Six Sigma was recognized as a measurement standard as far back as the late 1700s and implemented to improve product variation as early as the 1920s. It wasn’t until Motorola engineers in the 1980s, however, started obsessively measuring product defects at a level per million opportunities that Six Sigma came to the forefront as a corporate culture. I had the privilege of watching its next iteration into a business strategy under Jack Welch at General Electric and can personally testify to the mindset it creates. To be a leader at GE, you had to be a process and change agent, not just a business person or functional head.
While it started out in manufacturing to increase the statistical chance of defect-free product features, exceptionally important when dealing with airplane engines, for example, it soon became a method to improve all business processes to achieve stable and repeatable results. This turned the focus towards customer satisfaction, as well as the inherent internal improvements in cost and reduction in variability, and opened up the methodology to just about any industry.
The core tool for Six Sigma is DMAIC (Design, Measure, Analyze, Improve and Control). It’s a 5 step, statistically-driven, process improvement methodology. While the benefits have been verified for certain sets of problems, it’s also been criticised for being too complex, exhaustingly thorough and too time-consuming for many processes. In some cases, the cost of implementing DMAIC ended up greater than the cost improvement in the process it was addressing. Even GE eventually transitioned to Lean Six Sigma and more recently to experimenting with the Lean Startup methods professed by Eric Reis.
While Six Sigma is not as de rigueur as it once was, and in many people’s minds has shrunk back to its original purpose in the manufacturing world, Six Sigma and its various offshoots are useful tools for a business to understand. They force a data-driven mindset as opposed to the gut-instinct methods employed by numerous entrepreneurs and startups. While ideas can come from anywhere, innovation is often labelled a process. And processes require a structured approach to produce their best and most consistent results. Whether Six Sigma or any of the newer process improvement methodologies are appropriate for any given business is a question for each to decide. At the very least these methodologies can help entrepreneurs, innovators and business leaders make “data-informed” decisions rather than listening solely to your inner voice, which in itself is another area of debate and study entirely.
Featured Image: General Electric Green Belt Certification