIC: The Phases
See how applying DMAIC makes sense with your own budgeting needs:
D-Define: In this phase, you will need to establish your issue (problem) in a clear concise statement. Then, outline what you expect to achieve (goal) along with a specific time frame. This also includes why it is important that this change takes place.
M-Measure: In this phase, collecting data is done on a continuous bases, so we should know the minute we have hit one of our prime causes for the current situation. So, we want to identify all those causes. Sample causes are — not having a budget or not staying to current budget, eating out too much, being undisciplined in spending, or not making enough money for current lifestyle.
A-Analyze: This phase is a little tricky, because there is the surface issue of what is causing the problem, and then there is the root cause of the problem. So looking at the Measure phase, figure out which issue is causing your lack of money. Then figure out why you are doing that. So, if you find that you are impulse buying after you have a bad day at work, now you need to figure out what is causing those “bad” days at work.
I-Improve: So, after you have figured out the deep rooted causes for your excess spending, it’s now time to get creative and start thinking of possible solutions. You need to test drive these solutions to see if they are sustainable.
C-Control: Be gentle with yourself in the control phase. After all, the improvements might have worked short term in the test drive stage of the Improve phase, but aren’t really sustainable in the long term. So armed with strong intention, if the new recommendations you have established aren’t working, then redo them to more controlled, sustainable ones.
Learn more about Six Sigma tools through one of our training courses! For more information on our courses or services please visit 6sigma.com.
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