Six Sigma and other efficiency seeking approaches can dramatically reduce variance and inefficiency in an organization. But if you’re not careful, innovation and growth may be swept away in the process.
Credit for coining the term “Six Sigma”, the ubiquitous quality improvement model, goes to an engineer named Bill Smith who helped Motorola realize an estimated $16 Billion in savings in the 1980s as a result of standardizing core processes. But the essence of Six Sigma can be traced as far back as 1809, when Carl Frederick Gauss introduced the concept of the normal curve. Why? Six Sigma is effectively a means for identifying and eliminating variance, and companies around the world have built entire cultures upon this foundational concept.
Today, as a result of Six Sigma or similar approaches, many organizations are operating at very high levels of efficiency. But as leaders now shift their focus to the acceleration of growth, they are discovering that the very culture of little to no variance that allowed them to achieve their efficiency goals is suffocating their growth potential. Variance – dare I even say error – is essential for innovation and growth.
Variance is the very characteristic that dictates the rate at which evolution in nature occurs. Consider the countless number of times that your cells divide to make you who you are. Now consider that each time a cell replicates, it must copy and transmit the exact same sequence of 3 billion nucleotides to its daughter cells. Inevitably, errors occur—and much more often than you might expect. Yet it is these errors in DNA replication that have allowed single-cell organisms to evolve into the unimaginably complex beings that we are today.
Now let’s consider an organism that took a different evolutionary path. Neurospora crassa is a species of bread mold that is so averse to variance that whenever a large segment of its DNA gets duplicated – a critical step in genetic evolution – it bombards the copy with what are known as “point mutations” that effectively turn the genetic code into nonsense.
To be sure, the process works: Neurospora has relentlessly protected itself from variation over hundreds of millions of years. Among the designations of mastery for Six Sigma, Neuospora would certainly be considered a “Black Belt”. And yet, Neurospora is still, after all, only a bread mold. As biologist Olivia Judson delicately puts it, “Its use of mutations to defend from variation may have inadvertently blocked off some evolutionary paths.”
Listen to any CEO these days, and at first glance, they would seem to be the opposite of this variation-averse type – leading organizations that are built for innovation and entrepreneurship. But there’s an older, efficiency-driven part of the culture that fights like hell to defend the status quo. As leaders, we court alternative paths and new growth opportunities, but like the Neurospora, the culture quickly wraps around these ambitions and smothers them.
A culture built on the foundation of eliminating variance can have dramatically negative effects on growth and innovation. Experimentation, and the possibility of negative outcomes, becomes taboo. Managers are promoted based on having the right answers, not asking the right questions. Innovators are forced to create “fantasy plans” – with unrealistic and inflexible assumptions – to win approval for their projects. CFOs are paid to kill projects.
Those organizations who have successfully shielded themselves from variation and experimentation – those who have attained literal mastery of Six Sigma, ultimately face the greater risk of bunking up with the Neurospora – inhabiting the same kind of eternal biological status quo.
Eliminating variation in a large organization can be a laudable goal, leading to profit and efficiency. Yet variation is also not an obstacle to steadfastly avoid; it is a key to unlocking your breakthrough future. Success requires embracing the alternative paths that markets randomly present to us in order to find your organization’s own unique place to grow and thrive.
Winning the quarter often requires the elimination of variance, but winning the long game will require embracing it.
Related Source: http://www.forbes.com/sites/ricksmith/2014/06/11/is-six-sigma-killing-your-companys-future/
Thanks for your attention,
John & Partners team.