Three Simple Rules For Success
Lean Six Sigma's Place in Business Greatness
In the April, 2013 Harvard Business Review, authors Michael Raynor and Mumtaz Ahmed, investigated 25,000 companies over the last 44 years. From this analysis they discovered three types of companies—Miracle Workers, Long Runners and Average Joes—and three simple rules for greatness:
- Better before cheaper
- Revenue before cost
- There are no other rules; follow rules 1 and 2.
By better, I think the authors mean using quality to differentiate before simply reducing prices. I think they included faster into better.
- Lean will help any company differentiate it's services by being faster than the competition.
- Six Sigma will help any company differentiate it's products by 1) designing better products using Design for Six Sigma and 2) delivering flawless products using DMAIC.
Both Lean and Six Sigma will help any company deliver better products at a lower price.
The authors put revenue before cost. So the goal is to do a better job of sales and marketing, but they point out that companies also have to then pay attention to cost.
- Lean can help any company cut costs and boost profits by 20-100%.
- Six Sigma can help any company cut costs by eliminating the mistakes and errors, waste and rework that devour up to a third of total revenue.
So Lean Six Sigma can help deliver better products and services at a lower cost and better price. I've also seen it used to optimize sales and marketing. Faster response results in greater sales. I've heard from people who use DOE to optimize direct mail marketing campaigns by testing many factors at once—headlines, copy, offer, call to action and so on.
Can you really afford to ignore the Magnificent Seven Tools of Lean Six Sigma and their ability to vault your company to greatness?