SIX STIGMA?
Does Six Sigma really work?
By Laura DeMars

When robert Nardelli was ousted as CEO of US-Based Home Depot,
one unusual side effect was the attention paid to his advocacy of the Six Sigma process-improvement methodology. Consultancies, particularly those with competing approaches, were quick to offer research intended to show that Six Sigma has been oversold. QualPro Inc., which markets a competing “multivariable testing” system, looked at almost five dozen US companies that have adopted Six Sigma and found that the vast majority have underperformed the stock market. A recent study of finance shared-services organizations by The Hackett Group found that while fully 86% of them use Six Sigma or similar continuous-improvement methodologies, they generally achieve only incremental gains. To achieve what Hackett calls “world-class” performance, companies can’t rely on Six Sigma alone; they must regard it as a specialized tool suitable to certain needs but far from a cure-all.

Scot Webster, vice president of global business solutions at Medtronic Inc., which deployed a combination of Six Sigma and Lean Manufacturing more than three years ago, agrees. “Six Sigma doesn’t address everything,” he says. “You have to use it in combination with other tools.” But Medtronic did use its “Lean Sigma” methodology to reduce its payment-processing time by more than 50%.

Thomas Davenport, a professor of management and information technology at Babson College, suggests that in the current business climate, which is focused on growth and innovation, Six Sigma’s emphasis on cost-cutting and efficiency might prove a harder sell. “Six Sigma is following the course of other methods, like Total Quality Management: after a while you start seeing cracks in its armor,” he says. “Then something new comes along and companies rush to get it.”