Friday, June 09, 2006

Lean on me

OK - I'll admit it. I am having a hard time making up my mind about the importation of "lean" principles to innovation. Obviously, Six Sigma and Lean concepts are having a powerful impact in many businesses, improving processes and cutting costs and wastes. The adoption of powerful tools from one business function to another has traditionally been very acceptable. Do the concepts behind lean add value or detract from improving innovation and idea management? I think there's a mixed result so far.

What's great about Six Sigma, Lean and some of the other concepts currently being imported from manufacturing and process improvement in other business functions is that they seek to reduce cycle time and reduce waste. Those are great goals for innovative teams. Since product life cycles are getting shorter, a firm has less time to recoup costs of development and bring a new product to market. Bringing great new ideas to market faster is clearly a benefit. Reducing waste, primarily through reducing redundant projects and rework, will mean a greater focus on the ideas that "work" and pouring more resources into fewer, better ideas.

However, most of the business functions where Lean and Six Sigma concepts have worked have had a long-standing, well-defined business process already in place, and the implementation of Lean or Six Sigma or both have brought about tweaks or improvements to those existing processes. Is Lean or Six Sigma right for a business function or haphazard process that represents the state of the art for innovation in many businesses today? It seems to me that there are few documented processes that are followed repeatedly in innovation teams, and little consensus about how to innovate even within the same organization. Don't these issues need to be addressed first?

Also, Lean and Six Sigma have goals for reducing costs, reducing waste and reducing inefficiency. At some level, as much as we'd like to have a clear view of the products and opportunities available to us, there has to be some level of trial and error in innovation, especially in more disruptive innovation. If you can perfectly define the market for a product - the size of the market, the adoption rate of the product, then you are working on an incremental innovation at best. Most really interesting and disruptive products have completely outstripped any plans for the product, and Lean and Six Sigma really don't work well in situation that you can't quantify. Look at the RAZR for example. In my previous post I argued that the RAZR design team did a terrible job predicting the size and adoption of the product. Initially, they were going to make 2 million. They upped that to 20 million and ended up selling more RAZRs faster than even the Startac phone. Can lean and Six Sigma concepts work in an area that almost demands that we work on items that can't really be quantified. Does the culture of cost reduction, waste reduction and time reduction begin to force teams to discount ideas and opportunities that might take longer or have a higher risk profile?

So, I'm torn. What I like about Lean and Six Sigma:

- Proven to work and to be adopted by the organization
- Emphasis on a repeatable process
- Focus on cost reduction, waste reduction, cycle time reduction

What I don't like about Lean and Six Sigma:

- Will force the team to focus on short-term innovation only
- May place constraints on the team's thinking and risk taking
- Is not really about building processes, but about improving existing processes

I'd be interested in your thoughts. Feel free to leave me a comment and let me know what you think, especially if you've implemented Lean concepts or Six Sigma concepts as part of an innovation team.
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posted by Jeffrey Phillips at 5:14 AM


Anonymous Anonymous said...

"Lean" and Six Sigma are all about doing the thing right - innovation is more about finding the right thing to do next. While that doesn't automatically mean that efficiency is a bad thing in innovation, you can't make it the primary goal otherwise you can't find new things to do. Now, at some point in the process of coming up with something new will be subject to more stringent quality control, but to introduce that too quickly will kill off the best ideas.

7:22 AM  
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11:14 AM  
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11:14 AM  
Anonymous Anonymous said...

Six Sigma has some empirical support only for process improvement, in the paradigm DMAIC. But that Six Sigma may not work for innovation is suggested the fact that "Design for Six Sigma" has as many approaches as it does consultants, with each consultant propounding her own model, while all agree that DMAIC doesn't work for innovation.
Six Sigma approaches for process improvement require a metric; for innovation, this would require a measure of the innovativeness. I doubt such a thing could exist, and so far, innovation metrics only measure how accomodating an organization to innovation, or how likely an organization is to produce an innovation, not the degree of innovativeness. (This may be why certain investigators have shifted to looking at innovaTORS rather than innovaTIONS.)
Of course, I'd love to be wrong: what are measures of innovation, and not merely propensity for innovation?

6:29 AM  
Blogger Tom Hopper said...

As ric said, Lean and Six Sigma are about doing things right, but not about knowing what the "right thing" is. Additionally, it seems unreasonable to apply the same business goal of traditional Six Sigma projects (e.g. more than $200,000 cost reduction in four to six months) to invention and innovation.

That said, the tools of Six Sigma are borrowed wholesale from science, which is hardly inconsistent with good invention and innovation. The goal of Lean, to get things done on time and with a minimum of waste, is also not inconsistent with invention and innovation.

One of the most frequent problems with invention or innovation houses is that the perception of invention and innovation as essentially random activities leads to a lack of accountability and a "playing in the sandbox" mentality, in which (bad) ideas end up being recycled endlessly. The development cycle ends up looking like Moebius strip, with no products coming out at the end.

Six Sigma and Lean can surely serve a useful purpose in improving the R&D process, just as they have been used to improve other transactional processes. The goal should not be to reduce costs, per se, but certainly these tools could be used to ensure flow (of knowledge) and reduce the waste of rework (unnecessarily rehashing failed ideas).

It is certainly important that management, when applying these tools to innovation and invention processes, make sure that they are asking the right questions and setting the right goals. The goal should not necessarily be to shorten all R&D programs, but improvements are always possible. The goal selected might depend on the situation, but I can see the tools of Six Sigma and Lean being applied to improve the rate at which new product ideas are generated, or to reduce the time it takes to eliminate "bad" ideas (or, as a former boss liked to say: "fail fast; fail often;" it takes lots of ideas to find the winners), or to improve the integration between R&D and the customer (allowing companies to maintain a deep understanding of their customer's needs, and hopefully increase the percentage of good product ideas).

There have been numerous books written on the subject. I have not read all of them, but one that I enjoyed is Improving R&D Performance the Juran Way, by Al Endres. It addresses the application of TQM rather than Six Sigma or Lean to R&D, but it is still quite relevant to this discussion.

6:46 AM  
Blogger Curious Cat said...

First "lean" and "six sigma" get defined by who is talking. I do not see anything in "lean" that would get in the way of innovation and in many ways it supports it. If you want my opinion for why that is true it is because "lean" is based on Toyota's implimentation of Deming's ideas and he understood to the importance of innovation and process improvement (and systems thinking, respect for people, knowing that important factors cannot be measured, etc.).

Six sigma, as most often practiced does probably inhibit innovation due to a bias toward measurable short term results. However, if done well (in my opinion listening to people like Roger Hoerl, Bill Hill, Soren Bisgaard, Forest Breyfogle) six sigma can support innovation.

For more, see Managing Innovation and Deming on Innovation

10:02 AM  
Blogger marc said...

Perhaps I have a perspective advantage as I was trained as an Industrial Engineer using Lean and Six Sigma all day long and now I run an entrepreneurship center dedicated to technology innovation, but I don't see the disconnect at all.

Innovation is necessary to come up with the fundamental changes to a product or service. Lean and Six Sigma are then needed so that the innovation can be delivered at an acceptable cost, quality, and timeliness.

Lean/SS and innovation are not supposed to be the same thing or used together. They are complementary tools that can be used by different people at different times.

That said, if you have ever been present at a good Kaizen blitz, you may have experienced a form of Lean process innovation.

10:18 AM  
Anonymous Anonymous said...

I seriously disagree on one front, agree on another. First there is the psychological front. Many of the individuals working in this area are overly and short terem focused and are not looking "out of the box" for how "lean" can be accomplished.

However, as a serious practictioner of the breakthrough TRIZ problem solving process, I couldn't disagree more. I'll let you do some web searching on TRIZ, but basically it is a breakthrough problem solving process derived from the study of breakthrough patents (only a few). An ideal state, maximum use of resources, and resolution of contradictions are the key concepts. In TRIZ terms, "lean" is accomplishing what we want with nothing. This forces some serious brain thought about the ideal state, what is neded to accomplish it, how resources can be better used, contradictions resolved, etc. TRIZ and Lean/DFSS are combined in many organizations.

Jack Hipple
Tampa, FL

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