The big hole in Lean Six Sigma

Lean Six Sigma is probably the most common business improvement tool used today. But, it has a big hole in it that constrains its value and reduces the potential results.

Six Sigma seeks to improve product/service quality through eliminating variation.

Lean Six Sigma seeks to improve process flow by eliminating waste and improving the speed of process throughput.

Both versions of Six Sigma are data driven to both identify the problems and measure their elimination.

Lean Six Sigma definitely improves the efficiency of processes and the quality of products and services. But, while great emphasis is put on ‘the voice of the customer’ to ensure that the improvements are relevant to and valued by the customer, insufficient emphasis is put on the strategic intent of the process.

The 'Hole'

Lean Six Sigma is about removing waste and time from the process. To do this the focus is on the metrics, the data. What Lean Six Sigma does not ask is “Why are we doing this process at all?” and “What is the strategic intent of this process?” This is the big hole.

The data focus takes you away from the strategic viewpoint. When you’re down in the data weeds it is very difficult to step back and ask, “What role does this process have in our business model?”

For example, a Lean Six Sigma exercise improved the efficiency by which a bank’s mortgage application forms were generated and captured. They made the form easier for the customer to complete. What they did not ask is, “Why do we have a mortgage application form at all? What value does this form deliver?”

Business Reengineering

Michael Hammer and James Champy, who invented business reengineering in 1989, advocated reengineering the business from scratch using a clean sheet of paper.[1] Now business is too complex to do this as advocated; but the concept of a fresh look as the means by which you can break out of just improving the current ways of doing processes to find new ways of doing business is a great idea.

It is interesting that the original concept was business reengineering but the current Lean Six Sigma led focus is on process reengineering. The assumption is that continuous process efficiency improvement will deliver improved business performance. It will, gradually. But, if you want to deliver a quantum increase in business performance you need to get back to business reengineering – and this requires a strategic perspective.

Data Constrained

It is not that you can just add a ‘strategic intent’ review to Lean Six Sigma as the whole Six Sigma approach takes you in the opposite direction to that needed to achieve quantum increases in business performance. With Six Sigma you are constrained to the size of process area where you can gather meaningful data.

To deliver quantum performance improvement you need to move away from the data to analyse and review your processes end-to-end together with all of their supporting processes and determine the strategic intent and value of both each process and each process step. (In several cases we have reengineered complete organizations end-to-end in 60 days – which would be impossible with Lean Six Sigma – consistently achieving around 45% reduction in process complexity while increasing the business performance.)

Strategy Driven

TOP's Simplification approach is not driven by data but by an understanding of what drives the company and customer values – focusing on what drives business performance and value (not just what drives efficiency and cost).

In Conclusion

To illustrate the difference in results, one bank used Lean Six Sigma to increase the efficiency of their mortgage processes by 14% and it took them 7 months. Another bank used our Simplification program to redesign their mortgage processes, improving performance by 49% in 60 days. And this improvement was achieved by five internal staff (only one full time) and 12 workshop participants led by one consultant part time – no expensive black, white, green, yellow or whatever belts.

Lean Six Sigma is constrained to process improvement; Simplification enables business performance improvement. Your choice.

Start by understanding processes and how simplification can radically improve your business operations.