Six Sigma is so versatile that it can be used across a variety of industries and fields. It is also flexible enough to use to manage personal finances. Six Sigma is such a dynamic methodology that companies have saved hundreds of millions of dollars.
You may not be able to save that much in your personal finances, but Six Sigma will definitely bring clarity to your finances. This methodology will also help private individuals reduce their wastage and increase their savings.
Company to Private Conversion of Six Sigma
Peter Peterka is a managing partner at 6sigma.us and consistently advises on the opportunities inherent in the Six Sigma methodology. This technique is so powerful that is has been successfully applied in large and small businesses, and is also suited to creating positive changes in the lives of private people.
Due to size differences, a conversion is needed to make Six Sigma practical for application in private use, but it is viable. By simply applying the DMAIC process to begin with, individuals can make highly positive changes to the way they manage their personal finances.
The define phase in DMAIC
The define phase in DMAIC requires the individual to determine what the problem is. The person must record this problem in a clear statement that fully explains what the problem is. This problem statement must be followed by writing down what goal you wish to achieve.
When defining the goal, the timeline within which to achieve this goal must also be very clearly recorded. The last step in this phase is to clarify why achievement of this goal is so important to you.
The measure phase in DMAIC
Goals are not worth aiming towards if there is no way to measure progress. The same concept applies to using the DMAIC steps in the Six Sigma process. The individual should collect data on an ongoing basis to establish what led to the current problem being experienced.
All of the contributing factors that led to the present outcome should be identified through the data collection exercise. The obvious reasons why personal financial management are necessary can be that no budget was ever put in place. Or, the budget was developed but was never adhered to.
The analysis step of DMAIC
This stage may be more problematic because the problem consists of a superficial and deep-rooted cause. Revert to the measure stage to establish why you do not have enough money. If you don’t have enough money because of overspending or not sticking to the budget, then you need to analyze why this is the case.
If you spend too much because of impulsive purchases linked to a bad day emotionally, you need to clarify what causes those bad days. Once that is done, you will have determined a root cause of your problem.
The improve step in DMAIC
Think of creative ways to overcome the root cause or causes that you have identified. You may devise one or five potential solutions to overcome the root cause or causes.
Once you have done that, you will need to test each solution to see which will work the best. This is a process of continuous improvement that will need commitment, dedication and discipline. The results will be worth the effort when you achieve your desired success.
The control part of DMAIC
This is a time to exercise patience and tolerance with yourself. Some solutions may have worked well over a short time but proved to be unsustainable over a longer period.
Now is not the time to give up but to forge ahead with alternatives that you test until you find one or more that are sustainable. Continuous improvement is key, backed by strong intentions and never taking your eye off the final goal.
