Inherent Conceptual Issues - Six Sigma

The last section looked at CSFs and considered how to get the best from Six Sigma, but it behooves us to also consider whether there are inherent issues in the approach. Many companies such as Motorola, Kodak, Honeywell that achieved considerable savings and improvements in quality, nevertheless, have been facing declining revenues and loss of market share (Abramowich, 2005). At the same time quality - leading companies like Toyota choose not to adopt Six Sigma.

Additionally, despite the declared savings, Six Sigma does not significantly affect company stock price (Goh et al, 2003). So what are the inherent issues?

Creativity and Innovation

Six Sigma focuses on optimising what you have, potentially at the expense of innovating for the future. This statement may be illustrated by several examples describing how new innovative products such as computer scanners, email, electronic photography, digital imaging, colour printers, computer networking have pushed quality enhanced by Six Sigma copiers, ilm and phones made by Xerox, Kodak, Polaroid and Motorola to the margins (Shelley and Wilson, 2002). Another example may be the history of International Business Machines Corp. (IBM); Gilbert (2002) claims Six Sigma was almost a religion there in the early 1990s and the focus was almost solely on improving products quality. That resulted in winning a Malcolm Baldrige Quality Award at the facility in Rochester.

However, it did not help the company to stay in business due to the fact that ‘IBM was, in many cases, building the wrong products’ (Gilbert, 2002). For example, while IBM was reducing the defects in its networking equipment, Cisco Systems Inc. introduced a new type of networking equipment, known as routers. While IBM was making incremental improvements to its disk drives, EMC Corp. was developing a completely new approach (known as RAID) for redundant arrays of inexpensive disks.

As a result Cisco and EMC experienced unprecedented growth and took the leading position in the markets away from IBM. Moreover, research done by Cho and Pucik (2005) shows that innovativeness is closely connected with growth, whereas quality has only a limited impact on it. Goh (2002) states Six Sigma is called for when avoidance of non - conformance is of higher priority than breakthrough and creativity’.

Anderson (2006) notes that the economic focus of Six Sigma distracts from customer satisfaction, leading to a focus on only current static CTQs and lack of attention to unexpected or ‘delighting’ features (as in the Kano quality model); little reference to varied customer expectations or lifestyles; not anticipative of technological, social, or business changes (Goh, 2002).

This fact was admitted by several Six Sigma practitioners. For example, GE CEO Jef Immelt (2005) claimed ‘we want to make it O.K. To take risks and do things that aren’t just going to [produce results] this quarter’. All these factors result in the fact that Six Sigma in its current form not only lacks innovation and creativity but even suppresses it.

The same opinion is expressed by Jay Desai (Cited in Flaherty, 2004), who helped implement Six Sigma at conglomerate General Electric Co and currently runs the Institute of Global Competitiveness, “Six Sigma is not a solution for new products or a breakthrough strategy”. Moreover the claimed that “Six Sigma does not create innovation”. the most vivid example of how negatively Six Sigma can affect the company innovation is Lucid Technologies that decided not to adapt Six Sigma due to its focus on developing new innovative products (Abramowich, 2005).

Limiting Learning

Six Sigma can negatively affect various aspects of learning within an organization. First of all, Six Sigma may reduce learning options only to single - loop learning (i.e. fixing problems) rather than double - loop learning which challenges norms and produces breakthroughs (Argyris, 1994). This happens due to the fact that Six Sigma projects are overwhelmingly focused on fixing problems and providing quick financial benefits (an average Six Sigma project lasts about six months) rather than exploring long - term perspectives (Abramowich, 2005). The research done by Juran Institute had studied several companies that practice Six Sigma shows that ‘benefits are being generated almost entirely on an internal cost reduction basis’ (Juran Institute, 2003).

Finally, it seems that Six Sigma is able to create a certain atmosphere that prevents learning and open discussion. There are several factors that lead to such result. First of all, the implementation of Six Sigma initiatives is usually highly top down. The company top management having made considerable investments in creating Six Sigma infrastructure, expects to receive a good return on these investments through Six Sigma projects. Those expectations create a certain pressures on the employees that lead to the situation where ‘savings due to Six Sigma are over counted, but management has made people afraid to speak their true opinions.

Those who do so risk damage to their careers and are labeled ‘not team players’ Rasche (2001). Thus, expectations of high ROI often inhibits open discussions that are an integral element of the learning environment.

Secondly, Six Sigma due to its focus on ‘low hanging fruits’ often creates a culture of ‘if it is not broken, don’t ix it’ (Abramowich, 2005) that implies that projects are initiated to ix the problems that are visible and obvious. This also inhibits discussion on the issues that require long term efforts or do not promise instant results.

Finally, another major contribution to inhibiting learning is made by Six Sigma management system that may be characterized as command and control management system (Seddon, 2006). Seddon (2006) describes Six Sigma as ‘hierarchical direction (command) and reporting (control) structures’. Such principles of management mitigate against an OL environment that requires people’s involvement in making decisions and implementing them.

Thus, this system may isolate the employees from several stages the learning cycle. Besides, due to highly stressed financial focus this system can often facilitate frauds in reporting. As Seddon (2006) claims people ‘learn to report any good news as related to a Six Sigma project’ in order look good in reports that look ‘as though things are improving’. However, add Seddon (2006) such ‘improvements’ ‘are nothing compared to changing the system and often the ‘improvements’ are actually making things worse’.

This situation is reflected in a difference in perception of Six Sigma by management and by workers noticed by some scholars (McAdam & Laferty, 2004) and that can be more vividly revealed by reading the bogs of the employees who experience Six Sigma implementation (some examples are collected by Shelley and Wilson, 2002).

Anti - Involvement

Often touted as a way of involving everyone in an organization in improvement some scholars (e.g. Klefsjo, 2001) suggest that the opposite is not true due to an over - reliance on Six Sigma belts structure at the expense of total involvement.

Despite the comments by many scholars, for example Kwak and Anbari (2006), on the importance of continuous education and training for every employee (not only for belts), Six Sigma can limit learning among the employees to development and education of only the belted employees.

According to several researchers this happens quite often and in many Six Sigma companies learning is mainly limited within the group of Six Sigma specialists (McAdam, 2005; Wiklund and Wiklund, 2002). Even for Master Black Belts and Black Belts learning is often reduced to training (McAdam, 2005) that reduces the learning capacity of the system to the learning capacity of Six Sigma belts. As Bicheno and Holweg (2009) pointed out, the perceived elitism of Six Sigma was a key reason for Toyota regarding it as not appropriate for their high quality organization.

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