This case study examines the path of Honeywell’s Aerospace business in leveraging Six Sigma as a core productivity and growth strategy. It details how Honeywell evolved Six Sigma from a process improvement initiative to a fundamental component of its leadership system, combining it with Lean principles and leadership development.
The Initial Challenge: Overcoming "Initiative Fatigue"
When CEO Larry Bossidy introduced Six Sigma at AlliedSignal (later Honeywell) in the mid-90s, employees were skeptical, viewing it as another short-lived management trend. The program sounded similar to Total Quality, a fad from the 1980s, leading to groans about another "seatback initiative." However, Bossidy's aggressive deployment and unwavering commitment signaled that this was different. Failure was not an option.
The Importance of a Clear Business Case
All change encounters resistance. People don’t mind change as much as they mind being changed. To overcome this, a strong business case is essential. Leaders must communicate a clear, simple, and compelling message about why the change is critical for the company and for employees themselves. Without a compelling "why," resistance will prevail.
Forging Agreement on New Behaviors
While many leaders outwardly adopted Six Sigma to satisfy senior management, true acceptance was lacking. To build lasting change, new visions require new behaviors. Once the business case is clear, the more difficult challenge is forging agreement on what the organization will do differently. Without behavioral agreements, it is easy for individuals to feign compliance while privately hoping the initiative will pass.
Navigating Mergers and Competing Methodologies
The 2000 merger of AlliedSignal and Honeywell nearly doubled the size of the Aerospace business, creating the challenge of integrating the former Honeywell employees into the Six Sigma culture. Former Honeywell had used the Malcolm Baldrige model for continuous improvement. A team determined that the Baldrige model could serve as a diagnostic tool to identify areas for improvement, with Six Sigma providing the methodology to generate solutions.
However, personal biases and emotional energy created a tug-of-war. Many viewed focusing on two initiatives as dilutive. Ultimately, Six Sigma was chosen as the overarching improvement strategy, and the Baldrige model was designated as a supporting tool. This highlighted a key lesson in change management.
The Missing Ingredient: Shifting from Program to Performance
Despite its success, the Six Sigma program eventually plateaued. An analysis by GE during a later, unsuccessful merger attempt revealed a missing element: a leadership-driven model. Honeywell had senior management support, but Six Sigma had not become a core part of the leadership system. It was perceived as a program run by process consultants, not a fundamental way the business operated.
This created a disconnect. Six Sigma experts, highly trained in the methodology, would identify potential savings but fail to gain acceptance from business leaders. For example, a Black Belt might identify excess inventory and try to force a solution on a manufacturing manager without aligning on goals first. This approach created cultural barriers and made the initiative seem self-serving, hindering its effectiveness.
Building Stakeholder Coalitions
The most critical key to any initiative is building healthy coalitions. Stakeholders—those who provide resources, can block progress, or must implement the changes—must be identified and understood. The leader's role is to make it easy for stakeholders to say "yes" by first considering their agenda and respecting their views.
Revitalizing Six Sigma: A New Vision and Strategy
Following the failed GE merger, Larry Bossidy returned as CEO and sought to re-energize the Six Sigma initiative. Under the leadership of Jeff Osborne, the Engines, Systems and Services business set out to change the game. The new vision was clear: "Six Sigma a core business value…the way we think, act and execute."
The rally cry became, "It is time to take Six Sigma from being about Six Sigma activity to being about business performance." This required several key shifts:
- Align with Business Strategy: The Six Sigma vision and strategies became a subset of the overall business vision.
- Top-Down Project Selection: A "Business Y" model was created, where the executive team defined the top improvement priorities (the "Y's"). All projects had to align with these priorities, ensuring they were not driven from the bottom up without leadership buy-in.
- Focus on Application, Not Certification: The emphasis shifted from training and certifying employees to applying Six Sigma tools to solve real business problems.
- Measure Business Results: Success was measured by impact on the business, not on Six Sigma activity metrics.
Talent and Leadership as the Foundation
A pivotal change was the approach to talent. The organization began to exclusively recruit top-tier leaders into Six Sigma roles. As Vice President Jeff Osborne stated, "Many companies hire Black Belts and try to teach them leadership, we are hiring leaders and teaching them Black Belt skills." This ensured that the people driving the improvements were already proven leaders with business acumen.
Changing the Corporate DNA at All Levels
To embed Six Sigma across the organization, Honeywell implemented a comprehensive training strategy targeting three key groups:
- The Masses: Over 6,500 salaried employees were trained through a Green Belt program. This included specialized versions for engineers (Design for Six Sigma - DFSS) and sales/marketing teams (Growth Green Belt).
- Middle Management: A dedicated, full-time team of nearly 200 Masters, Black Belts, and Lean Experts drove transformation. After a 24-month term, they rotated back into key leadership roles in the business.
- Upper Management: A "Leadership Black Belt" program was created for executives. This intense program provided them with the same certification as full-time experts, ensuring leadership spoke the same data-driven language.
Tangible Results of a Leadership-Led Approach
The revitalization effort produced unquestionably positive results. In 2002, the restructured Six Sigma organization aligned directly with business needs, creating a strong pull from leadership to use its resources. The talent level was significantly upgraded, and the training programs reached thousands of employees. Most importantly, the business benefits—including cash, operating income, and sales—far exceeded expectations, proving that when Six Sigma is transformed from a peripheral initiative into a core leadership competency, it can drive significant and sustainable performance improvements.