Process vs. Innovation

Many pundits argue that the current path to competitive advantage is by out-innovating the competition. This is as opposed to focusing on being more efficient than the competition. The unstated theory being that one of these two approaches is the strategy of success. A cursory review of business history shows that these two pendulum end-points are touted as the “secret to success” as the pendulum swings over time.

Since the pendulum has moved back to innovation, commentators are now discussing whether 6-Sigma or business process management is compatible with innovation success. (The fact that the two terms 6-Sigma and business process management are considered interchangeable is its own problem, that I’ll get back to later, either in this post or another, depending on how long this one turns out to be).

What got me going on this was an article in the June 11, 2007 issue of Business Week on 3M’s innovation crisis. I had wondered what had gone on with 3M the last several years as they didn’t seem to be their innovative self. However, like most of us, while I was curious, I didn’t get around to looking into it. So, I was glad to see that Business Week was going to “catch me up.” They did, but they also tipped me over on one of our pet peeves.

The gist of the article is that a former GE executive, James McNerney, hired by 3M as the first outside CEO, ruined 3M’s innovation engine by blindly applying 6-Sigma (or process, they go back and forth on this as if the two were the same thing, but again, I digress) everywhere including in innovation, where it cannot work. The result is a company whose innovation engine has stalled to the point where rather than 1/3 of sales coming from new products; that number has dropped to 25%. Although profits have been up substantially, there is a belief that this could not be sustained as the new product engine slowed down. Fortunately (or presciently), McNerney found another job running Boeing, so he won’t be around to live with whatever crop he sewed.

Anyway, what tipped me over was the theme of the article on the relentless focus of process management and/or 6-Sigma to everything. Especially to innovation and the resulting destruction of 3M’s innovation engine. The implication being that process management and/or 6-Sigma has no business in innovation because it will kill innovation. That’s just not true … provably.

But I guess to convince you I will have to deal with the process management/6-Sigma misconception. 6-Sigma is a tool. It is a set of methodologies designed to remove variation from processes. If process variation is a root cause problem of poor performance, than 6-Sigma is an appropriate tool. If process variation is not a root cause problem of poor performance, than 6-Sigma is probably not the right tool.

Unfortunately, like other methods before it such as re-engineering, 6-Sigma has been redefined by consultants and some executives to mean process improvement management. It is a useful method for improving processes where limiting variation is an important goal. It is not useful in many other process improvement projects. However, as the old saying goes, when the only tool you have is a hammer, everything looks like a nail. Using the 6-Sigma “hammer” on the front-end of the innovation process is unlikely to help anything … except consultant’s billing rates.

The creative front-end of the innovation cycle is not about reducing variation, it’s about exploration. One former 3Mer summed it up this way, “… there is no way in the world that anything like a Post-it Note would ever emerge from [a 6 Sigma] system.” To which I say, why would you expect it to? 6-Sigma is about reducing variation in processes not coming up with breakthrough products. Who on earth would think it is a good idea to apply 6-Sigma to creativity? Oops, I guess a well-regarded former GE executive, so what do I know?

Does that mean that 6-Sigma or process improvement management has no place in the innovation process? Of course not. First of all 6-Sigma is a process improvement management method and it may be useful on the back-end of innovation where you are moving the product into initial production and market launch. I can make a substantial case that reducing the variations in getting new products into production and into the market are critical needs. And to blindly suggest that process improvement management is not right for innovation is just ignorant.

Rigid processes don’t work well in flexible-need environments. However, to suggest that process management doesn’t add value in adaptable environments is misguided. If you ever have the unfortunate need to be in a trauma center, you better hope they have a work process that will save your life and that that process is adaptable in case what they originally think they are dealing with is not actually the issue.

Every process is perfectly constructed to achieve the results it is achieving. If you are not getting the results you want from your innovations, you need a better process. The fact that 6-Sigma may not be the right tool to improve the process does not imply that it is not a process and that business process management methods can’t be used to get improved results.

Mitch