BusinessWeek has a great article in this week's issue about how Westin is using Sig Sigma to improve both its guest services and internal operations. Six Sigma is usually referred to as a way to drive quality defects out of an assembly line, but Westin bought into the concept more of a way to add discipline to its business in the fiercely competitive hotel game. The process works like this:
- Hotels pitch new ideas to a 14-person Six Sigma Council. "The fight for our resources" - the first example of adding challenge to the process.
- Six Sigma Black Belts test out a prototype of the winning concept. And Green Belts use "E-Tool, a proprietary Web-based system that allows Starwood to monitor a slew of performance metrics to gage the successor failure" of the new project. Rigorous testing is part of Six Sigma, and another way that challenge drives improvement.
- If successful, E-Tool is used to roll-out the innovation to hundreds of new hotels. Each step of the innovation is carefully recorded
Starwood reaps several benefits from this process. Overall the company's net margin is 15% ahead of the Hilton and Marriott corporations, and the projects have generated "tens of millions in revenue." More specifically, a massage program yielded 30% higher revenues, a program to reduce housekeepers' injuries reduced worker claims by 69%, and an energy saving program is expected to save $11 million per year.
The lesson here is that to win with innovation, companies must challenge their thinking along the way. Dreaming up the strategy is the easy 1% of the work, while rigorously testing, refining and executing is the hard 99% that leads to eventual success.
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