When Lean and Six Sigma Don’t Work
Someone on LinkedIn recently asked “Are there examples of processes where the concept of Lean, the philosophy of Six Sigma, or other quality tools don’t work?”
Fortunately, there have been plenty of researchers who have asked this question already. A persistent in theme in the management and quality management academic literature over the past several years has been to study the conditions under which quality practices “work”. To me, “working” means that the return on investment (ROI) has been worthwhile – doing the project yielded more benefits than not doing the project.
For all the bottom-line success stories from TQM implementations in the 1980’s and early 1990’s, and Six Sigma from the 1990’s until now, there are lots of “failed projects” that didn’t deliver on their promises.
My favorite overview is a meta-analysis from Benner & Tushman (2003) in the Academy of Management Review. Summarizing several other research studies, they found that “in stable, technologically certain settings [quality management] practices may be productive, [but] in uncertain or technically complex contexts these practices may be quite counterproductive.” The more rapidly the competitive environment is changing, the less likely quality management or process improvement will “work”.
- Slowly changing competitive environment = Better success with quality initiatives
- Rapidly changing competitive environment = Less success with quality initiatives
Granted, this isn’t a complete conclusion, because the skill and style of the process improvement team can impact its potential for success. But it does suggest that a company should consider the competitive environment as it sets its own expectations for what a process management initiative can deliver.
Benner, M.J. & Tushman, M.L. (2003). Exploitation, exploration, and process management: the productivity dilemma revisited. Academy of Management Review, 28(2), 238-256.
Hi Nicole, I fully agree with your definition of “working”! My turn to now share a great article about “Change ROI: A measure of business core competency” from Pete Pande, President of Pivotal Resources, a global change leadership consulting firm, and author of several popular books on business change including “The Six Sigma Leader” book…here is the path to read the article: http://www.pivotalresources.com/images/about/world_finance_article.pdf
Hope this article gives you some additional info on a great topic!
Best regards,
Laura Garnier
So as an example could we say that there is likely little correlation between quality initiatives and success in the automobile industry today (since it is obviously very unstable now)? I don’t think so. I would, and have actually, place my money on Toyota doing better than others.
To me the key is execution. It is possible for the macro-situation to be so poor that well executed quality practices still fail but I think the quality of execution trumps everything else – the type of work… And even in that instance quality helps it just might be it does not help enough to prevent failure.
It is more challenging to apply quality tools to say research, in comparison to manufacturing. But good execution of quality methods in research will have the same result of improved results over those that chose to ignore quality management methods. Also different tools will be more useful in different environments.