The Fading of Six Sigma

The Fading of Six Sigma

Six Sigma, a once celebrated system of defect reduction through statistical engineering, was a critical component of business systems, popularized by GE under the leadership of Jack Welch. But today, six sigma has lost its spark – and gone into obscurity as digital companies pursue the mantra of “move fast and break things”, and then fix them later. Yes, vigorously pursue innovation over pure efficiency in production processes. That does not mean that six sigma is dead. What has happened is that no one really cares about it when building digital ecosystems.

Even GE, the home of six sigma, is seeing lesser value using it: “The company’s [GE] market cap, which reached a high of nearly $600 billion in mid-2000, sank to around $60 billion late last year.” With the fading of GE, so is the spark in six sigma. That does not mean that the problem is with six sigma. What has happened is that people do not want to think into the pursuit of perfection philosophy that supports six sigma; if you want to be wholly perfect before you can launch a digital product, you will never launch. Yes, the speedy shall inherit the world.

Six Sigma, at its core, is a system for eliminating defects in manufacturing. The name refers to a statistical model, based on deviations on a bell curve, that dictates the number of acceptable defects per million manufacturing steps. Achieving Six Sigma means an organization tolerates just 3.4 defects per million steps, insisting that 99.99966% of its products or services are without flaws. Historically, most industrial companies operate between three and four sigma, making them between 93% and 99.3% defect-free (these figures can vary slightly depending on the statistical model).

The Greatest Mistake â?? Attaining PERFECT Product Vision

What You Need To Do

This old article explains in detail why pursuing six sigma and TQM (Total Quality Management) will hurt your digital business. This certainly does not mean that you should not pursue quality. Yes, quality is critical at elemental level. But in the broad scheme of execution, it becomes meaningless to hit perfection, typical in manufacturing systems, when building digital products which are built under the construct of positive continuum. Simply,you never finish them as products. They will continue to build Facebook and Google for years while the electric iron and refrigerator in your house were finished products before they were shipped to you.

Today, you build for a balance between quality and quantity. Yes, you launch a half-baked web product in the day and wait for comments to fix it in the night. You make a video game in the day and wait for comments to fix it in the night. You make a hardware product (yes voice assistant like Alexa) but the development never finishes because the AI that powers it in the cloud is a continuum. The ways products are engineered are changing.

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While TQM and Six Sigma remain for the industrial age firms, pursuing them in knowledge age companies would slow you down. If Alexa had waited to improve its voice assistant product to the level it is now instead of launching it few years ago, it would not be in the leading position it is now. It came with defects and errors but with the web distribution, it has been fixing those issues. The Six Sigma would not have approved such a product for launch. Yes, Alexa would never be a completed product because the AI would keep evolving.

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You need quality but it must have a balance. In web business, your recall happens in minutes and can be fixed in seconds. That is different from making turbines and power plants where recalls could destroy a business. So, do not apply management systems designed for such businesses in your firm. Learn how they break things in Facebook, Google, Amazon and Snap and keep moving. You complain, they fix and tomorrow everyone has forgotten.

The future is now Agile: “Agile project management is an iterative and incremental approach to delivering requirements throughout the project life cycle. At the core, agile projects should exhibit central values and behaviours of trust, flexibility, empowerment and collaboration.”

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2 thoughts on “The Fading of Six Sigma

  1. The industrial companies focus on continuous improvement, while their digital counterparts focus on continuous innovation; and innovation is far from perfection, it’s always a work in progress.

    But most of the leadership and management frameworks we still employ are meant for traditional systems, and yet they keep forcing these things down people’s throats, in the name of experience…

    In the AV (autonomous vehicle) space, the data used in training these vehicles were harvested from vehicles with HUMAN control, until we harvest data from AV to train another AV, then a new problem previously not noticed would emerge. That was part of a case I went through this morning.

    As we find solutions, we create new problems, and it goes on and on.

    Reply
    1. “In the AV (autonomous vehicle) space, the data used in training these vehicles were harvested from vehicles with HUMAN control, until we harvest data from AV to train another AV, then a new problem previously not noticed would emerge. That was part of a case I went through this morning.” Indeed, the users are now part of the products.

      Reply

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