Do Six Sigma, TQM stifle innovation?

02 February 2006

Too much process management across all levels of an organisation makes for easier implementation, but it can strangle bold, breakthrough innovations.

As more businesses and organisations adopt process management programs such as Six Sigma and Total Quality Management, a warning has come that the overzealous application of these programmes can stifle creativity, reducing innovation and the exploration for new services and markets for the future.

USA's Wharton School (University of Pennsylvania) Management professor, Mary Brenner, advises organisations to reassess the use of process management programmes and to apply them with more discrimination. The warning was carried in a recently published paper under Wharton's innovation and entrepreneurship category, titled TQM, ISO 9000, Six Sigma: Do Process Management Programmes Discourage Innovation?

Urging firms to understand the limitations of process management programmes, professor Brenner said, "Our message is this: companies that have process management in one area must realise that it can bleed into other areas of the company, and you must prevent that from happening. Use these approaches where they make sense — and deliberately do not have them in areas that are focused on innovation."

TQM is a strategy that focuses the entire organisation on continuous improvement. It arose in the 1980's in response to the Japanese competition with the US, and the writings of W Edwards Deming. Six Sigma started in the US at Motorola and became prominent in the mid 1990's due to its adoption by General Electric. The goal of Six Sigma is to improve a company's quality to only three defects per million, through incremental change in processes and statistical measurement of outcomes.

Birlasoft, one of India's leading commercial houses, with equity participation by GE Capital, uses Six Sigma technique in its governance framework to increase efficiency, reduce costs and improve customer satisfaction. Monthly defects have decreased from 11 per cent to 3 per cent.