Monday, December 16, 2013

6-sigma vs Economic Growth

Q. is 6-sigma good for economic growth or bad? In case you aren't aware, 6-sigma refers to a quality control measure. If you buy a jet engine from General Electric (GE) you'll be comforted to know there is a very high probability the engine conforms exactly to their design intention. Many companies jumped on the 6-sigma bandwagon so they wouldn't be left behind, and so they would qualify as vendor to a 6-sigma firm, in what was another management 'fad'. These fads have shown up as upward bumps of a few percentage points on stock markets, showing they are generally good for business.
At least in the short run, and for certain types of products and production methods. The problem I see is one of bureaucracy. To get the high conformance, workers must do their production exactly as specified. That means more things need to be specified. The equivalent of 'thick binders' of exacting specifications get written. To understand the binders, new workers must go through training sessions, likely with multimedia course ware, and testing at each stage. So by the time a production process has been 6-sigma-ized a bureaucracy has gelled around a very specific process.
And that's bad for innovation in the long run. If a worker comes forward with a suggestion for incrementally improving a process, they are more likely turned down or put on a future list. That's because it's costly to rework the training materials, retrain all the workers, besides the normal changes to production process and testing methods. So in the long run, 6-sigma would tend to slow incremental innovation, and slow economic growth.
But 6-sigma might help the speed of innovation in this way:: if you want to invent some new use for jet engines, it's nice to get an engine that won't have problems, so you can focus on your new innovation.The firms at the end of 6-sigma supply chains don't have to be 6-sigma. They can innovate rapidly in their own domain. But if they need a part design changed, and it's a few steps back up the 6-sigma supply chain, it's going to cost them.
On the other hand, some types of products are easier to quality control. Software enjoys automated testing. A developer can experiment offline with a new algorithm, put it into a copy of the production software. Then pass it to a testing guru to develop automated tests. After they go back and forth with quality touch-ups, the new code can be merged semi-automatically, including the tests, into the final production version. After that, it's easy to do a straight copy of something digital, with no workers fouling up the production process.
To the extent some of that software-like process can be adopted in physical product production processes, the easier it will be to do incremental innovations.
But even in software, it's common to do 'releases' - that is, although the product and process is changing with incremental innovations, that's in the back room, and the end users keep getting the old version until the new one is released. Firms can do the following: always have 2 or 3 assembly lines. One is your current production, one is for your next release in so called beta, and one is for new ideas just getting started. When ready for a release, you change over to the new assembly line. That allows firms to capture and try out incremental innovations. Then they can have it both ways: 6-sigma and incremental innovation.


Tuesday, April 9, 2013

Q. Should 'Innovation' be taught in schools?

I've been researching the topic of innovation: what it is, how to do it, and its benefits. What I found:

Benefits of Innovation:
Generally innovation is good. Economists think it helps improve productivity -how much on average each person can produce, in dollars. Canada's productivity lags that of USA by 20%, so presumably we have some room to grow on the dimension of innovation.

What is Innovation?
I've seen a few definitions. Here's one: when you solve a problem -or identify a new opportunity- in some new way or a way that adapts it to your unique situation, that's innovation.

Is innovation being taught in schools?
When I searched online for K12 and Innovation I found an experimental project in Germany, and a proposal for a project in India (not implemented due to crowded curriculum). I suspect if it is being taught in Canada, then it's likely not under the title 'innovation.'

Can innovation be taught?
Over decades I've been a collector of books on innovation. I recently re-read my collection -a few dozen books- and found a few more titles at the library, and reports online. What I found was a somewhat incoherent mishmash of ideas, none of them nailing the topic concisely. Then when searching online this year I found a recent book "Creative Strategy, a Guide to Innovation", by William Duggan, 2012. He has a 3 step approach he distilled from his previous book "Strategic Intuition", and from a 1990s General Electric management technique. The 3 steps are easy enough to understand and apply.

3 Steps to Innovation
1. break the problem into bite-sized pieces called elements
2. look in/research various sources for proven solutions -called precedents- for each problem element
3. creatively recombine precedents into a whole solution

When I compared it to my own experiences -including my breakthroughs during 10 years of new product research and development- it matched. Or more precisely it seems to be a written version of what I do -what we all probably already do when we wrack our  brains and get those 'Aha!' moments. The benefit of making it an explicit written process:
- groups can coordinate their efforts
- individuals can work systematically on a problem

Q1. Could innovation be taught in RVS K12 schools?
Q2. Shoud innovation be taught in RVS K12 schools?