#PM and Green Belt Six Sigma—The Goldilocks Zone

1. Introduction—Variance in quality management vs. in project management

I just finished taking a certification exam for project management (I passed, by the way), and can now focus attention on my class that is helping me prepare for the exam for my Green Belt Six Sigma certification. This is because the application area for my project management is manufacturing, and quality management is vital to any manufacturing endeavor these days.

While driving back from the introductory class for my Six Sigma course a week or so ago, I was thinking about the relationship between project management and quality management. Our instructor talked about the difference between Lean and Six Sigma quality management; Six Sigma is about the reduction of variability in production, and the concept of Lean manufacturing is about the reduction of waste in production.

I thought about the variances that project managers deal with, mainly those having to do with cost, time, and scope. These are measured through earned value analysis by the quantities of the cost performance index or cost variance and the schedule performance index or schedule variance.

The formulas for the cost performance index or cost variance are:

Cost performance index or CPI = EV/AC or

Cost variance or CV = EV/AC

with EV being the earned value and the AC the actual cost of the work actually done so far in the project.

The formulas for the schedule performance index or schedule variance are:

Schedule performance index or SPI = EV/PV or

Schedule variance or SV = EV – PV

With PV being the planned value of the work planned to be done so far on the project, and EV the earned value of the work actually done.

Let’s stick with CPI and SPI for the moment for clarity. It is drummed into our heads in studying for the project manager certification exam that CPI and SPI greater than one are good, meaning that the project is under budget and ahead of schedule, respectively. Conversely, CPI and SPI less than one are bad, meaning that the project is over budget and behind schedule.

2. The Goldilocks Zone

In our study group discussions of the CPI and SPI, it was clear that, while you as a project manager wanted to get the CPI and SPI greater than one, some commented that you didn’t want to get it too MUCH greater than one.

Let’s say you have a CPI of 2.0, which means you are getting twice the work done for the resources than you planned. Is this good? Well, the project manager may think so, but it reminds me of the old joke: an optimist sees a glass filled 50% with water as being half full, and a pessimist sees it as being half empty, but the project manager sees a glass that was designed to be twice as big as it should have been.

In other words, this CPI could imply to a program manager that half the resources on the project are not productive.  The program manager may be thinking that these are resources they could be used on other projects, but can’t be because they are still formally committed to that one project.

So you want a CPI that is not less than one, and not TOO much greater than one, but just right—which sounds like the Goldilocks zone, from an story of an earlier pioneer in the testing of porridge quality.

3. Eureka

When I thought back on that discussion at our study group, I realized the relationship between Project Management goals and the goals of Lean Six Sigma in quality management.    As with the principles from Six Sigma, a good project manager tries to reduce variances from the performance baseline.  But as with the principles of Lean manufacturing, a great project manager will be one that tries to reduced the waste of resources on his or her project.

This can be done by making sure to release unused resources after work packages are completed, but also to release unused contingency reserves if certain risks end up not being triggered.  So the Goldilocks zone principle of using just the right resources and nothing more is a concept that bridges both quality and project management.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: