Академический Документы
Профессиональный Документы
Культура Документы
Innovation
The system for boosting quality may seem to run
counter to disruptive changebut companies can have
it both ways
by Jeneanne Rae
"I can't stand this," said a senior manager of an Standard& Poor's 500 company recently.
"One minute the management team is telling us to innovate, and the next minute they are
giving us our marching orders in deploying Six Sigma. It's crazy to tell people they
should be focused on becoming more efficient while at the same time you want them to
explore untapped growth potential. This is making me nuts."
An outgrowth of the quality movement, Six Sigma was first applied in manufacturing
the greater the sigma number, the fewer mistakesbut has since found its way into
service businesses and functional areas such as human resources and finance. According
to Mario Perez-Wilson, a former manager of statistical methods at Motorola (MOT), the
average defect rate at most major companies hovers around four sigma6,000 defects
per million (or 1/200). At the Six Sigma level, there are 3.4 defects per million, a
significant step up in efficiency that is hard for any organization to achieve.
Six Sigma has therefore become management shorthand for "continuous improvement."
Ask anyone who leads these efforts and they will be quick to add, "continuous
improvement with goals, a defined process, and with metrics at its core."
"Our business favors consistency. Because of our success and the significant changes we
can make within our system it is now possible for us to think as one organization across
fiefdoms and business units to improve every type of customer's experience. This ends up
looking like business model innovation, which in the banking business is very
uncommon."
Starwood Hotels (HOT), which is widely known for both its Six Sigma and innovation
prowess, notes that similar cross-business unit success has added significantly to its top
line. Management at several of its Atlanta hotels used Six Sigma principles to develop a
system to redirect conference customers to one of its nearby sister hotels when the
original hotel was full or too small. Dawn Truemper, director of sales and marketing at
the Westin Buckhead, said as a result, "the group's lead conversion rate jumped from 8%
to 33% during the first month of the new sales system's operation."
No doubt this is innovation, but of an incremental nature. The conclusion here is, for
large-scale systems that share customers across business units, Six Sigma can have a big
impact when it comes to innovation. In systems that that don't share the same customer
base and operational backbone, the use of Six Sigma in an innovation context can be a
waste of time.
Support both teams appropriately. Don't shortchange one effort over another.
Innovation methods and processes may be lesser known than Six Sigma but that doesn't
mean they don't require an equal level of investment in training, resources, and knowhow. It kills me to see so much investment in reengineering, training, and employee time
being poured into Six Sigma initiatives in the name of cost savings when innovation gets
starved for critical research requirements like white-space analysis, ethnographic
research, or prototyping. It's as if leadership teams truly believe their companies can
shrink their way to greatness. Or is it ignorance or fear that accounts for so many
companies, particularly in the services sector, underinvesting in their futures?
Change the incentive system. The best systems reward overall company performance to
keep everyone focused on the larger mission. If there is one way to foster employee
empathy and support for company initiatives, especially in light of the inertia so
commonly associated with change, it's through their paychecks.
Innovation and Six Sigma are different methods that beget different types of results and
require different management styles. Companies don't have to choose between the two
innovation and Six Sigma can coexist.
Jeneanne Rae is co-founder and president of Peer Insight, a research and advisory firm
focused on service innovation and customer experience design for S&P 500 firms.