Organizations around the world spend impressive amounts of time and capital in training, consultants, books and other resources for learning and deploying performance improvement initiatives such Lean & Six Sigma. However, very few of these improvement programs actually produce significant and sustainable results. Studies show that the majority of Lean & Six Sigma initiatives failed to achieve their anticipated results despite the vast number of resources nowadays available.
What causes this large failure rate? What can we learn to increase our own odds of success implementing Lean or Six Sigma?
Most of the available work addressing these questions provide superficial analysis offering lists of a number of reasons without actually understanding the root-causes for failure. In this article, I reflect on the underlying dynamics that cause well-intentioned and knowledgeable practitioners to fail when actually implementing Lean & Six Sigma.
What is the Lean & Six Sigma implementation failure rate?
Data shows that the majority of Lean & Six Sigma deployment, around 80 percent, efforts fail.
- A Bain & Company's survey in 2008 found that 80 percent of 184 companies responding claimed that "Lean Six Sigma efforts are failing to drive the anticipated value" and 74 percent said "they are not gaining the expected competitive edge because they haven't achieved their saving targets." (2)
- The 2007 IndustryWeek survey identified that "only 2 percent of companies who responded to the survey have fully achieved their objectives" and "74 percentage of the responding companies admitting that they are not making good progress with Lean" (3).
- In an article entitled "Why Lean Programs failed", Jeffrey Liker and Mike Rother, citing the IndustryWeek survey mentioned above, stated "only 2 percent of the companies that have a lean program achieved their anticipated results."(4). An assertion that does not accurate reflect the actual IndustryWeek data (see reference 3).
Regardless of the precise failure rate value, the key takeaway from these studies is that Lean & Six Sigma efforts fail significantly. If you are involved or will be in Lean or Six Sigma efforts read this post. It might help you.
It is important to recognize that when Lean & Six Sigma initiatives fail, they don't abruptly disappear. Typically, these programs gradually fade away starved by the lack of resources. In some cases, their formal extinction is the official announcement of a new performance improvement initiative. In most cases, it is a slow process in which people are relocated little by little to other activities or eliminated from the organization.
Lean & Six Sigma popularity
Lean & Six Sigma are currently the most two popular performance improvement approaches worldwide. Their relevance can be recognized by measuring the market demand for Lean & Six Sigma professionals. In 2011, it was identified by The Avery Point Group (5) that "the combined demand for Lean and Six Sigma talent has almost doubled, rising by over 90 percent versus last year's recession levels." A much faster recovery than other occupations.
The reason given to this dramatic increase is that "companies are seeking Lean and Six Sigma talent as a way to help their organizations better leverage their performance during the ongoing recovery." Moreover, IndustryWeek (2007) identified that "nearly 70% of all plants in the U.S. are currently employing Lean Manufacturing as an improvement methodology."(3) In addition, recent large investments in applying Lean in leading organizations such GE (6) shows that industry leaders recognize their relevance as performance improvement methodologies.
Lean & Six Sigma have reached other industries beyond manufacturing including service sectors such Healthcare, Banking and IT.
The reason given to this dramatic increase is that "companies are seeking Lean and Six Sigma talent as a way to help their organizations better leverage their performance during the ongoing recovery." Moreover, IndustryWeek (2007) identified that "nearly 70% of all plants in the U.S. are currently employing Lean Manufacturing as an improvement methodology."(3) In addition, recent large investments in applying Lean in leading organizations such GE (6) shows that industry leaders recognize their relevance as performance improvement methodologies.
Lean & Six Sigma have reached other industries beyond manufacturing including service sectors such Healthcare, Banking and IT.
Lean & Six Sigma abundance supply
The abundance and quality of resources available to learn and implement Lean and Six Sigma is impressive. For instance, a search in Amazon.com results in over 3,200 book titles related to Lean Six Sigma. Nowadays, top-notch organizations such the American Society for Quality (ASQ), Shingo Prize, Associations for Manufacturing Excellence (AME), Lean Enterprise Institute (LEI), Kaizen Institute (KI) among many others offer a large and comprehensive supply of training courses, videos, certifications, plant visits and professional services about Lean & Six Sigma.
With all these abundance and diverse supply of Lean & Six Sigma resources, access to quality knowledge in terms of material and experts can't be a main reason for the large number of unsuccessful Lean & Six Sigma implementations.
So far we have covered three key points:
- Lean & Six Sigma deployment failure is quite high around 80 percent. It is a real problem
- Lean & Six Sigma are the most well-know performance improvement methodologies. Leaders and large number of companies recognize their value.
- Lean & Six Sigma resources are ubiquitously available. There is not lack of learning resources about Lean & Six Sigma.
The list of common reasons for Lean & Six Sigma failure
1. Senior management's lack of commitment/understanding of Lean or Six Sigma
2. Senior management's unwilling to accept that cultural change is often required for Lean to be a success.
3. Lack of Lean/Six Sigma skilled people in the right positions. (7)
4. The company has chosen Lean as their process improvement methodology when a different process improvement program -- or none at all -- would have been the better choice.
While these are great checklists, they do not really explain the interaction that really happen within an organization that make or break a Lean, Six Sigma or any performance improvement deployment. It is like stating "we must have air in your tires for your car to run properly". However, if you understand how air pressure relates to your tires and interacts on how you run your car, you can make better decisions when your tires are under or over inflated. In the same way, "senior management's lack of commitment" is an obvious reason for most performance initiatives to fail. However, the question here is "why would senior management not commit to continuous improvement initiatives?" If anything, I ask you to look into the interactions that affect your organization and the success of its performance improvement initiatives.
In my next post "Beyond the check lists for Lean Six Sigma failure or success", I would discuss the most common dynamics that really make or break a performance improvement initiative. Until then, the force be with you.
Important note: The ideas above are built on my own experience and the experience and studies of outstanding practitioners such Jim Womack, Mike Rother, Nelson Repenning, Jeffrey Pfeffer, Robert Sutton and many others from MIT and Stanford.
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