Six Sigma, Kaizen, Lean, and other variations on continuous improvement can be hazardous to your org...

1. It's Time to Rethink Continuous Improvement
Six Sigma, Kaizen, Lean, and other variations on continuous improvement can be hazardous to your
organization's health. While it may be heresy to say this, recent evidence from Japan and elsewhere
suggests that it's time to question these methods.
Admittedly, continuous improvement once powered Japan's economy. Japanese manufacturers in the
1950s had a reputation for poor quality, but through a culture of analytical and systematic change
Japan was able to go from worst to first. Starting in the 1970s, the country's ability to create low-
cost, quality products helped them dominate key industries, such as automobiles,
telecommunications, and consumer electronics. To compete with this miraculous turnaround,
Western companies, starting with Motorola, began to adopt Japanese methods. Now, almost every
large Western company, and many smaller ones, advocate for continuous improvement.
But what's happened in Japan? In the past year Japan's major electronics firms have lost an
aggregated $21 billion and have been routinely displaced by competitors from China, South Korea,
and elsewhere. As Fujio Ando, senior managing director at Chibagin Asset Management suggests,
"Japan's consumer electronics industry is facing defeat. "Similarly, Japan's automobile industry has
been plagued by a series of embarrassing quality problems and recalls, and has lost market share to
companies from South Korea and even (gasp!) the United States.

2. Looking beyond Japan, iconic Six Sigma companies in the United States, such as Motorola and GE,
have struggled in recent years to be innovation leaders. 3M, which invested heavily in continuous
improvement, had to loosen its sigma methodology in order to increase the flow of innovation. As
innovation thinker Vijay Govindarajan says, "The more you hardwire a company on total quality
management, [the more] it is going to hurt breakthrough innovation. The mindset that is needed, the
capabilities that are needed, the metrics that are needed, the whole culture that is needed for
discontinuous innovation, are fundamentally different."
So should we abandon continuous improvement? Absolutely not! It has created tremendous value
and still drives competitive advantage in many companies and industries. But perhaps it's time to
nuance our approach in the following ways:
Customize how and where continuous improvement is applied. One size of continuous improvement
doesn't fit all parts of the organization. The kind of rigor required in a manufacturing environment
may be unnecessary, or even destructive, in a research or design shop. Sure it's important to inject
discipline into product and service development, but not so much that it discourages creativity.
Question whether processes should be improved, eliminated, or disrupted. Too many continuous
improvement projects focus so much on gaining efficiencies that they don't challenge the basic
assumptions of what's being done. For example, a six sigma team in one global consumer products
firm spent a great deal of time streamlining information flows between headquarters and the field
sales force, but didn't question how the information was ultimately used. Once they did, they were
able to eliminate much of the data and free up thousands of hours that were redeployed to customer-
facing activities.
Assess the impact on company culture. Take a hard look at the cultural implications of continuous
improvement. How do they affect day-to-day behaviors? A data-driven mindset may encourage
managers to ignore intuition or anomalous data that doesn't fit preconceived notions. In other cases
it causes managers to ask execution-oriented, cost-focused questions way too early, instead of
percolating and exploring ideas through messy experimentation that can't be justified through
traditional metrics.
Continuous improvement doesn't have to be incompatible with disruptive innovation. But unless we
think about continuous improvement in more subtle, nuanced, and creative ways, we may force
companies to choose between the two.
What are your views about continuous improvement and innovation?
Cross-posted from Harvard Business Online.
Follow Ron Ashkenas on Twitter: www.twitter.com/SchafferResults

3. http://www.huffingtonpost.com/ron-ashkenas/its-time-to-rethink-conti_b_1533226.html