The Decline of Six Sigma

From Quartz (qz.com) via Pocket:

Six Sigma, at its core, is a system for eliminating defects in manufacturing. The name refers to a statistical model, based on deviations on a bell curve, that dictates the number of acceptable defects per million manufacturing steps. Achieving Six Sigma means an organization tolerates just 3.4 defects per million steps, insisting that 99.99966% of its products or services are without flaws. Historically, most industrial companies operate between three and four sigma, making them between 93% and 99.3% defect-free (these figures can vary slightly depending on the statistical model).

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Eric Abrahamson, a Columbia business professor who studies management trends, distinguishes between fads and fashions. While fads bubble up organically, management fashions are manufactured and promulgated by consultants and business schools who profit from their adoption. Six Sigma was a classic management fashion, Abrahamson says, and GE was its leading model, a high-performing company touted by consultants eager to help other firms implement the system. As a result, it spread widely.

“The merchants of Six Sigma wanted to keep expanding the market,” Abrahamson says. “You don’t want to just sell it to manufacturing firms, you want to sell it to service firms, to financial firms, to government agencies, to nonprofits.”

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Six Sigma’s decline was also a symptom of a broader change in the corporate world, where innovation became more valued than efficiency, and technical precision was no longer a differentiator. Silicon Valley’s culture of “move fast and break things” meant business leaders were less concerned with reliability and more focused on game-changing discoveries. An obsession with efficiency, researchers have discovered (pdf), can come at the expense of invention.

One need look no further than the City of El Paso to appreciate the limitations of Six Sigma.

City Manager Tommy Gonzalez touted the benefits of Six Sigma when he was hired, but it’s unclear how the method benefited City Government, if it benefited City Government at all.