Are we losing interest in the Theory of Variation?

Two very big organisations that I’m close to have made big changes in their approach to business improvement recently. Neither have said this in so many words, but their body language is proclaiming very loudly “Six Sigma is dead – long live lean”.

And is it my imagination, or has “Six Sigma” dropped out of common business language, whereas “Lean” is booming in management speak currently?

In the two organisations I refer to, Six Sigma is regarded as far too slow in achieving business change, and people spend far too long in the classroom away from the business. Lean is presented in a fast paced and exciting style over half the time, with focus absolutely on waste reduction.

One of the victims of this change is that managers are no longer taught about statistical variation and the use of Shewhart Control Charts. And, in my experience, this simply extends a condition that is widespread in UK management circles – that nobody knows about what to do with system or process performance data. People say they’ve never heard about Variation, or they’ve heard about it in college and never used it.

The typical management world is inhabited by Key Performance Indicators (KPIs), Service Level Agreements (SLAs), Targets to achieve (judged on a weekly or monthly basis), and Red Amber Green (RAG) status tables to highlight the miscreants. Unbeknown to people attempting to manage like this, they are almost certainly making things worse and adding waste, together with fear and stress to their staff.

People aren’t taught that the fact that this month is better than last month, or worse than the same month last year, might simply be down to the effects of Natural Variation in the system under study. In fact, the ups and downs of performance can only be understood by careful use of control charts (more usefully known as process behaviour charts) which determine statistically the capability of your system to deliver. They broadcast the message loud and clear that, almost always, it is only rational action on the system that brings about improvement.

This is a big breakthrough in changing management style. Instead of setting people against one another, trying to pass blame or take action to distort the system to give the illusion of achieving targets – understanding variation unites people in working together to improve process capability, engages their innate interest in their work, and liberates them from the shackles of the RAG.

I’m all for reducing waste in organisations – but I think by not teaching the Theory of Variation we are perpetuating the biggest waste of all, the prevailing style of management.