Process Management and the Future of Six Sigma

This is an MIT Sloan Management Review article. The quality initiative Six Sigma is sweeping the United States. Is it good for whatever ails your company? Consultant Michael Hammer thinks not. He warns that in their quest for operations performance improvement, many business leaders fail to distinguish its strengths from its weaknesses. Hammer presents a strategic, holistic approach--business process management--in which Six Sigma is only one of many useful initiatives. If a business process, such as billing customers, is fundamentally defective, why use Six Sigma to improve the performance of it? Companies that Hammer calls process enterprises (Caterpillar, Johnson & Johnson, Merck, Progressive Casualty Insurance, Bombardier, and IBM) have found more success redesigning whole processes. Certainly, Six Sigma's ability to unearth root causes of problems is outstanding for narrow cost-saving improvements. But it deploys statistical analytic tools to uncover flaws in the execution of an existing process without asking whether the process itself is flawed. Six Sigma assumes that the existing design is fundamentally sound--a dangerous assumption. For peak performance, companies should position Six Sigma in the context of process management and assign process owners. Process owners ensure that all performance initiatives (Six Sigma, enterprise resource planning, balanced scorecard, customer relationship management and so on) are integrated to support strategic goals. Fitting Six Sigma into the process-management framework allows organizations to enjoy Six Sigma's benefits while keeping it away from areas where it doesn't belong. Process enterprises already are reaping cost savings, accelerated new-product introduction, improvements in customer satisfaction, and increases in profitability.

• Operations strategy
• Operations research
• Process analysis
• Improving employee performance