Freakonomics - Become a Six Sigma Detective Superhero

The November 2005 issue of Fast Company called 2005 the Year of the Economist. Why? Because books like Freakonomics: A Rogue Economist Explores the Hidden Side of Everything by Steven Levitt and Stephen Dubner became a best seller. Financial columnist, Tim Harford says: "the idea of the economist as a detective hero suddenly became easy to sell once Freakonomics climbed the best seller lists."

Suzanne Gluck, the author's agent, says that people are using freakonomics as a code word for unconventional wisdom. What's the secret, Fast Company asks?

"It's just math," replies co-author Dubner.

Lean Six Sigma Freakonomics
Isn't that the essence of Lean Six Sigma? Using numbers to explore the hidden side of defects, delays and costs in ways that reveal the hidden goldmine of profits wasted every day in businesses large and small?

What's the "secret sauce" that makes Steven Levitt so successful? Co-author, Dubner says: "He seemed to look at things not so much as an academic but as a very smart and curious explorer--a documentary filmmaker, perhaps or a forensic investigator or a bookie whose markets ranged from sports to crime to pop culture."

He is an intuitionist. He sifts through a pile of data to find a story that no one else has found.

The New York Times Magazine said he's "a kind of intellectual detective trying to figure things out."

Isn't that what Lean Six Sigma is at its core: sifting through piles of data like an intellectual detective trying to explain the hidden side of defects, delay and cost?

Fundamental Ideas
The book focuses on a few key ideas:

  1. Incentives are the cornerstone of modern life. (In Lean Six Sigma people are rewarded for following systems that cause defects, delay and cost.)
  2. The conventional wisdom is often wrong. (If conventional wisdom was correct, then most problems would have already been solved.)
  3. Dramatic effects often have distant, even subtle, causes. (Six Sigma looks for direct cause-effects, but systemic effects can amplify subtle causes into dramatic ones.)
  4. Experts use their informational advantages to serve their own agendas. (Hence the numbers can be bent to prove whatever I want to prove.)
  5. Knowing what to measure and how to measure it makes a complicated world much less so. If you learn how to look at data in the right way, you can explain riddles that otherwise might have seemed impossible.

Here's my point: 
Become a detective or treasure hunter superhero. Learn how and what to measure to simplify understanding your business. Let your measurements lead you to find and plug the leaks in your cash flow. Distrust conventional wisdom. Look for subtle causes that amplify themselves into disturbing effect. Share what you learn.

Most of all: Get on with it! There's no end to the mysteries to be revealed and problems to be solved.

Rights to reprint this article in company periodicals is freely given with the inclusion of the following tag line: "© 2008 Jay Arthur, the KnowWare® Man, (888) 468-1537,"

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