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Taking on Lean Six Sigma and Corporate Productivity

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People often ask us if we use popular change management techniques like Lean Manufacturing or Six Sigma. The answer is definitely no, but not for the reasons you might think.

An article titled Building a Lean Organization in the Service Industry, now archived on www.isnare.com but originally posted on www.technology-toolkit.com, readily demonstrates the main failures in Lean/Six Sigma thinking.  To quote from the article:

When most organizations consider Six Sigma and process improvement, it is usually done in the context of the manufacturing sector. In reality, the methodology is just as effective when deployed in organizations within the service industry. The main difference is that the variables under review are more focused upon people (as you would expect). Aside from that, the goals are virtually identical: eliminate process-related waste and variance.

This is only the first paragraph, but it’s filled with disturbing language and invalid perspectives. First, the author equates manufacturing and service businesses. Yet this is entirely wrong. Manufacturing is about assembling products which are exact duplicates of one another, whereas the service business is about building relationships, establishing trust, and using expertise in unique situations. The two sectors are totally dissimilar. The former aims to replace labor with labor-saving devices wherever possible, and the latter can never replace employees because it is the human employees who relate to the human customers.

employee corporate productivity

© Flickr user herlitz_pbs

The choice of words also highlights the way of thinking of writer Ryan J Bell. He characterizes people as “variables” and suggests the goal that we should “eliminate process-related waste and variance.” No employee appreciates being called a variable whose individuality is in question and process-related waste is under scrutiny. People are not the machines assembling products on a line, however this language seems to describe stakeholders as coefficients in an equation.

Bell continues:

The number one contributor to waste in the service industry is not completing a given task correctly the first time. For example, consider a restaurant which serves water and a basket of bread to each party. Let’s suppose a customer is seated and a glass of water is provided by the server. If that server fails to provide the complimentary basket of bread with the glass of water, he must make an extra trip. That requires additional time.

While the assumption of this paragraph sounds reasonable, it is incorrect. The number one contributor to waste in the service industry is not first-time task failure, but lack of stakeholder engagement. Of course every new waiter screws up their first day, but they improve quickly. A single failure the first time is insignificant compared to the thousands of glasses of water and complementary bread baskets the waiter will bring successfully and simultaneously in the course of their career. So what is the actual problem? Mr. Bell inadvertently explains the issue later in his piece:

In order to identify process-related waste, the Lean Six Sigma team must first review the organization’s goals and current performance levels. Each transaction which is performed by an employee represents an opportunity to improve efficiency. However, the project team must take care to establish the proper transactional baselines.

Who is responsible for improving the organization? Not the waiter, but the Lean Six Sigma team—an outside group analyzing every move, timing delivery with a stopwatch and describing the convivial banter between waiter and customer as a “transaction.” In fact, the server has no particular incentive to do anything which is not being measured. A great waiter will take the trouble to split a check, bring crayons for the kids, drop off additional butter for a hungry table, or spend a few extra minutes catching up with a regular patron. All of these activities ultimately strengthen relationships and drive business, but all of them threaten the “proper transactional baselines.” Service is not manufacturing.

How do you improve a restaurant? The same way you improve a law firm, a marketing company, a sales team or a doctor’s office, by not trying to improve it. You can’t make these organizations better through external motivators and obsession with measurement. Instead, you must provide intrinsic motivation by giving stakeholders the authority and responsibility to define their own business processes. This requires training, but more importantly, a change in perspective. Organizations must recognize that their value is not in structures of authority but in individual innovation.

Top-down approaches like Lean Manufacturing, Six Sigma (or their combination Lean Six Sigma) tend to encourage business to focus entirely on systems while forgetting about people. If you’ve been considering improving your organization, stop and think about language and stakeholders. Contact our corporate productivity consultants for help building a plan that puts your people in charge of their future.

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