Jan 19

Service Businesses Should at least Try to be 4-Sigma Enterprises

I attempt to keep my personal error rate to about 1, 2 or 3 things out of 1,000, which, if I could achieve that, would put me somewhere around a 5-sigma rate. Service businesses, or people in the service business like me, cannot possibly hope to match manufacturing enterprises, which, if they follow Motorola’s system, aim to be 6-sigma companies with error rates of around 3 failures per million operations.

I have found that by using checklists, it is possible for service businesses to achieve 4-sigma levels, and possibly even 5. International companies like Disney aim for those levels of excellence. When I founded the Ottawa Senators, I wanted them to try to come close to delivering Disney-type in-arena experiences with matching quality. Fans will have to judge whether we succeeded. But if it’s good enough for airline pilots and Disney, hospitals and doctors (to use checklists), it ought to be good enough for you and me.

However, most businesses, not-for-profit/NGO/charity organizations, and government offices that I’ve dealt with are stuck at the 2-sigma level, which means that for every 1,000 things they do, they’re re-doing 300 of them at least once, but sometimes two or three or four times before they get it right.

Why is this so important? 

Well, if you don’t use your checklist  each and every time you are getting ready for takeoff, you may end up like Air Canada’s “Gimli Glider” (shown above) and run out of gas because you forgot to check whether you were taking on jet fuel measured in liters or gallons. The pilots thought they were using Imperial units; they weren’t. So you have to remember to check your checklist and never skip a step, never.

Not only will your level of safety go up, your level of frustration (and those of your suppliers and clients) will go down. As well, your productivity and earnings will leap skyward.

And, of course, if you are a 2-sigma business (or heaven help you, a 1-sigma), competitors may soon appear that’ll put you oob (out of business).

I have an international business speed limit that I keep in my mind (also shown above). It’s only for fun, but, based on my experience, it’s pretty true–most enterprises are not only hopelessly full of error, they’re notoriously   s  l  o  w.

Brucie’s International Business Speed Limit (kph)

Hong Kong 100

New York 80

San Fran 70

LA 60

Chi-town 50

Toronto 3

Ottawa 0.1

note: for entertainment purposes only

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About the Author

Bruce is an entrepreneur/real estate broker/developer/coach/urban guru/keynote speaker/Sens founder/novelist/columnist/peerless husband/dad.