Monday, 7 June 2010

SixSigma Kills; Lean Kills Absolutely

Lean and 6Sigma are the polar opposites of innovation. They kill it.

The rest of the world is learning to innovate faster and faster, while Lean and 6Sigma organisations find themselves with world-class revels of waste and variation reduction on products and services that the customer doesn’t want anymore.

The world, accelerated by the recent recession, is entering a phase of continuous innovation. A phase that means non-linear, discontinuous, common-sense-shifting change is beginning to happen on a continual basis. Adopt or stick with Lean/6Sigma in such circumstances and don’t expect to get too many plaudits from your shareholders for too long. They see it too. Both were perfect tools for a continuous improvement world; both kill in a continuous innovation world.  As 3M found out a few years ago when they introduced 6Sigma across the company.

If this weren’t bad enough, both Lean and 6Sigma carry with them a virus that makes recovery almost impossible. Both demand cultures in which massive quantities of data are collected. Gathering data is hard work and one of the strongest traits of doing hard work is we don’t like throwing it away. Or thinking it might be the ‘crackpot rigour’ work of ‘busy fools’. So when someone comes along and defies the common sense and says ‘there is no data’ in the non-linear world of innovation the tendency is to not believe them. In this way, the middle management in your organisation lies at the heart of your forthcoming death. They manage (you told them!) by the numbers.

This is not to say that numbers aren’t important. It is to say that numbers are great for optimization, terrible for innovation. And as a result, because we’re in a period of innovation, there is a need to trust the numbers less and be prepared to challenge common-sense more. There was no data to prove the digital camera would be a success. Or the Dyson vacuum cleaner. They succeeded because they were better solutions to the customer’s real problems and there were no figures to worry about. You were busy stripping out the waste in your filter-bag manufacture line and didn’t want to be distracted. Until eventually, dodo-like, you’d stripped out so much ‘waste’ you were unable to even think about whether you were still doing the right thing.

The heart of the problem is this: Common sense changes. The world operates under the universal rules of the S-curve.

The most important characteristic of the curve is the top portion. What’s happening here is organisations are conducting their ‘continuous improvement’ activities and finding themselves subject to ever decreasing returns. More and more effort goes in; less and less improvement comes out. Do Lean or 6Sigma for anything longer than a year, and you’re already feeling the effect.

The phenomenon wouldn’t be so bad if all your competitors were subject to the same rules. Well, fortunately, most of them are because they’re busy playing the same game you are. Unfortunately, one day along will come a competitor (most likely from outside your industry) and play using a different common-sense. They’re the company who, instead of getting themselves stuck optimizing the current way of doing things, innovated and found a new way. Pretty difficult to sell 35mm film in these days of digital SLR cameras, right?

Neither Lean nor 6Sigma allow for these kinds of common-sense breaking s-curve shifts. In actual fact they positively discourage it.

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/6Sigma 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 6Sigma 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 6Sigma.

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 6Sigma benefits. Or rather to a Black Belt working in one of Jack’s improvement teams. Jack’s told you that you’re going to do 6Sigma 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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