Can Six-Sigma and Technology Innovation Co Exist?

Ever since its introduction by Bill Smith at Motorola in 1980, Six Sigma has been pervasively used by some of the biggest names, among them Johnson & Johnson, Stanley Black &Decker, and Sony. A Google search on Six Sigma yields 164,000,000 results. Indeed, the Six Sigma continuous improvement philosophy pervades any industry that is process and/or manufacturing heavy to minimize cost and waste, thereby maximizing profit. 

In my experience, there is a Dark Side to Six-Sigma. 

Six-Sigma comes at a cost of Innovation.

Six Sigma assumes that the processes in place are sound, hence the focus on improvement. If the innovation need is really just continuous improvement or slight improvements to existing products, you are in luck, because that work simply requires that you extend your existing deep body of knowledge.

New innovations (not marginal improvements on what is currently available) inherently challenge the norm. New innovations are, well, new, and require a different approach. The existing body of knowledge, processes, frameworks, even tools and insights may become barriers to innovation rather than accelerators. True innovation is about discovery, learning and analysis rather than building on the past.  

Innovation is the only activity in a business where the people involved are amateurs, because we spend so little time in most businesses working on discovering new needs, learning about customers and markets, and thinking deeply about the implications from discovery and learning. 

In this sense, a Six Sigma environment inherently restricts true new ideas and innovation. 

To counteract this, one needs to employ a philosophy of maximization with a focus on creation of new markets through product innovation. This is the opposite of Six Sigma. I have heard this called discontinuous improvement.

How does a Six-Sigma company generate New Innovation? 

It seems to me that a company that continues to drive bleeding edge innovations creates a separate entity empowered to innovate. Sony stood up the Sony Computer Science Laboratories, Inc. to pioneer new research areas and new businesses. Stanley Black and Decker created multiple innovation hubs, each with a specialty, for easy access to startups, leading academics, and partners. Lockheed Martin created Lockheed Martin Ventures to make strategic investments in disruptive technologies. Johnson & Johnson has JLABS. The examples go on and on.

There is nothing wrong for a company whose business units, governed by continuous improvement, conduct R&D related to its business field to reinforce the competitiveness of the business. However, if you want cutting edge innovation, you need to setup a separate R&D entity. Indeed, the effort to transition the results from the R&D entity to the Six-Sigma based business unit is non-trivial and oftentimes painful. 

But, what is the cost of not setting up an independent R&D entity?

In the near term, innovations whither. I can think of at least two large publicly traded Fortune 500 companies whose R&D is all about near term marginal improvements of current products. While they have activities to generate and encourage innovation, there is not enough funding to instantiate and scale up the innovations. In the long run, the innovators either leave or stop talking about innovations.  

Will it be hard to get your company to drive innovation without the shackles of Six Sigma? You bet! But you must try. Without discontinuous improvement, your company’s cutting edge ideas will be destined to whither as they wrestle for dimes and nickels using lean and Six Sigma.

What do you think?