The Origins of Lean Six Sigma
The organization and practice of continuous improvement management is derived largely from the early pioneering work of the Bell Telephone System.
Years ago, the late management guru Peter Drucker wrote:
"Continuous improvement is considered a Japanese invention—the Japanese call it Kaizen. But in fact it was used almost 90 years ago, and in the United States. From the first World War until the early '80s, when it was dissolved, the Bell Telephone System applied "continuous improvement" to every one of its activities and processes, whether it was installing a telephone in a home or manufacturing switch gear...
For every one of these activities, Bell defined results, performance, quality and cost. And for every one, it set an annual improvement goal. Bell managers weren't rewarded for reaching these goals, but those who did not reach them were out of the running and rarely given a second chance."
Indeed, Bell Lab's Walter Shewhart invented statistical process control as a tool to improve processes and hold gains achieved. Further, Bell pioneered the development and use of benchmarking.
Every year they compared the performance of an operation or a division with the performance of all others, with the best becoming the standard to be met by all the following year.
What was the basis of the comparisons? They pioneered the use of measurement as a way of spreading best practices.
Knowledge gained in one part of the company was used to gain productivity improvements in another. In short, they monitored the performance of all units via measurement and, we assume, published reports on their progress.
Internal benchmarking and measurement provide diagnostic tools to improve total factor productivity. As organizations progress in their efforts to implement Lean Six Sigma, benchmarking and internal measurements of performance will play an important role.
Further, the topic of knowledge management, that is, knowledge generation, knowledge codification and knowledge transfer will begin to surface. (In future issues, we will explore the importance of knowledge management and social media technologies in extending the gains achieved.)
Lessons From the Past
A careful study of the Bell System for continuous improvement reveals an interesting philosophy. What motivated Bell Labs to make continuous improvement a way of life? Perhaps Sal Marino, the former chairman of Penton Publishing, said it best:
"Organizations that permit mediocrity get mediocrity. Organizations that permit errors get errors. Organizations that permit missed deadlines continue to miss deadlines. Organizations that permit poor management get poor management.
If an organization's management lacks the courage to eliminate mediocrity wherever it exists in the organization, it has demonstrated to its employees that they are part of an organization that accepts mediocrity and their appetite for excellence will soon disappear."