Business Week Gets Six Sigma Wrong

This week I’m in Reno at the Institute of Management Consultant’s Conference, Confab. I really like sticking my nose in a wide variety of places to see what I can bring to our work. Doing that has led me to meet a variety of insightful people.

It has also led me to places where people were doing things that didn’t make much sense. This week’s article is about such a discovery: Business Week’s June 11 cover story on the role of Six Sigma in 3M’s difficulties is a case in point.

The Six Sigma industry has great tools to offer and a tough row to hoe. Unfortunately, they have made it tougher on themselves than they should have. The real value of this was the dozens of insightful comments from Business Week’s readers, most of who agree with me!

Michael J. Webb
October 30, 2007
www.salesperformance.com

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Business Week Gets Six Sigma Wrong

Earlier this year, Business Week published two articles that claimed Six Sigma was “so yesterday” and that it was harmful to 3M’s ability to innovate.

Unfortunately, the article advanced a number of misperceptions. Not only did Business Week get it wrong, but judging by the comments people posted on BW’s website, Business Week’s own readers disagreed with them as well.

Of the comments that took a position on Six Sigma (some focused on other issues), the majority disagreed with Business Week about Six Sigma:

Article Title               Disagreed with BW  Agreed with BW
“At 3M, a Struggle Between         40                        16
Efficiency and Creativity”

“Six Sigma, So Yesterday”          23                         16

It is too bad that Business Week is confused about this subject. However, their readers had some great insights that are worth distilling and thinking about carefully. I have summarized some of the more telling points below, beginning with the comments that were critical of Six Sigma.

“I Did It and It Didn’t Work”
Several critical comments were from people who had participated in some flavor of Six Sigma training or project. (Some quotes have been edited for length.)

• “Once worked for a GE vendor. Believe me, GE was the worst customer to work for because of the insistence on mandatory Green Belt certification. So dudes conjured up savings and everything was forgotten after the certification. Six Sigma ended up being an overhead and actually sucked up valuable resources into unproductive activities.”
• “One problem with Six Sigma at Black and Decker was that there were too many presentations for all these Six Sigma Black belts and Master Black belts. We had to either: 1)Change the format of the presentation, because this was always changing. 2) Re-do the calculations for correct use of the 'tools.' 3) Go back again and do another gauge R&R, that wasn't quite done right. Even though you saved some  money, the presentations seemed a lot more important than doing your job.”
• “Implementation of Six Sigma in our company has been about as successful as the Soviet era five year plans. It is managed by bureaucrats who are completely inflexible and openly hostile to the challenge of a creative thought process. It becomes its own Raison d'etre with its victims siphoned off from useful employment in order to work on Six Sigma promotions and presentations with no thought given to  some final finished product.”
• “We were working as IT consultants as GE and Six Sigma were literally forced down our throats. We got data from a screwed up project, suggested some imaginary changes and on paper improved productivity (slogged without accounting for the extra hours), reduced the bug count (did not file bugs and fixed it without filing). Six Sigma is crap.”

Given these stories, who could blame these people? Why these things happen should be the subject of a different article, but they are certainly not the hallmark of good Six Sigma implementations.

Article continued below

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How to Turn Your Sales and Marketing Into a Lean Six Sigma Production Machine That Runs Like Clockwork (And Do It in a Way Your Salespeople Will Love! https://www.salesperformance.com/ExecBriefing.aspx
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Six Sigma vs Innovation
A number of comments dealt head-on with Business Week’s primary contention: that Six Sigma somehow prevented innovation at 3M and other companies where it has been applied.

• “Take care not to bash Six Sigma-the problem is not with the methodology itself but rather with how it is applied. … If managed effectively, Six Sigma can absolutely co-exist with innovation!”
• “… be careful not to toss the baby with the bath water. After all, it's no secret that the primary driver behind Japan's emergence as the number 1 automaker has to do with elimination of variation and achieving highly repeatable processes. I guess Toyota and Lexus' innovation IS in the area of passionate pursuit of perfection.”
• “[This] article … may mislead readers into thinking Six Sigma concepts suppress innovation when that is not the case. Innovation is suppressed when the culture becomes risk averse. When employees are recognized and rewarded based on how much money they save the company, they will naturally divert their attention from new product innovation to process innovation.”
• “I worked there for over 35 years. I have designed, developed and patented over 30 products for 3M. The change started long before Big MC. The change came when 3M started to value education more than results.”
• “When Motorola practiced Six Sigma under the leadership of Bob Galvin (Chairman) and George Fisher (CEO) in the late 80s, Six Sigma produced significant savings and produced innovative products. Let's not kill a sound methodology due to lack of understanding of its basic tenets, which are dramatic improvement, innovation, and shared savings. Actually, Six Sigma accelerates improvement requiring
  instead of curbing innovation.”
• “Having deployed Design for Six Sigma at 3M for two years, Ifind this article typical of corporate wind changing.  [Someone] concluded that Post-its never would have been made, yet when I was there the analysis I saw said they could've come to market seven years sooner with [stage] gates and tools to identify winners. … it took nearly 10 years of skunk-works by Mr. Andy Wong and his teams to bring brightness enhancement films (which enabled LCD panel technology) to market. As an observer, I cannot comment on how many projects should have been killed because they had little value, and how many great projects were stifled for the 'not invented here' politics that 3M breeds. How many other inventions, perhaps even more innovative were not brought to market successfully because their inventors did not have the skills of Mr. Wong or Mr. Fry to outlast [pre-Six Sigma] management?”

Corporate Snake Oil
It is unfortunate that the Six Sigma industry is not so good at demonstrating its value to the layman. It is also unfortunate that tools of such power get misapplied-and then blamed-for bad results. Some of the criticisms of Six Sigma at the corporate level are worth hearing:

• “It's nice when a mainstream publication points out what many business thinkers have known for years-6 Sigma, like its many management-style predecessors, is essentially corporate snake-oil. … We bought lots of product from 3M, but suddenly, the hoops the sales people had to jump through to do their job became embarrassing, and frankly hurt their sales and their industry reputation.”
• "As a former executive turned teacher of statistics, organizational behavior and strategy, I can count on getting a rise out of my adult MBA students when I mention Six Sigma. They have all been through the "Let's do Six Sigma" routine-the blind application of it as if it were a panacea.”

Even this college professor said, “The issue here is not whether Six Sigma is worthwhile, it is whether or not it is applied correctly.” Unfortunately, there is much evidence throughout the readers’ comments that many Six Sigma initiatives are poorly implemented. And, there are even some clues regarding why:

• “Six Sigma isn't a panacea, but it isn't fluff either. Ihave used it/seen it solve chronic problems that organizations had struggled with for decades. We never strived for Six Sigma quality levels in our processes, but by improving some key processes by one sigma level, we have saved several million dollars (real, audited results) over the last three years. By the way, there are some important   processes that meet or exceed Six Sigma process levels. People would stop flying if take-off and landing process in the U.S. didn't exceed Six Sigma levels.”
• “I was once part of a Six Sigma culture at Honeywell, formerly AlliedSignal. Our Chairman at the time, Larry Bossidy, is another former GE Jack Welch Disciple. Difference between him and those other guys is he did get the results. Larry also was staunch about going full guns on Six Sigma. Quite frankly, it did make a difference in our culture, but we could have called it anything, and selectively used specific Six Sigma Tools for specific situations and business problems that warranted them.

Conclusions
Often facts are a scarce commodity in an organization. Six Sigma is a set of powerful tools for identifying them.This can help distinguish innovations that work from those that don’t, which is a key ability for successful companies.

The Six Sigma community may need to improve its abilities in some areas. For example:

• Strengthen its public relations with more and simpler stories illustrating the value of its principles.
• Stop pushing methodologies “down people’s throats.” This automatically generates resistance. It is much better to help people solve problems than force them to regurgitate a methodology.
• Get away from “Six Sigma Aristocracy” where Six Sigma departments enforce their own rules that have little to do with making the business better. The point is to infuse the culture with more rational and productive practices, not perpetuate the department.

I’ve heard some interesting stories at Six Sigma conferences where companies have had to relaunch their Six Sigma initiatives (often under different names) because the old-fashioned method of sheep-dipping people in advanced statistics classes didn’t work so well. When people were given simple tools to solve real business problems instead, they achieved much better results. In fact, employees in large numbers came back requesting more advanced training.

One final comment from the Business Week site is worth closing on:

• “Having deployed Six Sigma in various forms for eight years I can only say that when it works, it works because of executive leadership. When it fails, it fails for lack of leadership and commitment to face the root problems of a  business."
• “Six Sigma is just a collection of tools in a TQM environment. To blame a method that employs 'tried and true tools' for failure is an attempt to divert people’s attention from the real culprit.”

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Michael J. Webb
October 30, 2007
www.salesperformance.com

Comments

[R. Wayne]

Celebration of a New Groundbreaking and Revolutionary Lean Six Sigma Book

TPS-Lean Six Sigma
Linking Human Capital to Lean Six Sigma
A New Blueprint for Creating High Performance Companies

By Hubert Rampersad & Anwar El-Homsi (publication by Information Age Publishing Inc., North Carolina)

A new blueprint for addressing the primary concerns of manufacturing and service in a more sustainable and humanized way is urgently needed, whereby personal and organizational performance, and learning mutually reinforce each other and create a stable basis for a high performance company. Traditional business management concepts are insufficiently committed to learning, and rarely take the specific personal ambitions of employees into account. In consequence, there are many superficial improvements, marked by temporary and cosmetic changes, which are coupled with failing projects that lack engaged personnel. This new book emphasizes the introduction of this new blueprint, called TPS-Lean Six Sigma. This model entails the integration of Total Performance Scorecard and Lean Six Sigma. TPS-Lean Six Sigma and the related new tools provide an excellent and innovative framework for creating a high performance culture and a sustainable breakthrough in both the manufacturing and service industries.

TPS-Lean Six Sigma is like a ‘turbo-charged’ Lean Six Sigma program. All of the proven, sound methodologies of traditional Lean Six Sigma are charged with highly motivated team members. The result is a powerful people driven Lean Six Sigma program called TPS-Lean Six Sigma that leads to a High Performance Culture and allows employees to realize their full potential and contribute creatively while the organization benefits from increased profitability, market share, and customer satisfaction. TPS-Lean Six Sigma is the perfect marriage of Lean Six Sigma and the Total Performance Scorecard. With TPS-Lean Six Sigma, your business, your customer, and your employee’s personal goals are all realized in concert with each other. By integrating human capital into the Lean Six Sigma equation, organizations have the opportunity for exponential, quantum levels of improvement and success. Your customers will be happy, shareholders will be happy, management will be happy, employees will be happy, processes will be optimized, waste will be eliminated, and profits will soar. It is quite possible that now, with TPS-Lean Six Sigma, we actually have reached nirvana. By way of this book, Hubert Rampersad & Anwar El-Homsi are launching a revolutionary, holistic concept called TPS-Lean Six Sigma which actively has human capital embedded in Lean Six Sigma in a manner that not only stimulates commitment, integrity, work-life balance, passion, enjoyment at work and employee engagement but also stimulates individual and team learning in order to develop a motivated workforce and sustainable performance improvement and quality enhancement for the organization.

MISSING LINKS IN LEAN SIX SIGMA

We have been deploying Lean Six Sigma for over the past five years. What we found is that while Lean Six Sigma does a great job addressing the primary concerns of manufacturing and service, there was something missing, something to keep the momentum going. That something is Human Capital. That’s right, Lean Six Sigma primarily addresses quality issues, manufacturing issues, transactional issues, customer issues, speed and variability issues. However, unless your organization is run by robots, you still need people to make it all work. There was nothing in Lean Six Sigma that systematically addresses the very real needs of the people who are the heart and soul of any business. Total Performance Scorecard Lean Six Sigma (TPS-Lean Six Sigma) is the only program of its kind that incorporates the element of Human Capital as a structured part of a Lean Six Sigma program. Let’s face it - you can design the best Lean Six Sigma program in the world, but if the people running it and working within it are not happy themselves, how effective do you think the program will be? Let’s consider the corollary - what if you had employees that are highly motivated running your Lean Six Sigma initiative? Wouldn’t that be the best approach? Would you have to force feed the program to your employees, or will they grab on and move the program along even further then originally envisioned? That is what the authors have included in detail in this book and in their related workshops; How to design, develop, and implement the most powerful Lean Six Sigma program in the world, TPS-Lean Six Sigma. They have combined all the powerful tools and methodologies of Lean and Six Sigma with personal power optimization of the Total Performance Scorecard. The result is a breakthrough program that increases speed, reduces waste, motivates the workforce, satisfies customers, and drives up profit. See below how based on this revolutionary concept quality has evolved from inspection to TPS-Lean Six Sigma.

TPS-Lean Six Sigma Inc.
144 Village Landing #303
Fairport, NY 14450
Voice: 585-750-8203
Fax: 585-425-8931
E-mail: info@TPS-LeanSixSigma.com
www.TPS-LeanSixSigma.com

[Dr. Ravi Pandey]

Attached is also an article in development and copyrighted by biproinc(www.biproinc.com).

I would definitely like to hear some comment.
rgds
-ravi
______________________________
A Look Back on Six Sigma
Dr. Ravi Pandey

Six Sigma, currently purported as the magic button for solving most of the corporate ills, was started as quality program in Motorola. Over the time it had had some good and bad days, till Jack Welch, then chairman of GE decided to make it a corporate initiative in 1995. Who does not want to follow GE! A significant amount of corporations since then have adapted Six Sigma. Some admitted success and some struggled with it.

Whether Six Sigma really helped or not is a question of who you talk to. It certainly spawned a very strong job growth. Just the iSixSigma website lists about 100 consultants which certainly is not a complete list. However, majority of the job growth happened within the organizations. There is whole chain of Six Sigma professionals in the companies ranging from Vice President to Black Belt. While I would not go into the details of the number, but think of this that one of the ten billion dollars business that I worked with had over 20 MBBs and over 200 BBs. (MBB and BB are Six Sigma professionals chartered to lead improvement projects). Looking at just the size of US economy, you can scale the above number to provide you with a reasonable estimate of the job creation due to Six Sigma. As for as the financial benefits due to Six Sigma are concerned, the annual reports generally overstate it significantly. You can swing a business case by large margin. That speaks of the credibility and the robustness of business case development.

Six Sigma certainly did a lot of good for the companies. I personally think that the biggest benefit has been that it drove numerical discussions, albeit upon time to a degree of fault. It also created benchmarking of the processes and hence educated people around on the execution methods of tasks and standardization of the methods. Six Sigma brought in statistics into design and operations. In earlier times, we did not have enough knowledge of the cause and effect relationships. Most of the work went on to develop these nominal relationships. It was natural progression to start looking into the variances of inputs and processes, and hence the outputs into the decision-makings. This helped reduce the large factors of safety that were being introduced due to the lack of clear knowledge. Make no mistake that still a majority of the companies including those in high technology arenas use nominal information in conjunction with factor of safety. But there is no doubt that Six Sigma has created the discussion around statistical decision making. Reduction in margins has direct impact on saving of material, time, and productivity.

Six Sigma also is closing gap that academic institutions have not been able to impart during the educational periods. When I talk to my 8 years old, she can solve most of the problems. Her challenge comes when you ask her to explain how she did it. I have seen in textbooks they encourage problem-solving methods even at third grade level. So, it is quite interesting that even after college degrees, we have to teach people on problem solving methods, on Six Sigma. In my experience of over 15 years, I have seen this need for educating associates in structured problem solving in corporate as well as in the university classrooms.

So with all these positives, where are the challenges, if there are any? Are the corporate metrics really saying what they should be? I use to ask the consultants when I was not one, “if I give you the best people to work on a topic, they are going to solve problems with or without Six Sigma; where is the benefit of Six Sigma”. The benefits being reported are not due to Six Sigma but are due to the high-class workforce assigned to it. A true benefit of Six Sigma would be credible if you create a trend of employee contribution in per capita revenue or profit generation as a function of skill/capability level. Comparing that curve of per capita revenue distribution before and after Six Sigma implementation will be a better validation of the value of Six Sigma. In fact the variability in the Six Sigma performance from company to company as well as from group to group is based upon whether the best joined the Six Sigma program or not, whether the coaching and mentoring was provided properly or not.

I once had an opportunity to analyze product non-conformance for a multibillion-dollar business. It was amazing to see the chronological distribution did not show much change over 10 years period of analysis. This is while all believed that things have gotten better over time. I would not attribute this to Six Sigma or lack of it. I, however, would definitely suggest that it has to do with logical decision-making. I do not think that anyone had looked at long-term trend before this. By the way, I had used control charts to create non-conformance groupings as well as convince the executive leadership of need to do things differently as nothing has improved over these years.

The coaching and mentoring, and in fact to some extent even teaching has been less than phenomenal. I recall once a consultant from one of the well respected consulting company tell me that he had years of Design for Six Sigma experience including with GE. When I started pressing for the type of work, he finally admitted that his total experience was facilitation of a QFD session. More often than not, these are the type of people who are leading the training and coaching efforts. No wonder, the success of Six Sigma has been mixed. In another case, they tried to convince me the value of DFSS. I asked them how many products they have designed. Answer was obviously none. I offered them that I will give them contract if they can guarantee what they are selling as benefit. Well! They never even quoted after that. My thinking was if you were so good and so confident, why would you not commit contractually.

We have the blinds leading the blinds. We are giving people on the name of Black Belt power to make changes while their capability on leadership as well as process/technology is immature. The trouble is that they have neither capability nor proper mentorship to bring the capability. I am not sure if these black belts are getting the justice of being told that they are the best and later only to find out that their capabilities do not go much more beyond the ability to process map. But for that, you can hire few high school students. The famous adage “you do not know what you do not know”. So the Six Sigma professional are being told they are the best without them even knowing what is the criteria for best. Certifications are not about Six Sigma. They are more geared towards the knowledge of industrial engineering and statistics.

I am wondering if universities should create a curriculum more comprehensive for the program. Something more than certification! If Six Sigma has so wide application, it definitely deserves to be brought to the mainstream curriculum.

Bottom line, Six Sigma is and has been a good thing for people, for businesses, and for the economy. We, however, need to focus on the right set of deployment, having the right people, and doing the right way – getting back to basics. Six Sigma was made successful by GE not other way around. GE has the capability to extract the best out of anything and move on. Question is whether you want to become like GE!

[Michael Webb]

Thankyou Ravi for your article. I agree that it is the people that play a huge role in making things successful. Six Sigma is a sort of toolset for being logical. You might say that success requires emotional intelligence, and attention to what is truly valueable to people (especially the customer). These are not appart from logic, of course, but are additional things on which to use logic to integrate our thinking. Six Sigma, unfortunately, seems to simply assume these as context. Your examples seem to show that it isn't.

Michael Webb

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