Magazine

Scrutinizing Six Sigma


We started a lively discussion with our June 11 Cover Story, "3M's Innovation Crisis." Most readers are familiar with 3M Co. (MMM) as a bastion of innovation. Its creative prowess has been celebrated in case studies, books, and our own ranking of the most innovative companies. That's what made 3M such an interesting lens through which to view Six Sigma, the quality improvement process that has swept Corporate America over the past two decades. Under James McNerney, the General Electric Co. (GE) alumnus who led 3M's Six Sigma push, financial performance improved. But 3M's current CEO, George W. Buckley, is dialing back on Six Sigma in an effort to reignite the company's creative spark.

The 3M piece, part of a package in our quarterly IN: Inside Innovation supplement, brought in a bigger-than-usual volume of responses, in reader letters, online comments, and blog posts. A substantial contingent of readers argued that Six Sigma—used properly—can help innovation. More readers, however, suggested that the tensions at 3M, between the need to streamline process and the need to spur innovation, were inevitable. Here are some edited excerpts:

As GEers tend to do almost mechanically, [McNerney] instantly implanted GE's powerful systems—powerful in GE's odd culture, a point never to be forgotten. Six Sigma led the way, was of enormous value, and in the process more or less closed the lid on entrepreneurial behavior....I, for one, have staked my own legacy on decentralization and innovation, and railed against ISO 9000, Six Sigma, Benchmarking, and Best Practices for 20-plus years.

Management guru Tom Peters,

from a post entitled "I Told You So"

on tompeters.com

A great article by BusinessWeek! It clearly shows the natural tension between Six Sigma "control" vs. innovative "freedom." Six Sigma control is great for standard or routine processes in manufacturing as well as scale-up of new products. Six Sigma was a disaster for innovative new products at 3M. Buckley inherited a great company that was damaged by McNerney.

Screen name*: MD2201

I have worked for 3M for more than 25 years, all in the lab focused on new products. 3M is a very special company and was nearly made ordinary by Mr. McNerney.

Fortunately the creative culture of 3M is very strong, and I see it coming back to life in many ways. It will never be exactly the same, but it will survive and a new crop of innovations is already beginning to gestate.

Screen name: MS

Be careful to not write off Six Sigma as it is great for the reduction of waste in virtually all processes where you have a known result you need to hit. The problem I see with the way it was deployed at 3M is that in an environment of innovation you don't know what your target is. You discover something and then figure out how it can be used.

Screen name: Capt. Nemo

Six Sigma tries to replace subjectivity with objectivity and intuition with data wherever possible. While this is appropriate for some operations—like administration, logistics, and manufacturing—it's detrimental to exploratory research and design, which depend on subjectivity and intuition.

Screen name: Vic Riley

Buckley is exactly the right sort of person to lead 3M. Traditionally, 3M was one of the few large companies that grew through innovation on a sustained basis precisely because it had built-in inefficiencies and a culture and modus operandi biased in favor of new ideas. Efficiency and effectiveness aren't the same. Effective innovation is often quite inefficient. Great article!

Screen name: Professor Wolcott

This issue of efficiency vs. innovation is much broader than Six Sigma or one man. This is a Wall Street investor issue. Quite plainly, investors are not interested in investing in the promise of return five years from now. We are much more focused on the quarterly return of our 401(k) plans. This, by nature, drives publicly traded companies away from innovation and toward the Six Sigma promised land. It is easy to blame a CEO. However, I have no doubt [McNerney] was doing what he was brought in to do by the board of directors. If we want innovation, we are going to have to learn to be much more patient investors. I do not see that cultural shift happening any time soon.

Screen name: SixSigma Elsewhere

O.K., maybe I am missing something here. So 3M is not as "innovative" in the eyes of some, but I missed the part of the article that shows how this caused 3M to lose profit. From 2000 to 2004, its shares have gone up, and from 2004 to present they are nearly level. The purpose of business is profit. I would like to see more evidence that 3M didn't just eliminate fruitless creativity.

Screen name: Optimistic?

Which company would you rather own: the world's most innovative company with a lackluster stock price and profit growth, or the seventh most innovative company with 22%-per-year profit growth?

Screen name: Mike

I've spoken with executives at 3M who felt the lessons of Six Sigma inspired them to challenge assumptions, share ideas among formerly insular global divisions, and push past previously accepted limits of how they could serve customers. To them, it was not simply a cost-cutting exercise.

If today's leaders are to heed many of the comments in these articles, it seems we should expect a wave of increased inefficiency, growing defect rates, and slowed-down processes leading to a wave of brilliant breakthrough innovations. Or perhaps smart leaders instead will tell people that the real key to being competitive and having a great place to work is to be efficient, accurate, fast, and innovative. That seems like a more appealing vision to me and one that ought to inspire as much creative thinking as simply having more "play time."

Peter Pande

President, Pivotal Resources Inc.

Co-author, The Six Sigma Way

and What Is Six Sigma?

Beware the naysayers and Sigma zealots in equal measure. Neither group has the vision or experience to understand the balance needed for long-term success. Six Sigma is no panacea, and it can be a monster if implemented blindly. When leveraged correctly using a client-centric approach, however, it provides distinct advantages, many of which you identified. There is one you failed to mention: It can free up people to spend more time innovating by eliminating the mundane, repetitive, and tedious tasks that impede blue-sky thinking.

Michael O'Keeffe

Former Six Sigma Black Belt,

Master Black Belt (GE),

and Certified Master Black Belt

(Sun Microsystems Inc.)

To argue that both Six Sigma and innovation cannot coexist in an organization is not true. In fact, I would argue that a successful organization will master both innovation and process efficiency (Six Sigma). Innovation efforts should be held accountable to a different set of targets than normal projects. But they should still be held accountable. The idea of people going wild with their creative hats on to spur innovation is inefficient and does not work in reality.

Rajit Kamal Manager,

Innosight

Watertown, Mass.

* All comments signed by screen names are from BusinessWeek.com.


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