There was an interesting story in Business Week a little while ago about 3M hiring a CEO called James McNerney, who imported the ‘Six Sigma’ process from his old employer, General Electric. Nothing remarkable about that you might think, after all, 82 out of the top 100 companies in the US use Six Sigma. However, 3M is known as something of an invention factory and Six Sigma is an efficiency and quality process designed to identify problems and remove errors.
Six Sigma is about consistency, sameness and control whereas innovation is about mutation, serendipity, difference, failure and disorder. One is a left-brain activity, the other is right-brain. So guess what? Morale at 3M dropped and the company sank from No 1 on the most innovative companies list in 2004 to No 7 in 2007. Much the same thing happened at Home Depot, where the retailer dropped from first to worst on customer satisfaction surveys following the use of Six Sigma.
So is Six Sigma a dead dead? No. The point here, I think, is that Six Sigma is great for process improvements, quality and general management. Research by management Professor Tom Davenport also suggests that the process might be good for incremental innovation. But when it comes to more radical blue-sky thinking Six Sigma does look like a very very bad idea indeed. This is clearly a problem because once companies have passed through the quality phase they tend to look for growth, and apart from M&A (which, according to one source, doesn’t work in 70% of cases) one of the best ways of delivering rapid growth is radical innovation. I hope we hear more about this next year and I will certainly be following stories on this subject with great interest.