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Fallacy of the Six Sigma Program  

2016-01-10 13:45:17|  分类: Business ethics |  标签: |举报 |字号 订阅

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       [i]When the smart and intelligent folks begin to outwit each other, there will be a large output of trickeries, misinformation, manipulations, cheatings and large number campaigns or promotions, rallies, plans of actions, policies or strategies that are false or hypocritical. Few people realize the six-sigma program falls neatly into this category. It was a fallacy. The six-sigma program had produced a platoon of marauding bandits (Black belts graduates) who go about stealing the credits from the site people, and often leaving behind a trail of destructions. 

Let me begin with a simple Chinese word, 哄 pronounces as hōng. It is a pictogram that consists of two root-components: namely; “口”, pronounces as kǒu and “共”, pronounces as gòng. The left-hand-side root-component “口” represents the use of one’s mouth to speak or produce sounds. The right-hand-side rot-component “共” means, in line with you. The meaning of 哄 is to persuade by specifically pleading or flattery or cajoling that “I am in-line with you”. Its closest meaning in English is coax.

This word is often used in the phrase, “你在哄女孩子.” Meaning, you are cajoling a lady. This word is often used in conjunction with another word, 骗 (pronounced as piàn) to form a phrase, 哄骗 (pronounces as hǒngpiàn) meaning to cheat or deceive. To be exacting, it means to cheat or deceive by telling someone that you are always in-line with him or her. Why must I bring in such word and parade its subtlety?

The six-sigma program has its birth at Motorola University. In Motorola, it is defined as: A management driven, scientific methodology for product and process improvement which creates breakthroughs in financial performance and Customer satisfaction. To achieve Six Sigma quality, a process must produce no more than 3.4 defects per million opportunities. An ‘opportunity’ is defined as a chance for nonconformance, or not meeting the required specifications. This means we need to be nearly flawless in executing our key processes. It was Bill Smith who presented Six Sigma idea to Bob Galvin in late 1985. Two years later, in 1987, Motorola founded the Six Sigma improvement program headed by George Fisher at Motorola's Communicators Sector. The graduating trainers of the Motorola Institute are called six-sigma Black belts. Black Belts have a thorough understanding of all aspects of the DMAIC model in accordance with Six Sigma principles. The Black Belts are supposed to visit factory sites and seek out opportunities for the execution of six-sigma projects.

While incubating at Motorola University, six-sigma did not catch on to be a fad, not until General Electric picked it up in 1990 and by mid-1990 the world went wild on six-sigma. Unfortunately or by its own fate, it busted itself at around mid-2005. It was overwhelmed by the next fad, the lean production system. Today, some organization merged the two together as the lean sigma program.

The rise of the six-sigma fad

Jack Welch’s rein in General Electric (abbreviation, GE) was from 1983 to 2001 where which he led GE share price from a low of USD3.50 a share to USD60 a share. However, one year after he left GE, GE shares plunged by one-third. By the second year, it further plunged to less than 1/6 its peak value. Its lowest point was less than USD10[1]. A true leader is measured by the sustenance of his works or deeds long after he has left the scene. Jack Welch left a trail of destruction in GE share value.     

Fallacy of the Six Sigma Program - 行天麒麟 - 论老子

 Jack Welch is a particularly very difficult boss to please. On any day, should he dislike any one of his staff, soon he will receive a barrage of hurts and abuses from Jack. Worse, he was forced to resign from GE, one way or another. The people around him gradually cultivated a feel-good ethos, always trying to please him and to make him feel good. In other words, they were always seeking a Feel-Good-Factor to please him. In particular, he liked the six-sigma expression, ‘scientific methodology for product and process improvement which creates breakthroughs in financial performance’. In essence, what he liked was a direct association to the financial performance by any product or process improvement.

Swiftly, his subordinates and everyone down the hierarchy then began to fervently exploit the use statistics to blow their own trumpet on the financial gains to the company’s bottom-line. They are trying their best to 哄骗 or deceive Jack by telling him that they were always in-line with him that is, making huge financial gains for the company. Jack Welch was very happy with this kind of reporting not because he did not know they are deceiving him. More so, he needed large amount of such implying reports to deceive the investors[2]. Soon the pressure built up for more of such made out reports. The calling was to execute project, and dubbing them as six-sigma projects. This was how the six-sigma program in GE was born and the world caught on the bandwagon feverishly. Everyone sees the huge financial returns of six-sigma projects. But no one saw its adversative harmful side. 

The demise of the six-sigma program

[ii]In general, the more intelligent and witty Black Belts have always been able to overcome the other employees because he was scheming and crafty. [iii]These smart and witty executives racked their brains and craftily do anything they want purely out of their personal interests. For that selfish reason, whenever the Black belts walked into the factory shop floor, they stole the juiciest piece of opportunity to perform a kaizen that delivers the highest financial gains. Like a gush of wind, he left, leaving behind the local employees to continue to carry out kaizen on opportunities that produce modest financial impact. At this juncture, you and Tom, Dick and Harry, invariably accolade the Black belts for having done a great job! I do not deny that either.

On another perspective, do you understand a certain aspect of the human nature? [iv]The ordinary people understand the opposites: for examples, the state of ‘have’ and ‘have not’; the deep contrasting situation between an ‘easy’ or ‘difficult’ process or development; the physical dimension of an object can be described as 'long' or 'short'; to describe something as trending 'higher up' or ‘downwards’ and etcetera. It is here where the deadliness of the six sigma program lies. When the local employees begin to know something is good (a particular six-sigma project had contributed huge financial savings or gains) or everybody else praises the six-sigma project performed by the Black belt was excellent, they will naturally reject things (inclusive of the Black belt executives) that they think are widely accepted as not favorable for them because they had stolen their credits and thus, stay away from them completely. In no time, the Black Belts were not welcomed at all. Often it was the site leaders[3] who blocked off all possibilities of a project by the marauding Black Belts. Marauding is the correct adjective because the Black belts are usually organized as a staff function personnel and not line function resources. They are supposed to visit different factory sites. Knowing that they are there only once and must produce the largest financial savings or gains in the shortest time, they ‘steal' the juiciest opportunity for a six-sigma project.

Here is another even more ruinous perspective that most CEOs did not see. The local employees seeing that the Black Belts had already stolen the choicest opportunity and proudly bragged about their success in bring huge financial gains to the company, they were totally dejected. This reaction is normal. There is a saying by the Chinese philosopher Han Feizi: He who rules the world must understand human’s emotional feelings. From then on, despite there are ample opportunities for them to continue carry on performing more kaizen, the fire in their hearts were devastatingly extinguished. You may say that immediately after the Black Belts left the site, kaizen inevitably comes to a catastrophic end.

Compare and contrast the uneventful six-sigma program induced dreadful death of kaizen in these companies, in Toyota Motor Co. Ltd. Eiji Toyoda understood this leadership principle very clearly. That is [v]not letting the people to see or get to know something that they can aspire to compete for (instant) fame and reward is the best approach to avoid provoking the people’s egoistic desires and all too often, a culture gets corrupted because of their strong self-interests. In the entire history of Toyota Motor Co. Ltd. right from the beginning until today, no one ever present the financial savings or gains of a single kaizen.     

[4]To President Eiji Toyoda and his deputy Taiichi Ohno, [vi]when the kaizen movement turned into a custom or ethos and was about to rise in form, to them kaizen looks like a very simple and mundane thing to the extent of not giving it a name to describe its evolution and even totally ignore it, altogether. They merely used the phrase, kaizen as an everyday encouragement to their employees to change for better. When it does not have a simple name to begin with, the kaizen movement in Toyota Motor Co. Ltd. did not attract the attentions of the early adopters even among the Japanese car factories to the point no one else pursued it fervently. Even back in Toyota Motor Co. Ltd. where the desire of its employees is not even aroused to pursue it enthusiastically, as a result the new custom or ethos took a quiet and gradual process to weave into its existing organization culture. Naturally, the evolution of the new kaizen culture occurs in a very stable and steady state.

[vii]The employees in general, are difficult to manage especially a huge organization in the like of General Electric that is always most sought-after by the brainiest, smartest and witty university graduates. This implies Jack Welch who tried to be smart and cunningly plotted to drive the implementation of the six-sigma program programs out of his whims and fancies, he is classified as a betrayal of the organization and the shareholders included. This is an apt branding because GE share price plunged to 1/6 of its peak value in a matter of two years after he left GE.

 This day and age, [viii]it is difficult to advise the CEOs to follow strictly to the teaching of refraining from using any form of wittiness or fraud and deceptions to run the organization because of two things. One, the smart aleck ‘warren-buffet’ investors who in the first place do not know a single thing of how to run a business operation keep piling on the pressure to boost up the share price they are holding. This led to point two. Two, the remuneration[5] of the CEO is tied to the reported profitability of the company, giving the CEO a heavy-duty motive to boost his company share price to the ecstatic joy of the ‘warren-buffet’[6]. Consequently, you can so it is their strong self-interests that prevented them from avoiding the use of some form of deception, especially to deceive the ‘warren-buffet’ class of investors. Should they circumvent their own defeat to greed the benefits in which the customers, employees and shareholders would enjoy naturally increases a hundredfold.    

Having understood the entire six-sigma program is evil by nature and is capable to destroy kaizen akin to the Genghiz Khan’s golden horde that razed many civilizations along their marauding path, would you immediately begin to [ix]teach your employees not show off or seek for praises or admirations from the execution of kaizen and would rather they stick to their humility and not brag or sing in praises of their modest personal achievements or in some quite insignificant advantages, such as having contributed to much financial gains to the company. This will gradually build up a common humble behavior where the people speak modestly about themselves and when getting kaizen activities done, they execute them in humility. Then only the employees will get accustomed to love each other, feel compassion about someone’s woe or unpleasant plight and mutually kind to each other always without the slightest sign of diminishing or losing traction. This is an absolutely wonderful environment where people interact with each other based on love, compassion and kindness, and quite naturally let rise to the fountain of teamwork where it cultivates beyond doubt an admirably congenial kaizen organization under your caring and benevolent leadership.

Summing up, stop the people from pursuing fame and vanity and would rather the employees take upon themselves a simple and humble lifestyle. Keeping to a modest attitude, each person can then easily open up his magnanimous heart to welcome anyone who can contribute to help him to carry out kaizen. If everyone’s heart is very humble and accommodating to all others, the interactions between workers is almost as expected heavily influenced by their mutual love, compassion and kindness. Broadly speaking, this is exactly what an organization should be and the organization is said to have gone back to its most intrinsic original state. This is what a true kaizen organization is all about.

[1] Now, Jan 9 2016, it is at USD24.

[2] By the way, Warren Buffet was the single biggest shareholder of GE. When GE share tank a large chunk of Warren Buffet’s paper gain was wiped out.

[3] See ‘Working on a project that was outright rejected by the site leader’ in the next chapter: The Fallacy of Lean Production.

[4] Copied down from the second paragraph of “Chapter 4: Drop the word, Kaizen” in order to enhance the importance of how kaizen in Toyota Motor Co. Ltd. had grown organically.

[5] The shareholders as a group knows how to dangle the highest rewards or special privileges wants to do something, definitely, they do so not because they found that it is the right time to do so but rather for an immediate return, short of which, it is like rolling up their sleeves and violently throw away their effort (including what they had dangled as an inducement earlier).  This is an adaptation from www.ericwoonct.blog.163.com, section 《老子全始全终》第38章: MP15.

[6] This new phrase was coined not for fun. Actually, Warren Buffet is the single biggest shareholder of GE share. His paper wealth went up and down in-line with the fate of GE share.

[i] Ericwoonct.blog.163.com, section 《老子全始全终》第18章: LP26.

[ii] Ericwoonct.blog.163.com, section 《老子全始全终》第33章: L83.

[iii] Ericwoonct.blog.163.com, section 《老子全始全终》第73章: LP192.

[iv] Ericwoonct.blog.163.com, section 《老子全始全终》第2章: MP1.

[v] Ericwoonct.blog.163.com, section 《老子全始全终》第3章: LP6.

[vi] Ericwoonct.blog.163.com, section 《老子全始全终》第37章: LP96a, b, c.

[vii] Ericwoonct.blog.163.com, section 《老子全始全终》第65章: LP173, Lp174.

[viii] Ericwoonct.blog.163.com, section 《老子全始全终》第19章: LP29.

[ix] Ericwoonct.blog.163.com, section 《老子全始全终》第28章: LP61a.

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