Six Sigma vs Innnovation

A recent article in BusinessWeek profiled 3M’s experience with Six Sigma, and raises some intriguing questions :

McNerney was the first outsider to lead the insular St. Paul company in its 100-year history. He had barely stepped off the plane before he announced he would change the DNA of the place. His playbook was vintage GE. McNerney axed 8,000 workers (about 11% of the workforce), intensified the performance-review process, and tightened the purse strings at a company that had become a profligate spender. He also imported GE’s vaunted Six Sigma program — series of management techniques designed to decrease production defects and increase efficiency.

Could Six Sigma and Innovation go hand in hand?  Would it ever work?!

Thousands of staffers became trained as Six Sigma “black belts.” The plan appeared to work: McNerney jolted 3M’s moribund stock back to life and won accolades for bringing discipline to an organization that had become unwieldy, erratic, and sluggish.

Then, four and a half years after arriving, McNerney abruptly left for a bigger opportunity, the top job at Boeing. Now his successors face a challenging question: whether the relentless emphasis on efficiency had made 3M a less creative company. That’s a vitally important issue for a company whose very identity is built on innovation.

Efficiency programs such as Six Sigma are designed to identify problems in work processes — and then use rigorous measurement to reduce variation and eliminate defects. When these types of initiatives become ingrained in a company’s culture, as they did at 3M, creativity can easily get squelched. After all, a breakthrough innovation is something that challenges existing procedures and norms.

I don’t believe Six Sigma is a cure-all, any more than the next chap.  So, I do think it would be a bad idea to get a bunch of PhDs or innovators and attempt to remove all traces of “variation” from their worlds, using Six Sigma methodologies!  But, I also think there is room for both Six Sigma and Innovation to flourish side-by-side.

I have been an admirer of 3M since as long as I can remember.  3M stands for “Innovation”.  It’s that simple.  And, innovation does not come about through standardized processes.  But there’s gotta be more to a 100-plus-year-old “mining” company and its portfolio of 60,000-strong product portfolio, than simply locking yourself in a room and coming up with the BIG idea, isn’t it?

Like any business that operates on that scale, 3M operations would involve hundreds of processes that can be optimized by improving throughput ratios, increasing efficiencies, reducing turnaround times and saving costs.  Attrition of Employees, Turnaround time of Product-to-Market, Supply chains from Intermediary suppliers, and Operational Costs incurred on Stationary or Communication are only some examples that come to mind. 

Six Sigma could potentially help improve efficiencies in all these areas and more, leaving the “creative” types and the organization’s R&D labs to do what they do best without worrying about salary cuts or decreasing shareholder value. 

Now, wouldn’t that be something?

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