Strategy FMEA Failure Modes & Effects Analysis

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Question - Where could my plan go wrong?

Answer - We have two tools that address this issue:

1. the Strategy C&E Cause & Effect Matrix, which helps you identify which aspects of your strategy are most critical for you to execute effectively

2. the FMEA Failure Modes & Effects Analysis, which subsequently explores the most critical parts of your plan for why things could go wrong, and either how you could prevent this happening, or how you could take remedial action, or both

Key action points

The Strategy FMEA Failure Modes & Effects Analysis is about bullet-proofing your strategy, using Six Sigma tools, to ensure that either it will be delivered as planned, or that you have a ready solution for the critical areas that are most likely to run off the tracks.

It therefore follows on from the Strategy Cause & Effect Matrix which identifies those parts of your strategy that are most critical to its success.

The Strategy FMEA Failure Modes & Effects Analysis tool is designed to help you identify what is most likely to go wrong with the critical areas of your strategy, and what you can do either preventatively or correctively.

We will make no bones about it. Running an FMEA is exceptionally tedious, every Six Sigma consultant will tell you so. We have tried to lighten your load a little by building in defaults you can overwrite, but do not expect a party.

However, trying to recover your ground when your strategy collapses can be pretty tedious too. As they say, the great thing about not planning is that all disasters come as a complete surprise, and you avoid all that agony of anticipating them.

In more detail ......

The principles behind the Six Sigma FMEA are simple enough. You answer five questions:

1. What could go wrong?
2. What is the most likely cause of it going wrong?
3. What is the worst that could happen if it goes wrong?
4. What is most likely to happen if it goes wrong?
5. What can you do to prevent it going wrong, or to mitigate its effects?

Sadly, for each thing that could go wrong, there might be several causes multiplied by several different consequences. This is why an FMEA becomes tedious.

The best solution is to use the Pareto principles of Six Sigma to focus on only the most important causes and consequences.

We have also built in defaults you can overtype.

Having explored the problem, its causes and its consequences, you need to quantify the degree of the problem:

• what is the current overall risk of the most likely consequences? (you can adjust upwards if the worst that could happen is particularly severe)

• what will it cost you to prevent or mitigate the damage?
• what is the overall risk once you have implemented your preventative or mitigating measures?

The system will then calculate:

1. the preventability of the problem
2. the return on investment/effort of preventing the problem

You need to focus on those things which are preventable, and where the ROI on preventing them is high.

You will also keep a close eye on anything where the potential consequences are catastrophic, even if the chances of their happening are small.

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