Lean Organization and ‘Six Sigma’

Obviously, the fundamental objective of business engineering is to build a lean organization. And of business re-engineering – to transform an established company into a lean organization. A lean organization in BDL methodology is the one that (1) contains only those objects and processes necessary and sufficient for maximizing its aggregate performance and financial value; (2) where every corporate object and process operates with its maximum possible efficiency and thus with ‘zero’ waste; and (3) where the synergy between corporate objects is maximized.

Therefore, one of the key objectives of a comprehensive business analysis is to determine how lean is your organization; of your strategic corporate reengineering – to create a lean organization; and of your kaizen system – to keep your organization lean at all times.

How do you measure ‘leanness’? By how optimal are values of object- and process-related KPI. Just as simple as that. Therefore, I am not a big fan of fancy concepts such as ‘Six Sigma’ (with all its ‘champions’, ‘black belts’ and the like). I think that all these rankings are artificial and, frankly, just a waste of valuable time.

The proof? Well, for starters, according to Fortune magazine, of 58 large companies that have announced Six Sigma programs, 91 percent have trailed the S&P 500 index (in other words, the stock market) since. Specifically, Ford's "6 Sigma" program did little to change its fortunes.

Why? To a significant extent, because (again, according to Fortune), ‘Six Sigma’ methodology is narrowly designed to fix existing processes (it does not even consider fixing objects) and does not help in coming up with new products or disruptive technologies. It also – surprise, surprise – stifles creativity. Up to being totally incompatible with R&D, brainstorming (which is an absolutely vital component of making a quantum leap) and discovery (same thing).

 Therefore, no quantum leap with ‘Six Sigma’. Only incremental improvement. Case closed.