Thursday, September 25, 2008

Not the First to Question Six Sigma

Thanks goes to several colleagues for their comments and in particular for pointing out that I was not the first to question the value of Six Sigma, including a person and thinker who I greatly respect, Tom Davenport. Among his many excellent and insightful publications, he wrote "Competing on Analytics", a book that should be required reading for every executive and manager in healthcare.

http://www.businessweek.com/magazine/content/07_24/b4038409.htm

One of my former students asked me if she should discontinue her plans to seek Six Sigma training and I answered no. There's still value in understanding the concepts and theories underlying Six Sigma and in certain restricted corners of a business, Six Sigma could be the best tool for addressing process improvement. But I retain the opinion that there are few, if any, of those corners in healthcare and it is a methodology which, if broadly applied in any business, will squeeze agility and innovation to death.

Monday, September 22, 2008

Six Sigma = Sick Sigma

As healthcare organizations rush towards process improvement, many are adopting or have adopted Six Sigma as their quality improvement process du jour. While at first this choice sounds great and makes for eye-grabbing headlines, the reality is, Six Sigma will soon squeeze every drop of agility out of these same organizations. It’s only a matter of when, not if. Also, many of these same healthcare organizations have mistakenly labeled Six Sigma and Lean as synonyms. Nothing could be further from accuracy. Six Sigma matured in Motorola as a means for eliminating defects in product manufacturing and is highly driven by statistical data analysis and process control. Lean grew up in Toyota, as a front line cultural tool for eliminating waste. In addition to this fundamental difference in motive—i.e. defects vs. waste-- they use drastically different tools and methodologies. Six Sigma is complicated and dogmatic about measurement. Lean is inherently simple and dogmatic about culture.

Six Sigma is appropriate if your organization:

  • Is in a low volatility industry. Stated otherwise, the business state of the market is relatively stable; innovation is less important than consistent delivery on the status quo; competition is minimal; and consumer demand for better products and/or lower prices is low.
  • Can focus on quality at the expense of schedule and production volumes, in the delivery of its products and services.
  • Produces products and services in an environment which is readily measurable, i.e., the variables in the equation of “Quality” for those products and services can be quantified with reasonable accuracy and consistency

Healthcare, I would argue, is not an industry which fits any of these criteria. Nay, few if any industries or markets fit these criteria today.

There are many reasons for Motorola’s fall from grace, but it is more than simple coincidence that Six Sigma was once its crown jewel. I had the great opportunity to work with Motorola as a customer of their products while I was in the Air Force in the 1980s. During that period, innovation and agility were less important across all industries than they are today. At that time, TQM, CQI, and ISO were focusing on quality, repeatability, and execution. Motorola was relatively innovative, but they were better known for highly reliable, cost effective products, and their execution on commitments. At about this same time frame, Motorola started to embrace the notion of Six Sigma for eliminating virtually all defects in their products. As an Air Force information systems officer, reliability of my equipment was paramount, so I was clearly impressed by and supportive of Motorola’s intentions.

Fast forward to the mid-1990’s when I was a small-time consultant to Motorola on their Iridium project. Ignoring the flaws in Iridium’s business model, such as the failure to account for the loss of telecommunications tax revenue in countries which benefited from land-line communications and eventually cell phone towers, the Iridium project gave me a thin-slice insight into a larger problem at Motorola—the Six Sigma process was squeezing agility, and subsequently innovation, to death. Fast forward once again to today and we see a Motorola that has, in fact, been squeezed to death. The agility and innovation of their competitors are like pythons, slowly crushing the culture of this once great company, and has Motorola crying for a buy-out. Other early champions and adopters of Six Sigma are showing the same fate—Allied Signal, Honeywell, Jaguar, Sun Microsystems, et al. I would argue that GE, Motorola’s Six Sigma protégé, is floating the same river.

I recently visited the “official” Six Sigma web site and found it proudly proclaiming “1,176 slides” available for DMAIC training for only $99. I didn’t know if I should laugh or shake my head in sad appall. Any process improvement methodology which allows for that degree of largesse, needs to recursively turn its own processes back on itself. In stark contrast, I’ve seen the tenets of the Toyota Production System and Lean process improvement taught to a group of nurses with no manufacturing background in as few as 20 slides in the morning, and those same nurses applying Lean to their own departments later in the afternoon.

Don’t make healthcare worse by rushing to the popular cliff of Six Sigma…. Unless, of course, you’ve equated it to Lean and then I would encourage you to normalize your vocabulary to standards. :-)

Sage Advice & Coincidences

Our Aunt Harriet Pyle Manuel wrote this to me in my high school graduation card. I didn't get it back then, but I learned to get it as I...