Lean Six Sigma and Innovation

Every time I think about the importance of innovation to the future of our businesses, I can’t help but think of a famous quote attributed to Peter Drucker–considered by many to be the father of modern management thinking. It goes something like this:

“Because of the nature of business, it has just two functions, and only two.

Marketing and Innovation. Marketing and innovation make money. Everything else is a cost.”

Now, if you are in the business of manufacturing goods or delivering services, this statement might initially seem a little scary or even threatening. But, please stop and think about it for a moment. What happens when a new innovation hits the marketplace? It’s called a paradigm shift–basically meaning we all get to go back to ground zero for the good or service impacted. If you look at the most long-lasting and successful organizations that make and sell goods and services, you will find a common thread–innovation. Some organizations are legendary for doing this with long-term staying power. Apple Computer might come to mind. How about Motorola and General Electric? The 3M company is famous for setting aside a healthy amount of annual spending to fund entrepreneurial efforts by its employees to bring new concepts to light. Who has not heard the story of Post-It sticky notes being invented, accidentally, while trying for a different result, if I remember the story correctly.

Creating a stronger linkage with Lean Six Sigma (LSS) and innovations being generated is a logical line of thinking. In fact, the body of knowledge making up LSS includes a number of powerful tools that lend themselves nicely to driving innovation. A few examples are:

• Kano–innovation generation and surveying techniques to identify the four quadrants of features and functions in products and services: “indifference,” “must be,” “one dimensional” and “attractive”–or, put another way, an innovation.
• Quality Function Deployment (QFD) techniques–derivatives of QFD are powerful methods to uncover what is really important to customers.
• TRIZ–the art of inventive problem solving is a great tool to generate innovations.
• Design for Six Sigma (DFSS)–and derivatives of this line of thinking and analysis.
• DMADV (Define, Measure, Analyze, Design, Verify) is, in itself, a derivative of DMAIC (Define, Measure, Analyze, Improve, Control), made famous in Six Sigma for problem-solving and project management.
• Kaizen–or “change for the better” projects of cross-functional teams, is closely associated with a lean approach. Through my personal experiences in applying Kaizen to improve marketing effectiveness and generate innovations, it has never ceased to amaze me what is possible if we create the context for creative thinking.

Let’s look a little closer at TRIZ. Here is a quote from a website dedicated to TRIZ: “TRIZ is a problem-solving method based on logic and data, not intuition, which accelerates the project team's ability to solve these problems creatively. TRIZ also provides repeatability, predictability, and reliability due to its structure and algorithmic approach... TRIZ is an international science of creativity that relies on the study of the patterns of problems and solutions, not on the spontaneous and intuitive creativity of individuals or groups. More than three million patents have been analyzed to discover the patterns that predict breakthrough solutions to problems. TRIZ is spreading into corporate use across several parallel paths – it is increasingly common in Six Sigma processes, in project management and risk management systems, and in organizational innovation initiatives.” - The TRIZ Journal (http://www.triz-journal.com/)

Getting back to Kaizen… it is a powerful approach that provides the infrastructure to empower a cross-functional group to find ways to innovate. I have seen this repeatedly in teams working to improve their marketing approaches and, in so doing, spawning those new goods and services that will guarantee their future. For example, one small producer of flexographic printing plates discovered, during their Kaizen process, that they had a goldmine of opportunity that already existed in their company.

It turns out that a program they had started internally to help reduce their customers’ error rates in the copy provided was an innovation they were not maximizing in their marketing and sales efforts. Once the team identified this as a “paradigm shift” opportunity, they then tested the concept for validation (Kano thinking). After validating that they had a good thing, they then perfected the approach and began offering this as a differentiator in the market–thereby maintaining higher prices through being able to tell a convincing story to the buyers of these types of printing plates. Their new approach to marketing this service that is included with the purchase of their products effectively serves as part of their “solution package.” They have since had to hire more staff to keep up with all the new business flooding in. What a great problem
to have!

Powerful innovation-driving tools have always been part of the fabric of LSS. Finding ways to understand them and bring them into the mainstream of future product and service development efforts is a mandate for all types of organizations of all sizes. As my example illustrates, even a 20-employee company can use LSS tools as the basis to out-innovate the competition. This just could be the “ultimate weapon” to helping us keep good jobs at home... something in which every stakeholder is interested.