Why So Many Lean Manufacturing, Six Sigma, And Other Improvement Projects Fail

If you have been around a few years you will almost certainly have seen at least a few fads come and go about how you can improve your business.

•    SPC (Statistical Process Control)
•    TQM (Total Quality Management)
•    TPM (Total Productive Maintenance)
•    Self Directed Teams
•    Executive Coaching
•    LEAN Manufacturing
•    Six Sigma
•    Theory Of Constraints
•    Just about any form of training course
•    Almost Any Consultants Report!

The list goes on and on!

Nothing is wrong with any of these approaches; in fact there is a lot that is right with all of them.

For an improvement project to be successful we want at least the following criteria to be met:

•    High Return on Investment (ROI)
•    Fast Implementation
•    Ownership & engagement by all levels of the organisation
•    Sustainable High Performance years after the project commencement

How many improvement projects and consulting efforts can say they have met the criteria above?

So why do so many of these initiatives fail to meet the criteria for success when the base technology or principles are totally valid and valuable?

Here are the 7 most common reasons I have seen project fail in the last two decades of experience in industry. I will go into more detail in each one in future blog posts as well as explaining how to avoid these pitfalls that will cost your business money, and waste everyone’s time and patience!

7 Deadly Sins That Will Cripple Your Improvement Programs Chances Of Success

1. Academy Award Syndrome

Launched with great fanfare and expensive posters the project makes a big splash and then sinks to the bottom to rest alongside the Titanic……and last year’s big improvement initiative.

2. Magic Wand Disease

Various people within the organisation are anointed ( by the magic wand), to be champions, owners, leaders, mentors, or some other title that they do not understand, and are not trained, or authorised to do.

3. Darwin’s Theory of Evolution Problem

According to Charles Darwin living things evolved slowly over millions and millions of years. A program that must support large investments in time and money with no payback for years will go the way of the dinosaurs, rather than the Galapagos turtle!

4. Assassination By Budget

Headcount and budget commitments must be met and anything that is not essential, (moderately performing improvement projects being the first to go) is chopped by managers so they can retain what they regard as an essential core.

5. The Path of Least Kicking

Departmental Managers and supervisors will always respond to who screams loudest, and who can kick the hardest. At monthly reviews the pressure will be applied to make more, spend less, and cut anything to have a better month next month! Improvement projects will be quietly ignored.

6. Spectators Syndrome

The project was initiated by the CEO, HR, Head Office, etc, etc and there is no understanding or buy in by the people who have to do the work. These people will sit back, fold their arms, and wait, then watch for someone else to do the work. The champion gets tired, gives up, and blames others for not being a team player!

7. One Man Band Complex

The Project becomes an extra ‘Thing to Do’ for people who already fell they are overworked, and overloaded. With only so many hours in the day, and no extra time being provided the project becomes one more task on a long list of things that will never get done amongst the daily essentials of satisfying customers and managing crises.

I have tried to be somewhat light hearted about this, however these shortcomings in the way projects have been run have cost millions of dollars in expense, and more seriously probably tens of millions of dollars in lost opportunity.

Over the next few weeks I will go into more detail on each of these shortcomings, and more importantly how to avoid them! Let me know by email or comment below if there is any sin in particular you would like to hear about first.

Comments are welcome and encouraged.

Have An Awesome Day!

Jason

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5 Responses to “Why So Many Lean Manufacturing, Six Sigma, And Other Improvement Projects Fail”

  1. Steven Balderstone says:

    Jason, very insightful – as usual.

    Points 6&7 in particular resonate with my experiences.

    There is also an element of cultural congruence needed with whatever methodology is applied. ie. the approach has to fit the organisation and its culture. An off-the-shelf methodology often won’t have that cultural congruence. ie.Years ago a certain large finance organisation threw itself into Six Sigma and spawned over one hundred small projects. One year later only seven of those projects were completed, let alone successful. The bulk of projects died a slow death. Why? The methodology was technically valid but actually unworkable within that environment and culture.
    Regards
    Steven

  2. Jason says:

    Hi Steven,
    sadly the story you tell is not unusual. The moony that business has spent (fees, management time, etc) and the lack of return it has generated must be a horrible financial disaster.

    Thanks for Commenting

    Jason

  3. Good points made by Steven, as well as a fairly typical scenario.

    Apart from the perspective that Six Sigma is probably one of the least appropriate approaches to use in financial services, most improvement methodologies do not have a diagnostic phase where you first screen what actually needs to be done, and then prioritise all identified opportunities.

    Without this step, companies tend to try to ‘boil the ocean’ by trying to address every problem under the sun resulting (like the example mentioned by Steven) in a hundred or so project without any specific focus.

    If they took the time to make haste slowly and apply the 80/20 rule, they would start by running a small number of high priority and high impact projects and get quicker results with a lot less effort.

  4. Jonathan says:

    Yeah, great points and quite common issues. One of the other issues I have seen is mismatched KPIs/expectations between overall company goals and that of individual departments/managers/line etc.

    For example, a line manager might be measured for labour utilization (which makes that line produce more than required to show great labour absorption) while that contributes to excess inventory in another area!. Similar with standard costs, when a product is judged on standard cost which drives large EOQs (Economically Optimal Quantity), which then leaves a massive excess at the end of the Qtr/Year/product life cycle, which doesn’t get measured until that/end stage!.

    Cheers,
    Jonathan

  5. Anonymous says:

    Jonathan, the mismatched KPI problem is really real and is what happens when the organisation is not aligned around how to measure success.

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