Monday, March 03, 2008

Six Sigma Under Tension

A friend of mine passed along an insightful article on the challenges of balancing efficiency and creativity at 3M. It describes how James McNerny, the previous CEO helped "turn-around" the failing stock price through aggressive cost cutting, discipline, and efficiency measures, modeled after successes realized at GE. This included the introduction of an army of Six Sigma "black belts" trained to measure and eek out every opportunity to improve the organization.

The program had its desired result: predictability restored, conformance enforced, and profitability returned to target levels. Despite this success, dangerous side-effects were beginning to emerge. Break-through innovations were no longer the hallmark of 3M, a company that regularly generated a large amount of its revenue from newly introduced products. Patents based on new research also began to dwindle.

When McNerny left for a position in Boeing in 2005, he was replaced with George Buckley. Buckley has used his keen insight into the strengths of 3M to re-introduce policies and practices that encourage innovation. Under his guidance, 3M is returning to it's innovative roots, attempting to maintain a healthy balance between it's recently gained efficiency and former creativity.
"You cannot create in that atmosphere of confinement or sameness," Buckley says. "Perhaps one of the mistakes that we made as a company—it's one of the dangers of Six Sigma—is that when you value sameness more than you value creativity, I think you potentially undermine the heart and soul of a company like 3M."
There's plenty of lessons for innovation-driven companies seeking to balance creativity and efficiency, direct from the experience of 3M. Read the full article on Business Week.

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