I clenched my teeth as I read yet another rhapsody by Jack Welch (Business Week May 21) on why Six Sigma is the silver bullet for managing a successful company and how it should permeate every corner of a company.

Two responses in the current issue push the idea of using Six Sigma in a very targeted approach instead. I found one comment in Jay Arthur’s letter especially interesting, “As little as 4% of any business causes half the waste, rework, and lost profit. So let Six Sigma identify the 4%, then focus on that 4%.”—a statement that does make sense.

The current issue of IN (IN INNOVATION), Business Week’s magazine inside the magazine) focuses on Six Sigma, asking if it’s still applicable today, “The discipline was developed [by Motorola] as a systematic way to improve quality, but the reason it caught fire was its effectiveness in cutting costs and improving profitability. That makes it a powerful tool—if those are a company’s goals.”

But in a world where innovation is the top priority for a company to grow—since few companies have the cash horde to buy their way to success—blanket use of Six Sigma can actually kill the golden innovation goose, as the profile on 3M, long known for innovation, shows.

A companion viewpoint piece talks about having it both ways citing The Ambidextrous Organization (published as a downloadable PDF by the Harvard Business Review for just six bucks), in which “…Charles O’Reilly III and Michael Tushman, business school professors at Stanford and Harvard, respectively, acknowledge the paradox of exploitative vs. explorative efforts. They conclude that smart companies separate the more ambitious efforts at innovation from ongoing efforts at continuous improvement. That allows for different processes, structure, and cultures to emerge within the same company.

An “ambidextrous” organization, they write, has independent project teams integrated into the existing management hierarchy. A tightly integrated senior team makes sure the activities of the right hand don’t work at cross-purposes with the goals of the left. Both the traditional business and the fledglings report to the same executive team but are managed under a very different set of rules, depending on where each is in its maturity cycle. Remarkably, in the professors’ study of 35 attempts at breakthrough innovation, ambidextrous structures were successful 90% of the time. Other models, such as cross-functional teams and unsupported skunkworks-style groups, were successful less than 25% of the time.

I’ve said many times that there are no silver bullets, but the ambidextrous approach certainly makes a lot more sense—Six Sigma would approve.

This entry was posted on Tuesday, June 5th, 2007 at 10:00 am and is filed under Business info, Communication, Culture, Hiring, Leadership, Motivation, Retention. You can follow any responses to this entry through the RSS 2.0 feed.
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