This document discusses the relationship between Six Sigma and innovation. It notes that while Six Sigma focuses on efficiency, process improvement, and minimizing risk, innovation focuses on developing new ideas, taking risks, and operating outside the box. The document advocates that both are needed for business success but can compete against each other. It provides examples of how some companies have struggled by focusing too much on one over the other. The document concludes that the ideal is to integrate Six Sigma and innovation so that process excellence drives sustainable growth and new opportunities.

1. Six Sigma & Innovation – Co-Exist vs. Compete
An Inside Look
PHILIPPINES :: MALAYSIA :: VIETNAM :: INDIA :: SINGAPORE :: INDONESIA

2. Learning Bites
• Comparison of Six sigma & Innovation
• The need for successful business
• Integration of Six sigma & Innovation
• Six sigma & Innovation leads to business growth
• The success factor of both working together

3. Six Sigma vs. Innovation?
Six Sigma & Innovation seem to be at crossroads!

4. Six Sigma & Innovation @ Crossroads! :: Case in Point
“Whether the relentless emphasis on efficiency had made 3M a less creative
company?”
Operating margins went from 17% in 2001 to 23% in
2005.
“At the company that has
In first full year, capital expenditures slashed 22%, from always prided itself on
$980 million to $763 million, and 11% more to a trough drawing at least 1/3rd of
of $677 million in 2003 sales from products released
in the past five years, today
Sales, capital expenditures dropped from 6.1% in 2001 that fraction has slipped to
to just 3.7% in 2003 only 1/4th .”
R & D funding constant from 2001 to
2005, hovering over $1 billion a year
“Innovation is a numbers game: You have to go through 5,000 to 6,000 raw ideas to find one
successful business.“
“Six Sigma would ask: Why not eliminate all that waste and just come up with the right idea the
first time?”

5. Six Sigma vs. Innovation?
• Inject process efficiency • Brave undiscovered,
& productivity uncertain territory
Six Sigma
• Do things right • Do the right thing
• Low Risk Tolerance • High Risk Tolerance
• Top-Down approach Innovation • Bottom-up approach
• Inside-out Focus • Outside-in approach

6. Business Capability Model
CONSTITUTES Maturity /
Key Processes
Consistency
Workforce Capability
ENABLES
Process Capability
PREDICTS
Performance

7. Organizational Process / Performance Maturity Model
Organization performance irrespective of industry or size shows specific pattern of
maturity with distinguishing characteristics
5 Integrated
Excellence
4 Innovation 4 Operational
Excellence
Beyond
3 Compliance
2 Compliance
1 Pre Compliance

8. Innovation – Types & Needs
“CEO’s today face mounting pressure to innovate, yet finding ways to actually
enable innovation remains a challenge for many”
• Provides significant operating margin growth
Business • Differentiates from rest of the pack and signifies
change
Model • Typically a phenomenon when successful
Product/Service • Focuses on delivery model innovation / new
/Market market penetration / partnerships for promotion
• Not a day-to-day innovation
Operational • CEO’s ranked top of priority lists*
• Drives efficiency / effectiveness in products &
services
* - Research Study by IBM

9. Six Sigma and Innovation working together – How?
LSS SIfT • Optimization
Lean Six Sigma + Systematic Innovation
for Teams
• Sustainable Growth
Promote and ensure strong factual basis for implementing any creative ideas
Deploy a cross-functional approach to problem resolution & guide users through
sensing, understanding, deciding & acting in ways to create value
Must incorporate creativity into the operational process excellence initiatives! – to
come up with improvement opportunities
Take into account the “Business Voices” and balance them out to ensure optimal
results

10. What are we really looking for…
PRIORITY???
EFFICIENCY & INNOVATION &
EFFECTIVENESS CHANGE
1 2

11. E&E vs. I&C – A Fairplay?!
SCENARIO 1:
Efficiency &
Effectiveness YES Innovation: NO Undesirable &
Unsustainable
SCENARIO 2:
Efficiency &
NO YES
Unsustainable &
Innovation: Improbable
Effectiveness
SCENARIO 3:
Efficiency &
Effectiveness YES Innovation: YES IDEAL

12. Key Success Factors & In Summary…
While most companies in the industry have mastered the art of teaching and implementing six
sigma, integrating innovation into the scheme of things is the challenge.
Some key pointers to make the process easier…
An Innovation vision based on factual customer and market insights
Leadership committed to perpetual innovation
Alignment across the extended enterprise
Organizational capabilities that make innovation habitual

13. Key Questions to ask yourself…
Do you have a clear vision of where you want your company to be in two years? In five
years? In ten years?
How closely tied is this vision to the needs of your current and target customers? And is your
understanding of these needs based on actual assessments or assumed information?
Will this vision require innovations in your business model? In your products or services? In
your markets?
What will you need to do at the operational level to enable and drive these innovations?
To support innovation, what changes will be required to your management approach,
organizational structures, metrics and skills?

14. “If you do what you’ve always
done, you’ll get what you
always got!”
- W. Edwards Deming

16. Thank you very much!
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