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Innovation Becomes a Science?

It�s become leadership mantra �What matters, gets measured,� and in today�s world demanding innovation at hyper speeds, is it any wonder that the focus of most senior operations and general management leaders is how to integrate the Holy Grail of Six Sigma into every crevice of profitable operations. But isn�t the question of which comes first: the productive operation or the cultural change really at the heart of predicting success?

Published on: Monday, June 30, 2008 Comments (8) Category: Leadership, Managing, Organization & Logistics,

Posted by: Lauryn Franzoni

The members of this community face this question every day. Is driving vision and values the most important thing you do every day? We�d love to hear examples from the group about how you�ve tackled this very real dilemma � is it cultural change first or is it the power of Six Sigma/LEAN operations that propels your business forward in innovation?

Great tools are available to measure cultures of innovation. For a look at how Google�s analytical approach benefits the vision read A dark art no more on Economist.com.

One of my fellow ExecuNet members pointed out in a lively discussion the other day that she hadn�t yet experienced an organization where the leadership stayed the course aligning culture and performance. �In my opinion,� this insurance executive said, �only leading-edge and financially-fit organizations are not so focused on the short-term financial gains of abandoning Six Sigma commitments, but on how Six Sigma better positions them for the future.�

It takes solid financial performance BEFORE you can have the culture and the operations in sync? Do you agree?

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Comments

Jack Nelson

12:26 PM on 02/06/08

Actually, being in crisis, especially financially, makes the cultural and operational changes much easier! If survival is on the line, it is much easier to convince people to try something new. And when the process proves to save money, improve quality, reduce waste and make life better, the culture changes quickly. I have seen this cycle in action and am a believer.

Peter Heckel

12:43 PM on 02/06/08

There is step that usually precedes strong financial performance and that is strong, consistent information collection. Timing, quality, and detail of financial and operations reporting is essential. That information paves the way to identifying profit inflection points and investment reduction opportunities.

In addition, a quality base of information provides the basis for comparing and scoring the real progress of improvement programs such as Gain Share or Lean.

Hint: Make all internal reports tie to the Income Statement and Balance Sheet. Next, remove all incumbent reports used by management. The result is consistent reporting with management more aware that their success will more directly influence profit improvement. In addition, the process becomes a significant cultural transformation tool.

Pete Heckel
214-914-5675

Dan Blank

01:03 PM on 02/06/08

People thrive is an environment where they feel their values are respected. If the company is struggling � tell them! I have seen many examples of people doing the impossible because they were united in their cause. I often struggle with the level of importance people place on Six-Sigma. This is a business process which takes buy in at all levels of an organization and huge financial investments. I have seen it work in a number of companies but it takes its toll on people. For me I will take common sense, a strong leader, and a team willing to get it done now over a costly process any day. Lean is good, profits are better!

Marek

02:17 PM on 02/06/08

Most of consultants would say: ‘it depends’. My experience with change and performance management comes from two different environments and both responded differently.

Firstly, we can say that lean can be run for as little as one department/location environment with clear objective to work smarter not harder, using wise planning and pull system. With such approach we downgrade LSS package (Lean Six Sigma) into the selection of events focusing on operational improvement one at the time. Once more early buyers join the programme; elevation to CxO ignites change process on much broader scale. In this case lean success is used as a game changer.

Option two would be to start from defining the vision and kick-off change programme to get there. In this respect lean serves as the toolbox for programme managers to bridge performance gap and reach desired stage.

Looking at Japanese companies there is also the third way called after Toyota TPS (Toyota Production System), where change and lean are fully integrated. Long story short, they say that TPS is the way to manage business, where continuous improvement philosophy supported by lean thinking generates jointly productivity improvements. The culture response to TPS is expressed in incremental change leading toward operational excellence.

Having said that, one thing I am sure of; irrespectively of the sequence and definitions - without management support i.e. top down strong communication, there is no hope to be successful. Change programmes of this size generate genuine benefits after 18 months and need money to finance the three critical components for success: people, people and people.

Greg Wilkerson

03:22 PM on 02/06/08

In having successfully led two financial turnarounds and a company requiring, primarily a culture change to drive increased revenue and profitability, I would lean toward the side of first leading the company with your vision and long-term direction and the values you want displayed in the organization. The consistency of leadership and management adherence to the long-term direction, along with consistent application of the values will help to cement to the organization the seriousness of management. The most comment setback to continued focus on the direction is the short-term focus on financial results and any significant adverse affect on the performance.
Lean and Six Sigma are valuable tools and frameworks to reinforce and help drive the change required; yet, without the over-arching direction that has been communicated periodically to the organization, they will not understand the connection and view these initiatives as a flavor for the day.
Sustainability of culture change is critical and it requires leadership to communicate successes and failures and what corrective actions are needed to move the organization forward. Lean and Six Sigma can provide the evidence of progress and can help serve as good frameworks for sustainability of the culture change.
In the end, in my opinion, an organization needs to see the tangible evidence of improvement and the continued application and einforcement of the tools by management.

Eric M. Novik

02:27 AM on 02/07/08

Lets call Six Sigma what it is � a quality management framework. The name gives it away: if you embrace Six Sigma (3 standard deviations from the mean on each side of the distribution) you are committed to a process that will yield less than 1% probability of defect occurrence in your product or service offering, assuming your defects follow a normal distribution. Thats an ambitious goal. I presume that the tolerance for Boeing is not the same as for Godiva Chocolate.

Here are some of the questions that I think managers need to ask. Are we ready to embrace quality culture at every level in the organization, while at least temporarily sacrificing other competing priorities, like time to market for example, or are we simply in love with the catchy name? Are we prepared to tailor the framework to our business and learn by trial and error, or will we hire consultants with pre-made power point templates? Are we willing to commit time, each day to measuring and analyzing data, and do we agree to act on what these data reveal?

People in finance tell us that three 10 sigma events recently occurred in rapid succession. Besides being a mathematical impossibility, there is a lesson here for us all: (a) quality is a scarce commodity on Wall Street, and (b) it need not be in your organization.

Eric M. Novik

http://www.linkedin.com/in/enovik

David Matthew

02:05 PM on 02/07/08

With the exception of the Toyota Production System (which is not a Six Sigma program), stockholder value almost uniformly is damaged by Six Sigma programs in large public enterprises. Some analysts consequently see talk of Six Sigma as a “sell signal.”

My theory is that Six Sigma is employed largely by companies in a “mature” state, where growth is small and incremental. Attempting to impose such an overhead-heavy system on an agile company in rapidly changing market is a plan for failure. Hence the emergence of “LEAN”. My own jury is out on its success; I don’t think there have been enough samples to make a reasoned judgement. But 6 Sigma is not for rapidly changing, global companies!

Bohdan M. Christian

10:24 PM on 02/12/08

Entertaining this question from an �Educator/Training� perceptive produced a rather unique perspective on change culture and measurement needs.
The educational culture is usually considered different from the business culture. Innovation as a �culture� is considered different too. We even look at education, learning and leadership development as different in that �school� is something done to students while �training� benefits adults. In reality, both educational and business organizations are complex adaptive systems. Organizational development and change is an iterative process of diagnosis, involving further diagnosis, change, evaluation and reinforcement. Each organization has unpredictable, clashing cultures, disensus, contention and disorder. Most change resulting in innovation is complex, producing many alternatives requiring different predictabilities and outcomes. This requires an increase level of interaction among organizational agents. What is required for innovation is the recognition that things can be improved and changed. It requires a vision of �what can be� before the need to �measure� is necessary. It has been my experience that people need to know and connect an innovative thought, idea or process to a larger sense of �worth.� This sense of �worth� must bind both participants and organization together. Data collected through Six Sigma/Lean process exposes where gaps occur. Corrective actions are applied through the use knowledge, experience and experimentation. Management is a set of process that keeps a complex system running smoothly. Six Sigma/Lean is a process. Leadership defines the future and aligns people with that future or change culture.

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