SAS Software Billionaire John Sall on Six Sigma

SAS software billionaire Sall on Six Sigma and the economic recovery: Big Brain Week continues – Burns on Business.

You would expect John Sall of SAS Institute to embrace the statistical approach. But he goes beyond merely giving a nod to the quality movement and Six Sigma. “The quality movement really changed the world…because of the appreciation for using data and measurement to show cost savings and revenue enhancements.” Said Sall. “Before Six Sigma, you were proving you were watching things rather than figuring out what you should do.”

In other words, you went from focusing on results to understanding what drove those results. This is, I believe, a critical distinction that is lost on most business schools. Business schools must teach aspiring managers all about command-and-control systems, guided by “results.” In my opinion you can’t figure out what needs to be done merely by watching results. Results tell you nothing about causes. They are effects. They are the Y in a transfer function that links them to causes and a process. The process is the set of actions that links the inputs and causes to the results. Business schools and accounting systems can not teach a business leader about these relationships.

Sall doesn’t promote Six Sigma. In fact, he seems to dismiss it. “As a brand, Six Sigma is not as strong. It overpromised. The brand will fade.” No doubt. Brands always fade, eventually. Still, as a brand Six Sigma has outlasted nearly all other contenders. SPC, TQM, Reengineering and many more have come and gone while Six Sigma remains. But it’s not about the staying power of the Six Sigma brand. John Sall sees it as analyzing data and experimentation. I believe that it’s about something deeper than this. It’s about understanding cause-and-effect. Statistical analysis helps with this, as does experimentation. But there’s another ingredient that isn’t emphasized nearly as much as it needs to be: thinking.

Thinking is a process of integrating new facts with all existing knowledge. It is a profoundly individual activity. Business schools act as if a leader can effectively lead by using command-driven management to direct activities and using results as feedback. This approach leads to superstitious learning and management actions that are based on trial-and-error . This approach is largely responsible for the failure of many formerly great enterprises.

Ultimately, management is not about Six Sigma, quality, analyzing data, or experimentation. It’s about knowing how to create and deliver consistent, long-term value for all stakeholders. These other things are tools to help managers figure out how to do this well.