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Six Sigma, Innovation and the Story of 3M

Six Sigma is a process which has been praised as a great quality improvement and cost savings tool on a global scale for now over 20 years. Having been invented in the late 1980s by Motorola Corporation it has taken a life of its own in the corporate world. It has even crept into governmental agencies and its uses are growing. The type of thinking that calls upon Six Sigma improvement is structured and can be described as rigid which as we will show in this paper, is not conducive to innovation and creativity thought.

In fact, we believe that because of the drastic difference in problem solving methodologies and general thinking approach that Innovation programs and the mindset which is necessary to be creative will be met with fierce resistance by programs that are very similar to Six Sigma and by professionals who support structured efficiency improvement programs. Therefore, it would behest any Human Resources professional who wishes to be more innovative or to instill that way of life in her/his employees and organization to be familiar with and understand what the opposing forces demand and believe.

To follow then, this paper will provide an overview of Sig Sigma, the role of Six Sigma in stifling innovation and creativity, examples of Six Sigma at work, and will conclude with ideas to include Six Sigma as part of an overall solution to increasing innovation in corporate America.

Introducing Six Sigma

Six Sigma can be described as a quality philosophy or management tool that eliminates waste and reduces mistakes (Inman) in any given process, system or product. It was invented by a Motorola plant and subsequently developed into a full-fledged management philosophy that includes its own distinct structure and supporting mechanism. That Mechanism exists in familiar words such as Green Belt, Black Belt and Master Black Belt.

The Greek Letter Sigma (σ) is not a new term but is a letter usually used in the study of statistics to describe the variance of a sample. Variance can be described as a measure of “spread” or how far apart a set of data points are (generally) to give the researcher an idea of what the entire sample consists of.

In the case of Six Sigma the objective is to reduce the system’s variance and failure rate so that only 3.4 errors are made per Million attempts or transactions. To illustrate, let us consider an employment verification process. To simplify lets us assume that this particular employer verifies the employment of its new hires by calling their former employer and asking them to fax a form notifying them that the employee in question was, in fact, an employee between specific dates. However, due to the large amounts of calls, faxes and candidates that have been hired by this new employer, breakdown occurs in the process.

he breakdowns or “errors” eventually results in the hiring of employees that should not have been hired because they falsified their employment history. The original flaw was that the employer did not consider the large volume of candidates they would be accepting and the process was left to a single HR Administrator who simply could not keep up with the demand, and chose to cut corners, missed a few things and began to engage in selective verification because of system’s inability to keep up with the demand.

Later, an employee is accused of stealing company property. In the investigation it is revealed that the employee had falsified her/his resume. From this example you can see how a single failure of process can cause damage to an organization. A Six Sigma process (theoretically) would allow roughly 3 of these types of mistakes in every million new hires. Most organizations usually do not reach a size where a million hires are even remotely approached. So for all practical purposes, error can be eliminated (again in theory).

Six Sigma makes these improvements through the use of a structured approach where defining, measuring, analyzing, improving, and controlling are key steps to achieving a high quality process. However, through the use of a structured approach that requires a very specific way of thinking and doing, it is very possible that innovation and creativity can be stifled and there is evidence to show this.

Six Sigma, Innovation and Creativity

Six Sigma, Innovation, and the notion of creativity can be hard concepts to compare and understand.

Innovation and creativity requires drastic and large changes to achieve its objectives. Authors such as Daniel Pink, Franz Johansson, Michael Michalko, and Scott Paige essentially discuss methods and ideas that help us achieve this. None of these authors (necessarily) believe that incremental improvements can be called Innovation. However, they all discuss different ideas where Innovation can, may, or will be present under ideal conditions. However, it is apparent that they all share a key idea: Innovation is related to our ability to free our minds and not to restrict them.

Intuitively most professionals can relate to this idea- Structure does not yield Innovation and rigidity does not allow individuals to be creative. However, Six Sigma is a structured approach to achieving measurable improvements within defined scopes to specific problems deemed important by an organization. Six Sigma epitomizes structure; so how then can Six Sigma (in its current form) be anything but counterproductive to Innovation and Creativity?

Traditionally, “Don’t think outside the box. Think inside the box, but as close as you want to the edges” is the message from an incremental improvement technique. Innovation is about revolutionary concepts (which can be followed by incremental improvements) (Johansson) and according to several authors cannot be successfully accomplished through the use of incremental thinking techniques.

Some methods require a re-defining of the problem (Paige) and some require the creation of an environment that allows innovation to flourish (Johansson), but the common theme in most of these methods is that Innovation usually requires major change and not an incremental one.

The Case of 3M

3M, a Minnesota-based global innovation technology company is widely recognized as a leader in innovative products from a multitude of disciplines.  It is widely accepted that with the hiring of a new CEO (Mcnerney) in 2002, 3M gained valuable efficiency improvements, but slowed its internal innovation and creativity. From this we provide case study that agrees with the premise that structure without built-in outlets and processes for innovation can cause long-term negative effects. It would be wise to note that one of 3M’s trademarks is “Innovative technology for a changing world”.

From an efficiency perspective 3M was hindered by a loose corporate structure, overspending, multiple people for the same job and crippling politics. McNerney was brought in as a new CEO in 2002.

“While Six Sigma was invented as a way to improve quality, its main value to corporations now clearly is its ability to save time and money. McNerney arrived at a company that had been criticized for throwing cash at problems. In his first full year, he slashed capital expenditures 22%, from $980 million to $763 million, and 11% more to a trough of $677 million in 2003. As a percentage of sales, capital expenditures dropped from 6.1% in 2001 to just 3.7% in 2003”.

While slashing costs and making efficiency and productivity the ultimate goal of the organization, as well as implementing DFSS (Design for Six Sigma), a design phase version of Six Sigma into the Research and Development Process Mcnerney, made the organization less flexible and more rigid in the long run.

This was seen in 3M’s loss of innovation rankings as judged by outside entities and by their reduction in revenue from new products from 33% of revenue from products created in the last 5 years to roughly 20%.

Later, McNerney left the organization (and joined Honeywell) and a new CEO (George Buckley) was chosen to replace him. Buckley felt that a new approach was to be taken. He increased the Research and Development budget, restored morale for 3M’s innovative spirit, but more importantly Buckley removed the six sigma requirements from his research and development divisions and gave them more freedom to pursue innovative ideas again.

He allowed diversity of thought to return again. Many authors (such as Franz Johansson and Scott Paige) suggest that diversity of thought and approach are essential to creating an interactive and creative environment. However, my personal critique of Buckley’s strategy is that innovation seems to be an event that occurs from individuals who have a reason to innovate or are in a position to innovate. I would even propose that the reasons for creative and innovative inventions are as many as the inventions themselves.

Individuals in the Research and Development division of 3M are in a position to innovate but are they in need of innovation? Does the popular proverb “necessity is the mother of all invention” apply? It is my personal experience that some of the most important inventions and innovations are made by people on the ground level in the corporate world and it is usually because they are the ones who need the new inventions. It is clear to most professionals that restricting innovation to one particular division or another sends a message similar to “you there may innovate in the red chair, but not you in the blue chair”. What if the blue chaired individual is the one who has the maximum probability of creating the innovation? Do we restrict her/him simply because they are not working for the right section of an organization?

The new method of removing Six Sigma requirement from Research and Development worked however. Sometimes imperfect systems can still yield good results as long as implementation is excellent. To add, a recently rugged organization like 3M made hungry for innovation by years of Six Sigma creative starvation, and with increased morale and hope for the future has been able to somewhat come back from a group-think Six Sigma mentality.

Buckley’s options were limited. No shareholder would ever agree to giving back billions of dollars in savings resulting from a  proven structured method like Six Sigma in favor of an “increase in general innovation and creativity”. Markets are driven by hard evidence and data (and sometimes speculation based on those numbers and data) and innovation is a factor that is difficult if not impossible to measure and even more difficult to connect to the bottom line.

Any new ideas of creating Innovation in an organization must then be acceptable to the left brain world of programs like Six Sigma if we are realistic about inducing creativity in the workplace.

Thoughts and Ideas

During my research of the subject I began to question the ability of any efficiency or quality program to capture both the total change state of an innovation program with the quality and structure methodologies of a Six Sigma-Type program. My research has yielded no definitive answers thus far. However, I did come across some ideas that have allowed me to create my own “what ifs”.

What if it possible to create a hybrid model that allows a constant re-defining of issues based on the two methods of thinking; A program that takes structured-thinking individuals and “mixes” them with free thinking ones and vice versa. Where a problem is defined in the scope of an incremental improvement program and then re-defined in a new form for an innovation program.

The process itself should not be symmetrical because no organization can maintain a balance of innovation versus a structured improvement technique perfectly, because innovation is a factor that is not measurable directly.

Therefore, an organization will most likely be going through cycles of greater innovation and then greater incremental improvement. This means that the overall process used to govern this change must be designed to be weighted towards one way and then the other, in a constant attempt to create a balance between the two.  One possible program that could accomplish this task is one which I have illustrated by the process diagram below, and which (in the spirit of free thinking) I will leave to the reader to interpret fully.

Final Thoughts

Innovation, creativity, incremental improvement, structured quality philosophies and many other tools that business employs to achieve any desired objective always come back to a single core principle: People (bold added for emphasis) are the greatest assets of any organization.

And whether left-brained people or right-brained people end up ruling the world remains to be seen, but it seems that a balance of the two is necessary.

In the same way that any new revolution must evolve to take its final form (like the computer or the airplane) and then be replaced by a new revolution (like the Quantum Computer or the Anti-Gravity Ship) which also must evolve; Our own ability to innovate, then improve, then create then perfect should be brought into the workplace.

Although I do not possess evidence to prove this currently, I believe that an equilibrium of Corporate Evolution and Corporate Revolution is the path of choice for the future.

About The Author
Jophelias - Seer of Wisdom
The Main Seer.
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