Why Lean Six Sigma Works Only Sometimes

In a previous post I took out my frustrations on our organization's Lean Six Sigma (LSS) effort in a vitriolic manner. A comment on that post got me to thinking in a more reasoned way. Why is it that I don't like LSS?

It works for some companies, sometimes.

LSS is a technique for reducing any effort to it's component activities and then analyzing those processes for ways to become more efficient. GE is held up by LSS advocates as a LSS success story. I haven't researched the story, but apparently they experienced a great increase in profits from the use of LSS.

LSS works great if efficiency is your problem. It doesn't work so well if your problem is that you have a lousy marketing department, you signed a bad contract or your business model has grown out of date. LSS requires you to spend a great deal training your people and keep full-time LSS experts on staff. It is presumed that the efficiencies they uncover will pay for the effort. I would argue that this is a fallacy.

An organization using LSS typically prioritizes candidate LSS projects based on their Return on Investment (ROI). It tackles the ones with the best ROI first. Meanwhile, since the LSS experts are on staff, the cost remains constant. The following chart shows what happens over time.


Conceptual comparison of LSS costs vs. returns as a function of LSS project.
Eventually you get down to the projects whose ROI is less than your recurring LSS costs. After that point, LSS is a loser. How many organizations out there do a good job terminating bad projects? Not many. Most corporate efforts outlive their usefulness by a longshot and internal process improvement ones are no different. LSS is just one more.

Profit is income minus expenses. In gross terms, LSS helps you reduce your expenses by making you more efficient. Expenses have a minimum level. If you manufacture drive shafts, you can't get the steel or machinery for free. LSS will help you asymptotically approach that minimum cost. If you're already close to that minimum cost, then LSS is not a good fit.

I would bet that GE and the other LSS success stories were cases where the companies biggest problems lay in efficiency. If your problem is somewhere else, such as corporate branding, strategic vision or company infighting, then LSS is not the way to go. I would also suggest that LSS eventually wears out its welcome as the chart above shows.

I still don't like it, but at least now I know why. I wonder what our Chancellor of the Exchequer thinks.

For more posts on business, management and such, visit this week's Carnival of the Capitalists.

Lean Six Sigma is a Fraud for Engineering Consultancies

Where I work, we use Lean Six Sigma. LSS is a formal method for tracing work flows and processes in order to find inefficiencies. It's a total fraud for our organization. We do not measure the cost of implementation and overstate our results to upper management so that it looks like a success. Because our managers have been forced to use it, there is no effort to find the true value of LSS and our middle managers must report only good news. In short, LSS encourages organizational corruption. It's like being part of Mao's government during the Great Leap Forward. We even get cute little emails from our upper management talking about LSS success stories. Since I work with some of the LSS teams and am privy to our financial information, I can see right through the propaganda.

I'm waiting for the one that reads "Once more, glorious People's Committee on LSS meets Five Year Plan production targets!"

We make money on labor. LSS requires us to take people off of direct projects and put them on overhead to become full time LSS "black belts". If our LSS effort was ever to break even, we would have to release a commensurate number of people currently working full time on overhead. That has not, will not and cannot happen. It is mathematically provable that LSS will always be a money loser for us.

I was doing a little research on the net and all I could find while searching on "Lean Six Sigma Fraud", "Lean Six Sigma Failure" and so on were endless websites from consultants who will help you implement LSS. I think that tells you everything you need to know about LSS.

Update: I found the Wikipedia article on the Great Leap Forward (linked above) and I've edited one particular paragraph I found eerily similar to our situation. It's pure poetry. Just like Edgar Allen Poe's work.

Despite these process improvement innovations, the business climate in 2006 was very favourable and the profit promised to be good. Unfortunately, the amount of labour diverted to LSS meant that much of the business was left to rot unperformed in some areas. Although actual work output was reduced, local officials, under tremendous pressure from the central authorities to report record profits in response to the new innovations, competed with each other to announce increasingly exaggerated results. These exaggerated results were used as a basis for determining the amount of funding to be taken by the State to supply other efforts. This left barely enough for the actual operations costs of the organization, and in some areas, financial starvation set in. During 2006 we continued to be a substantial net exporter of profits, despite the widespread financial famine experienced in the workforce, as upper management sought to maintain face and convince the outside world of the success of their plans.

For more posts on capitalism, visit (what else?) this week's Carnival of the Capitalists.

Update 2: Dennis Howlett (owner of the world's smallest blog :-) ) asked, "Can you say more about how LSS encourages the kind of corruption you're alluding to please? What is the fatal flaw and how is performance as measured in your company out of whack with what the financial results show?"

LSS was chosen without regards to what we do. As a consultancy, the technical aspects of each job are different as are the maturity levels of the projects we are working on. Sometimes we work on equipment installations, sometimes we work on policy IPTs, sometimes it's basic research and so on. LSS relies on repetitive actions to achieve increases in efficiency. In our case, the only repetitive actions come in administrative support.

Given the state of the art in administrative support, just how much more efficiency can you squeeze out of it? And what happens when you do? In order for LSS to break even, you'll have to fire as many administrative personnel as you have LSS black belts and then get rid of some more to account for the time your green belts are now devoting to tasks unrelated to the customer. What are you going to do, have your assistants answer three phones at once? Have intelligent agent software make purchases for you?

The fatal flaw in LSS is the addition of people onto overhead in the form of black belts and green belts. If there was no such increase in overhead staff, we could have done a quick survey of the situation, junked the whole idea and kept on going with what we do. Instead, we now have full-time bureaucratic positions for LSS slurping down the profits, returning next to nothing with the standard resistance to firing them.

In short, they are a recurring cost, they produce almost nothing and they are hard to get rid of. Rather than be the only middle manager who reports that their LSS team has yet to yield results, we lie about it. Hence, corruption.

Perhaps the saddest part of all is that our LSS black belts are all really good people. It's not like they're trying to hide their results or puff themselves up. They're all doing their best with a technique totally ill-suited to our work.

Thanks for the question.

Update 3: Dennis has a larger site. Here it is.

Another Lean Six Sigma Failure

I've written in the past about our organization's idiotic embrace of Lean Six Sigma (LSS). My proposed slogan for LSS came home to roost this week as a near-riot broke out during an all-day LSS training class for senior employees.

My proposed slogan was, "It's better to have your employees wonder if you're a complete idiot than it is to send them to Lean Six Sigma training and remove all doubt."

Our organization has decreed that all employees must go to LSS introductory training and all those above a certain pay level must attend an all-day LSS training session as well. The attendees for these all-day sessions are assembled randomly. The session in question managed to get a perfect combination of attendees who had been with the orgaization for a long time, were very business-savvy and were not afraid to speak up.

They tore the trainer apart.


LSS trainers attempt to put down an insurrection in the classroom.
Most of us have done our own calculations on the costs and benefits of LSS. It's a very ugly calculation. We start with a huge loss and go downhill rapidly. Employees are angry about the training and the costs which are hitting at a time of declining discretionary funds and increased mandated demands on our time. The rioters in this session went after the trainer, demanding that he make the business case for LSS. There is none to be made and every one of his flimsy answers resulted in further attacks.

I didn't go to this one, but I'll attend one in the near future. A friend of mine, on break from his session, came down to my office and asked me to shoot him so he didn't have to go back. Between contemplated murder-suicide pacts and rioting in the training sessions, I'd say this is another LSS success story.

Well, at least that's the way it will appear in our bi-weekly edition of Pravda corporate newspaper.

A Post-Mortem on a Lean Six Sigma Training Disaster

Yesterday I was part of a group of 35 senior professionals from my organization given a one-day Lean Six Sigma (LSS) training session. LSS is a process improvement technique that seeks to remove wasted effort from repetitive processes. It is commonly used in manufacturing firms. We are an engineering consultancy and do not fit the mold of the typical LSS adopter. The LSS training session turned into an absolute turkey shoot of the instructors. It answered the question, "What would happen if you had Soviet-style management without the Soviet security apparatus?"

Without the threat of the NKVD coming in and shooting us, we tore the trainers apart. I will hereby admit to be one of the chief attackers. I've worked at this place a long time and my cerebral cortex is connected to my mouth with only the most rudimentary of filters in between. I can't stand stupidity and I hate lies, both of which filled this training session. The training was supposed to give us a fundamental understanding of how LSS worked. Had they stuck with that, we would have sat there, quietly and endured the day as we have so many other times when we've been subjected to this kind of nonsense. Instead, the trainers tried to sell us on the idea as well and used all kinds of examples of LSS success, none of which applied to us.

 Before I completely lose my normal readers, let me give you an analogy. Imagine that Nike spends a lot of time and money improving the quality of their shoes, but does not pass the cost of this on to their customers. Profit being income minus expenses, would go down as Nike's expenses would rise, but their income would not. That's LSS for us. We're expected to pay for the LSS efforts, but we can't pass the costs on to our customers. It's simply a tax on our organization, forced on us from above. Since the audience consisted of people who had worked at the organization for 20+ years each and were all leaders in one way or another, there was no way the instructors were going to pull anything over on us. We all knew more than they did. As a marketer myself, I can tell you that's about the worst situation imaginable, trying to sell an inferior product to customers who know more than you do. It was an absolute turkey shoot.

 
An attendee takes aim as an LSS trainer is launched into the air.
I don't think any of us wanted to beat these guys up. One of us even asked, "Are all of these sessions this hard for you?" The instructor replied, "Each one is worse than the last." We've gone through these kinds of enforced training before. Since the training is mandatory, there was nothing to sell.

One of the cardinal rules of selling is never talk past the point of sale. That is, once the customer has decided to buy the item, you can't do anything but hurt yourself if you keep talking. In this case, the sale was made long before we entered the room. There was no point in trying to convince us that this was a good thing, since it didn't matter what we thought any way. Being Americans, I think we all walked into the room with a strong dislike for having decisions made for us, so we were strongly biased against the sales pitch ahead of time.

 Last night I felt bad for some of the things I said. I compared the effort to Mao's Great Leap Forward where local Chinese leaders lied to the Communist government about the annual harvest which led to decisions by the Chicoms resulting in tens of millions of Chinese starving to death. The analogy was apropos, but by that time, it was clear that the room had been lost to the trainers and there was no point in continuing the beatings. Unfortunately, they didn't pick up on this either and allowed the discussion to go on, alternately telling us we had no choice in the matter and trying to sell us on the benefits. The discussions during the training session were professional, if a bit testy, so at least no one ended up being called names. In retrospect, that's probably about the best that can be said for it.

Killing Innovation with Lean Six Sigma

Within the workforce at my organization, we have a subpopulation of folks doing basic research. They work in all kinds of technical fields including physics, biology, chemistry and math. They are considered a crucial part of the organization. To support their research, we have a technical library filled with books and periodicals of all kinds. We've been in existence for many decades and some of the technical journals in our collection date back to the turn of the 20th Century.

For a bookworm, it's a lovely thing.

As the Age of the Interweb Tubes dawned, our research population was able to find a larger and larger percentage of their answers on the Internet and needed the library less and less. Having said that, because the content on the Internet is typically very shallow and it is difficult to read, say, partial differential equations textbooks on a computer screen, the technical library's necessity to our researchers did not diminish.

That's important enough to repeat and emphasize. Just because you need less of something, does not mean you can do without it. A Prius needs less gas than a normal car, but without any gas at all it's just an expensive storage shed on wheels.

And so the walk-in customer population of the library shrank while the library's size stayed the same. Like it or not, books occupy physical space and the size of a library cannot be reduced without getting rid of books. Because we pay space charges for every building, the cost of operating the library remained constant despite the reduced walk-in traffic.

Enter Lean Six Sigma (LSS). For those of you who don't understand LSS you can check out my long history of rants that explain it in hideous, graphic detail.

Several LSS events* were held to determine the future of the library. It was decided that we needed to reduce the size of the library by about 60%. That meant getting rid of lots and lots of books and obliterating all reading areas within the building. The place now looks and feels like a 99 Cent Store.


Our new technical library.
Now that the decisions have been made and irreversible actions have been taken, our research community is completely enraged. Meanwhile, the effort is being considered yet another LSS success story.

And how much did we save?

About the cost of one full-time LSS black belt.

We used LSS to maim our technical library and insulted, disabled and demoralized one of our most important groups all so we could pay the LSS goon. Unreal.

* - An LSS event holds the same promise as a nuclear event. The best course of action should you encounter one is to flee or if that is not possible, hide in a shelter. Following the event, I highly recommend War Crimes Trials against the people who precipitated it in the first place.

Our Process Improvement Will Continue Until Processes Improve

I went to a corporate off-site yesterday and did my best to avoid playing the role of the Corporate Crank. I almost managed to escape without standing up and saying something. At a break in the morning I had to call a friend at work and rant to keep my head from exploding. Here's a few tidbits.

Perhaps the very worst part of the day was a certain fellow who gave a talk on what other corporations were doing to innovate. Innovation is a very big deal in our organization. We're always looking to innovate. Yep, that's us. Innovative innovators innovating innovatively.

I've asked this fellow any number of times to start a blog on our corporate blog site, but he always refuses. Instead, at the end, he gave his email address and said he would send his PowerPoint slides on innovation to anyone who wrote and asked for them. I felt like Dr. Strangelove at the end of the movie where he struggles to maintain control of his body. I won that fight and managed to stay in my seat and not blast this guy in public. That's when I called my friend and told him I would be in County Jail in an hour and asked, would he bail me out? He thought I was serious for a minute until I explained. Sorry about that, Roger.

Me, during the meeting.

The part where I finally stood up and asked some too-pointed questions was, of course, our Lean Six Sigma (LSS) talk. It turns out that our cheerful, little LSS gnomes had done an LSS event examining just why our supervisors don't have any free time.

Oooh, oooh! I know! Pick me, pick me! Is it because we force them to do all kinds of idiotic process improvement training and generic process improvement efforts in addition to their normal jobs?

We have lots of different sub-units. Each has a different business model, a different set of customers and a different structure. LSS works when things have little variation. This LSS team analyzed the supervisory situation and discovered, much to their horror, variations in our processes!

Variations are evil. They must be stamped out. LSS cannot cope with variation. That's when I stood up and asked if, given the diverse nature of our business units, variations weren't TOTALLY FREAKING EXPECTED?

The poor devils on the LSS team, being people who you would not entrust to run a Dairy Queen, hemmed and hawed and mumbled. I made the mistake of boring in, still ticked off from our PowerPoint slides on innovation. That was not a good move. Finally our CEO stood up and staunched the bleeding, telling everyone how important LSS was and how we needed less variation to achieve process improvement.

This is how you achieve a reputation as the grumpy crank in corporate meetings. I'm not sure if I'm proud of it or not.

Another Lean Six Sigma Success Story!

Preface: Lean Six Sigma (LSS) is a process improvement technique made by business consultants who never get out of the house and meet real people for improving efficiency by examining a process and looking for ways to make it better.

At my work, we recently received an email with a rah-rah speech about our implementation of LSS. In it, the author talked about one of our greatest LSS success stories to date. Apparently, one of our army of LSS droids had just completed a project where we saved an estimated $16,900 annually.

$16,900 annually! That's fantastic! And all at only a cost of millions of dollars a year! In honor of this glorious event, I've come up with an animal graph to show how well we're doing. Here it is.


Cost vs. benefits of LSS. The giraffe is the costs, the ant is the benefits
If we stack up enough ants, we can surely get something as big as a giraffe, right?

I've got lots more on LSS. Check it out.

Update: Ron Pereira, our amigo over at the Lean Six Sigma Acadamey, is too nice. Check out his take on the situation.

Can I Get out of Lean Six Sigma for Religious Reasons?

At our work, we do Lean Six Sgima (LSS). LSS is a process improvement technique that is the equivalent of perpetual motion. In my organization, we do it on all kinds of things and have a practically unblemished record of utter failure. Despite the thing being an enormous money and time pit, we tell our parent organizations how successful it is.

This is a lie and lying is a sin.

Can I get out of doing LSS for religious reasons?

You Don't Need A Weatherman To See Which Way The Wind Blows

Well, now that we've got the DC riots out of the way, we can get on to the main event - fundamentally transforming America to attack racism and hate. I'll give you 10-1 odds that some time in the next 4 years, I will be expected to attend racial indoctrination training. That assumes I don't quit first or quit at the announcement of the training. I don't need this job, it's just a nice income stream that allows us to build up resources to buy a vacation home in the Confederate States of America* **.

Note to readers: The CSA line of jokes won't become a theme on this blog. I liked it for this post, but that's enough of that. Sorry if they're annoying.

In a sadistic way, I'm kind of hoping they do it sooner rather than later. The sessions will be massacres, just like the Lean Six Sigma training we did for senior employees back in the day. I'm sure Ohioan remembers those. They were glorious.

The LSS training session turned into an absolute turkey shoot of the instructors. It answered the question, "What would happen if you had Soviet-style management without the Soviet security apparatus?"

Without the threat of the NKVD coming in and shooting us, we tore the trainers apart. I will hereby admit to be one of the chief attackers. I've worked at this place a long time and my cerebral cortex is connected to my mouth with only the most rudimentary of filters in between. I can't stand stupidity and I hate lies, both of which filled this training session. The training was supposed to give us a fundamental understanding of how LSS worked. Had they stuck with that, we would have sat there, quietly and endured the day as we have so many other times when we've been subjected to this kind of nonsense. Instead, the trainers tried to sell us on the idea as well and used all kinds of examples of LSS success, none of which applied to us... 

I don't think any of us wanted to beat these guys up. One of us even asked, "Are all of these sessions this hard for you?" The instructor replied, "Each one is worse than the last." 

If that was bad, I can't even imagine what it will be like when they round us up and accuse us of being bigots.

Thinking about this possible event, depending on how much my investments have grown, I might put in my resignation papers before going to the training and then going full Nathan Bedford Forrest*** on them in the classroom. 

"Does the damned fool want to be blown up? Well, blow him up then. Give him hell, Captain Morton- as hot as you've got it, too."

* - I'm with Solzhenitsyn on this one. If I'm going to be punished for a crime, I might as well have the fun of committing it or at least pretending to commit it. What are they going to do, punish me twice?

** - In all seriousness, I've just about had it with pulling threads on the CSA, reading source documents. I think I've got the thing worked out sufficiently and have come to the conclusion that Jeff Davis' great contribution to America was to deliberately kill 700,000 people prosecuting a war that was clearly lost by the middle of 1863. Hmm. Maybe that wasn't a contribution at all.

In any case, every Confederate biography has the exact same arc. It's getting frustrating to read them.

*** - Hey, I told you I was going to have some fun with this.

The Ultimate Lean Six Sigma Success Story

As long-time readers know, I'm a huge fan of Lean Six Sigma (LSS) and other process improvement techniques. There's nothing I love more than ignoring the purpose of my work to spend endless hours focusing on how I can shave thirteen cents off the cost of purchasing a pencil. It's freakin' Paradise, man.

Yesterday I was in a meeting at work where we were discussing how one of our sister organizations could save tens of thousands of dollars by discarding their subscriptions to some electronic journals and instead accessing those same journals through our system. Had they taken the deal, they would have saved about $25,000 in the first four months and picked up access to about six times as many journals as they currently had.

Forunately, their LSS guru put a stop to it.

The dude was amazing. He forced the entire decision process to stop dead in its tracks so they could do a full-on LSS process improvement effort. Tollgates, voice of the customer, problem definitions, the full treatment. It was awesomeness squared. I sat there, playing Bejeweled on my Droid, marvelling at the way he enforced our organization's rigid orthodoxy of Continuous Process Improvement on a group that would have otherwise run off and saved money while picking up more benefits.

Lean Six Sigma. Is there anything more beautiful in the world?

Lean Six Sigma is just one success story after another.

The Strategic Planning Meeting Game

I go to many of our corporate strategic planning meetings. OK, I go to some of them. And sit in the back. And play solitaire on my PDA. But I digress.

In the process of going to these meetings, I've developed the Strategic Planning Meeting Game. It's a simple game. All you do is pretend you have no idea what your company does and in the process of the meeting, try to divine just what business you're in. Most of the time, our strategic planning meetings are so full of pointless blather about generic process improvement that I can't tell if we make running shoes, sell burritos or develop software.

That's a problem. Our process improvement tools have taken over. We no longer serve the customer, we serve the tools. Is our Balanced Scorecard getting the data it needs? Has everyone developed their metrics? Can we all work from our strategy map? How about our Lean Six Sigma (LSS) process? Do we have enough black belts and green belts? Does everyone have a LSS project?

Whoops, time's up! The meeting is over and we all leave the room. Meanwhile, serving the customer is nowhere on the agenda. All of this nonsense is forced on us from our national leadership who knows nothing at all about what we do. They've been sold a bill of goods by consultants and are forcing it on us. We're fortunate to have a decent Executive Director, but she's being forced to sacrifice her talents on the altar of process improvement. Oh well.


Our ED sacrificing her career. "Oh most wise national corporate leadership, please accept this sacrifice of our valuable time on the altar of process improvement that we might be spared budget cuts. And also that I might take this beard off, for it causeth my skin to itch and, as I am a woman, it maketh me look ridiculous."
Process improvement is a wonderful thing. It's given me a topic for loads of snarky posts.

Update: A quick search of the blogosphere revealed that Clark Aldrich, who seems to want to improve education, has been sucked into the process improvement vortex of doom. Nooooo! Save yourself, Clark!

An Unsolvable Mystery

Scientists have recently discovered that the ancient Roman Empire was able to construct an elaborate system of aqueducts and roads without the use of Microsoft PowerPoint or Lean Six Sigma. It is unknown how this was accomplished as these two tools are seen as crucial to all civilization.


It's possible that this was the creation of interstellar alien visitors that did use MS PowerPoint and LSS.