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Advocating Six Sigma: Its Essence and Boundaries
To commence, I wish to clarify: my aversion is not towards management or managers, but towards the hierarchical command-and-control structure dominating the organizational system. Despite this, I acknowledge the instrumental role businesses, powered by such managerial structures, have played in enhancing the welfare of humanity through notable innovations across medicine, agriculture, housing, and more.
The future of businesses, in my opinion, might lean towards complex adaptive systems where individuals willingly cooperate, influenced by a beneficial incentive structure, as opposed to a command-based system. It’s a vision I delve into in my book, The End of Management (Atlantis Publishing, 1999).
Despite the utopian tint of my views, the imperative of managing organizations well cannot be dismissed. Organizations offer an advantageous setting to reallocate resources without intricate contract negotiations or formal asset transfer, eliminating the need for legal intermediaries. This ease of operation also extends to satisfying their ‘owner’ constituencies such as shareholders for businesses or contributors for non-profit organizations.
Furthermore, organizations cater to ‘customer’ constituencies. Businesses must generate products and services that consumers desire and willingly purchase, whereas non-profit organizations must cater to contributors’ interests that often benefit others. The common denominator, though, is value creation, requiring the output to hold a higher value than the input resources used. Effectiveness corresponds to the degree of constituency satisfaction, while efficiency relates to value creation with minimum resources. Evaluations of such effectiveness and efficiency guide boards of directors in their decision-making.
This is where Six Sigma makes its entry, serving as a tool to maximize value creation while minimizing resource usage by rationalizing management processes. Implementing Six Sigma’s define-measure-analyze-improve-control approach helps improve process efficiency and effectiveness. It further helps in designing new effective and efficient processes, should the existing ones be unsuitable or non-existent. While Six Sigma cannot entirely eliminate organizational politics, it significantly reduces its adverse effects.
However, it is crucial to acknowledge that Six Sigma is neither a cure-all solution nor a simplistic tool. Several companies have successfully integrated Six Sigma, yet failures, like Motorola – the inventors of Six Sigma, are also present. A successful business requires more than just Six Sigma, it necessitates radical innovation, robust financial management, and a vigilant understanding of external changes.
Six Sigma is undoubtedly beneficial for improving certain organizational aspects, but recognizing its limitations and appropriately exploiting its strengths falls under the purview of senior leadership. Overemphasis on Six Sigma while neglecting other crucial factors can potentially put the organization at risk.
Embracing Six Sigma in a traditional organization can indeed create a seismic shift. It will challenge your deepest assumptions, transform conventional methods, and introduce new roles such as ‘belts’ in your organization. These ‘belts’ will scrutinize data, discover inefficiencies, and enable improvements in unexpected areas. Graphical reports with new terms like “control limits” and “process mean” will replace old reports. Your future in the organization might become contingent on your Six Sigma ‘belt’ training.
Proper deployment of Six Sigma can result in an organization that better serves its owners and customers. It can lead to better compensation and satisfaction for employees, a dynamic and exhilarating work environment, and a culture of constant change. Decisions would then stem from rationality, minimizing the influence of underhand politics.
However, half-hearted implementation of Six Sigma or any improvement initiative results in considerable time and financial loss. The bottom line is: if you’re going to do it, do it right, or not at all.