THURSDAY, JULY 31, 2014
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Methodology Innovation Leadership and Lean Six Sigma Opens Door to Innovation

Leadership and Lean Six Sigma Opens Door to Innovation

 

“Invention is 2 percent inspiration, and 98 percent perspiration.”
- Thomas Edison

How much productive and creative potential of its personnel does a business utilize today? An informal poll across a wide range of industries suggests it is less than 20 percent. Why? How people are led, managed and supervised is part of the problem, or perhaps it should be considered part of an opportunity. The working practices and processes people are asked to use to fulfill their jobs is another part of the opportunity. And simply giving people the time and resources to develop and implement ideas is another. Lean Six Sigma improves the quality of management, working processes and applies resources in a targeted way that can dramatically increase the productive and creative potential across a business population.

Trust, Risk and Innovation

One Fortune 100 company that manufactures similar personal hygiene products around the world, noticed that the service levels from some sites were consistently better than average. The company set out to understand the “positive deviants” and what they could teach the rest of the global organization. One element explored was the orientation and style of the site leaders. Whether in Thailand, The Philippines, Columbia, England or Germany, the leaders of the best performing sites had much in common. The site leader in Thailand summarized it this way: “We get breakthroughs when people experiment. They do it because they feel safe identifying issues, contributing, developing and implementing ideas. It is a question of trust.” There is empirical evidence for this thought in research on extraordinary leaders done by Joe Folkman, leadership guru and president of Zenger/Folkman Co. Correlating 360-degree survey results to performance shows that the following leadership behaviors drive productivity:

  • Frequently encouraging others to consider new approaches and ideas (e.g., avoids getting stuck in a “one right way” approach).
  • Finding ways to improve new ideas rather than discourage them.

Lean Six Sigma is an invitation to solve meaningful business problems by developing new approaches and working processes. It combines the power of a structured, fact-based approach with the inclusion of those who are closest to the problems encountered day to day. Acting as sponsors for Lean Six Sigma projects, managers learn to invite the participation and ideas from all levels of the business. The role of the Lean Six Sigma manager is to facilitate the process of creative problem solving, not to provide the answer. His or her most important contribution is to create an environment in which it is safe to challenge the status quo, bring forth new ideas and develop them through experimentation.

The Power of Stretch Goals

The European president of a €2-billion, Tier 2 automotive company used the creation of a common vision with his staff to create a pull for breakthrough thinking and innovation. It started with the question, “What would it do for us, and what would it take, to fulfill customer orders in 24 hours?” The first part of the question was easy to answer: It would set the company apart from the competition and the industry norm of a one week lead-time. What it would take to get there was more difficult. It would require a re-engineering of the entire supply chain. Products would have to be reformulated to be able to postpone final configuration at the end of the chain, closest to the customer. Plants would have to be reconfigured into base and satellite facilities. The reliability of supply would have to be improved significantly so as not to drive up inventory costs. By setting a stretch target of improving service times by 85 percent across a core process, the president had created a pull across functions to rethink, to innovate together.

Europeans tend to discount “stretch goals” as marketing hype. But, most executives know that a company can improve by 15 to 25 percent by getting better at what it already does. Improving by 75 to 85 percent demands innovation. Again, there is empirical evidence that this is exactly what extraordinary leaders do. They:

  • Constructively challenge the standard approaches and find improved processes to get work done.
  • Are energized and excited to take on challenging goals, for which they are held personally accountable.

The contribution of Lean Six Sigma is to visualize the core value streams, think big (future state) and tackle the problems one at time.

Managing the Portfolio of Projects and Talent

How many projects does the average €1 billion international business have going on at any one time? Well over 250 and as many as 400 if they are carefully counted. Most CEOs are astonished at the answer. No wonder they are frustrated at how long it takes to get things done. As companies have flattened their organization structures and stream-lined corporate functions, there are fewer resources available to run special projects. At the same time, more and more critical work (e.g., enterprise resource planning implementations) is cross-functional and global. They fall outside the traditional way companies organize, budget and manage resources.

Managing the portfolio of the most important projects is a management process that should be put in place, if it does not already exist. Setting priorities depends on the clarity of strategic objectives set by the leadership team; therefore, can not be delegated. Staffing strategic projects is a strategic choice as well. Whatever project comes up and needs a manager, most top executives go to the same list of people who they know can do the job. The problem is the list is much shorter than the number of projects that need to be managed. Talent can be developed through Lean Six Sigma projects thereby increasing the pool of project leaders. With a process for prioritizing projects, the company ensures they are working on meaningful projects connected to business needs.

Conclusion: No Absence of Good Ideas

It is a company’s ability to follow through, develop and implement new ideas that drives innovation – not the absence of good ideas. Back to Thomas Edison’s quote, it is more about perspiration than inspiration. If a company opens the flood gates for new ideas from employees via a suggestion system, the issue will not be getting new ideas. The issue will be responding to them. Lean Six Sigma develops the organization’s ability to not just identify, but develop and implement new ideas. Without that, the ideas will land back on the desk of overworked middle managers who are busy keeping the shop running as best they can. The quadruple win Lean Six Sigma offers is:

  • A way for managers to facilitate the process of creative problem solving that brings heretofore disconnected parts of the organization together.
  • Visualization of the current reality and a compelling, innovative picture of the future around which people can rally.
  • Setting stretch goals that pull functions together and challenges the status quo.
  • Prioritization of resources and development of talent to more effectively execute cross-functional, cross-country projects.

Ultimately, behavior and working processes are two sides of the same coin. If an organization wants its people to be more creative and productive, give them the tools and resources to simplify their day-to-day working practices. If a company needs improvements in productivity, challenge employees to pool, develop and implement the ideas that are there waiting to be harvested. Above all, a business should create an environment in which people are encouraged and comfortable to experiment and take risks. That is what leads to breakthroughs, the engine for continuous innovation.

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