Six Sigma kills, Lean kills absolutely
Six Sigma kills
Wednesday 8 September 2010
Darrell Mann

Written by Darrell Mann

Imagine the equivalent of the digital camera or Dyson vacuum cleaner happening in your industry. How would you respond? Imagine another, different jump happening again the year after. And the year after that. Will you still be praising your Lean / Six Sigma teams? Or will you be thinking to yourself, ‘if only we’d recognised that jumps demand different rules and behaviours'?

There’s a final, enormous problem here, of course. Data rules because data allows us to justify our actions. It’s a brave leader indeed who stands up to their masters and says ‘the data says we should zig, but we’re going to zag’. In some organisations it is nigh on career suicide. If only there was some data to prove that data kills.

To even suggest that either Lean or Six Sigma are anything other than good things is little short of heresy in most organisations. Pioneers like GE, Motorola and Toyota have been deploying them for many years now with apparent great success. They are far from dead, so how can we justify a claim that says that either methodology kills?

The underlying philosophy of both is that waste and variation are bad things. Who could argue with that common sense? What CEO or COO is going to argue for more waste? Especially having learned that Jack Welch’s GE, for example, ‘saved $9B’ with Six Sigma.

It’s data that says the data is inherently flawed, and it’s called the Halo Effect. Let’s think about Jack Welch’s $9B worth of Six Sigma benefits. Or rather to a blackbelt working in one of Jack’s improvement teams. Jack’s told you that you’re going to do Six Sigma and, the boss always being right, it is absolutely in your interests to prove him right. So you do the project and go back with the numbers to show how much money you just saved. Fantastic. And amazing what a threat to dismiss the bottom 10% performers can do. But you never did any experiment to compare what you just did with any other way of improving things. Frankly speaking, a dozen different tools or methods could have delivered exactly the same results. Or better. The point being that dictating use of any tool or method inherently carries with it a Halo Effect that dictates success, irrespective of whether there was any or not. Let’s take that thought one step futher; put yourself in Jack Welch’s shoes for a final moment now. You’ve just invested in training tens of thousands of people inside your organisation and you think you’ve created an enormous competitive advantage. Would you now stand up and tell your competitors how you did it? Or, turning the scenario around the other way, would you realise how much time and money you wasted and think to yourself, gee, wouldn’t it be great if I made my competitors waste the same? Or more? Maybe, in fact, I could hype the benefits to such an extent that I could get them to kill themselves before they see the Halo.

Makes you think doesn’t it?

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Comments

Submitted by Anonymous on
I am fascinated by this article! Not least because I currently work in the NHS (a one year newbie after 20 years in the private sector) where in the effort to stop the rot, the NHS is adopting lean and six sigma approaches in the provider (hospital) side of the business and are now beginning to realise that innovation in service delivery is a key tool to effect improvement, change and value for money. The NHS may be where these two can work together and I'd love to hear your views on that. KM Commercial Director North East PCTs

Submitted by Anonymous on
Is lean killing innovation? To me, and I'm drawing from my experience in a very administrative public sector environment, Lean might not generate the breakthrough idea but once you have that idea, it would be folly not to try and produce it as efficiently as possible. The example of 35mm film and digital camera's is deceptive. You are right being the most efficient maker of film in an age of digital cameras does not offer huge rewards, however, neither does being the most inefficient and lowest quality producer of digital cameras. How many companies make digital cameras today? Yes you need to be at the leading edge but dont forget that while a product may feature one or two new innovations and ideas, it often shares hundred of parts from older models, continuous improvement is very relevant for something you are producing for 4 or 5 years. Yes we are in an age of rapid innovation, but Lean has had a hand in creating that age, look at Toyota and in particular its ability to reduce the product development time and therefore the time to introduce new ideas to market. Lean is becoming a standard in many industries because it offers a more efficent and higher quality method of production than mass production methods. That is how companies should look at it, as an industry standard not a differentiator. That is where the innovation plays its part. To ignore lean in favor of mass production techniques leaves you terribly exposed, if you look at the most innovative companies you will see that they all feature a strong Lean footprint in what they do. As with everything in life balance is needed. Lean is a key part of an effective, efficent and high quality company, but only part. Innovation is another part, but again only a part. The most successful companies combine both.

Submitted by Anonymous on
Take a look at Research in Motion who have been extreme proponents of Lean for the past several years. Given some of the most recent technology debacles and wrong-footing in both the Enterprise and consumer space there is no "plan B" to fall back on since that was "Leaned" out of existence. Many RIM insiders are citing that their Lean methodology in keeping R&D close to 6% has precluded their ability to react and adapt rapidly to changing technology and market forces. The long-term financial outlook for RIM is grim at best right now unless they get acquired by a less-lean organization.