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from the trademarked-thing-losing-its-luster dept.
Dave Lindorff reports via CounterPunch
Over a generation ago, engineer Bill Smith, working at Motorola, developed a management system called Six-Sigma, designed to help companies avoid quality problems in their products and business processes. His system caught morphed[sic] into a general theory of management, and became a catch-word and marketing goldmine at business schools as well as requirement for promotion at large corporations.
In 1995, Jack Welsh, CEO of GE, made Six-Sigma central to his company's whole management approach. If you wanted to be promoted at that leading Fortune 100 industrial firm, you needed to be certified in Six-Sigma. Other companies followed suit and today most large US corporations and many abroad, as well as some public organizations (including the US military), claim to adhere to the model, and to promote management personnel based upon their having achieved so-called "black belt" or "green belt" status in understanding its precepts.
Indeed, GE's success in growing rapidly and achieving record profits year after year made Welsh and Six-Sigma (a trademarked term owned by Motorola) a leading model for top-level managers everywhere.
Jump forward, though, and GE is now being called an epic management disaster by analysts. The company, with Welsh at the helm, famously expanded into banking and financial services, got caught with its corporate pants down in the Fiscal Crisis and Great Recession that hit in 2007, and is now going through a wrenching divestment and break-up process that has seen its stock price fall from a high of $87 a share in August of 2000, when everything seemed to be humming along nicely, to today's low of $12.88, a level that valued the company at 50% of what it had been worth just a year ago.
Last week, in a final indignity, the company, which had been one of the original Dow Industrial Average listings when that index was created back in 1896, was kicked off that widely followed list of Wall Street's largest and most important firms, embarrassingly replaced by the pharmacy chain Walgreens.
[...] Welsh noted that his performance as a manager would be judged not by what happened to the company under his watch, but by how it did in the decades after his departure.
The answer is now in: disastrously.
The same actually can be said about many of the US companies that adopted Welsh's vaunted Six-Sigma model for strategic management.
The question then, is why nobody in business journalism is questioning Six-Sigma.
[...] the company has become an object lesson in why both Six-Sigma and GE's approach to growth by acquisition and diversification should be viewed with great suspicion.
And yet, instead there is just silence.
[...] US politicians of both major parties, and especially Republicans, are quick to say that government agencies should be run more "like a business". The Trump administration has taken that even further, putting actual businesspeople in charge of many of the government's key departments and agencies. Are these department secretaries and agency heads going to be applying the discredited GE Six-Sigma model to the government operations they direct?
[...] It sure would be great if the Department of Defense, the National Security Agency, the CIA, the DEA, the FBI, the Department of Homeland Security, the Bureau of Land [Management], and the Commerce Department, at least, could get the GE treatment.
(Score: 5, Interesting) by Dr Spin on Monday July 02 2018, @08:59AM (7 children)
I am not too familiar with 6-sigma, but I have been involved in three ISO-9000 implementations. It really just
I can't see how that could get you into much trouble. The trouble is caused by:
Separately the US and UK economies, and probably a lot of others, are reverting to slavery - where people at the bottom are paid so little they have zero "disposable income" as survival disposes of their entire income, while those at the top cruise around in private jets and yachts.
In the UK, this is worsened by a social security scheme that means the rich are subsidized by payments which they get from those on medium income via rent collections for over-priced houses for the poor. This gives the rich the money while blaming the poor for the taxes.
The solution has been suggested by several people:
If any single one of a company's employees is eligible for benefits, it should be illegal to payout dividends to shareholders, under the anti-slavery laws, as well as the rules if "illegal trading" which apply to drawing money from a company that is not profitable and driving it into bankruptcy (this may not be illegal in America, I don't know).
This should not require a change in the law, just for a few judges to clarify existing law.
It is worth pointing out that companies exist through a contract with the community at large and the community is in a position to dictate the terms under which companies can be incorporated. These should include a statement that the company is required to, as its highest priority, behave as a decent and honorable citizen. If it fails to do so, the CXOs are, by definition, responsible, and should be jointly and severally responsible for the consequences of each and every such failing, mroally and legally, including up to the death penalty where applicable.
Warning: Opening your mouth may invalidate your brain!
(Score: 3, Insightful) by c0lo on Monday July 02 2018, @09:49AM (5 children)
Even if only with ISO9001**, there's still a chance to introduce inefficiency. E.g.
-"Say how you are going to demonstrate it was done" - any process measuring implies overhead. Any mediocre manager worth his salt wants purchasers and plots and... which means in time there's a good chance that more and more effort will be diverted from "do it" in "demonstrate you've done it"
- "Say what you are going to do" - and, after a while, you'll start to hear "If it ain't broke, don't fix it"
--
** ISO9001 does not as far as CMM, 6-sigma, Deming wheel and other 'recipes' for process improvement.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 0) by Anonymous Coward on Monday July 02 2018, @01:54PM (1 child)
ISO900x is a tool not a magic wand. You can do the wrong thing consistently and still pass it. And you can overdocument stuff, create too many procedures and still pass it.
The wisdom is knowing how much you need. And for most organizations it's definitely not zero.
(Score: 2) by c0lo on Tuesday July 03 2018, @12:21AM
I'm far from saying ISO9001 is not good because it is not perfect.
I'm saying there are too little number of managers to use it correctly, because the temptation of using it in form only (as opposed to in substance) is sooo great.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by Dr Spin on Monday July 02 2018, @02:17PM (2 children)
As the customer of an ISO 9000 company, you can ask for the docs and read what is checked and how, and what was found.
You may not care, but if you do, you can ask, and then consider whether the measurement looks credible or not.
Without ISO9000, all you get is a salesman saying "It is just what you need, just what you want, looks good, and is real cheap - trust me - I'm a salesman".
I know which I would prefer if I was in big business.
Warning: Opening your mouth may invalidate your brain!
(Score: 4, Insightful) by VLM on Monday July 02 2018, @02:48PM (1 child)
Actually no, because ISO9000 implies a lot of pencil whipping.
I have some professional pride so in a non-ISO9000 workplace my name on a datasheet, for example, implies that to the best of my ability the datasheet is true and reflects reality.
At a ISO9000 workplace, where I've thankfully never had to work, some PHB will document that all data sheets will assert, say, automotive temp range suitability will be documented on all datasheets, therefore all datasheets for non-automotive temperature range parts will be falsified. Thats a kind of contrived example, but "we've found something that doesn't work, but we can't get the paperwork corrected so we'll keep doing it wrong" is fairly standard at ISO9000 facilities.
In the military we had a complicated process of generating documents proving that vehicles we were not using, were suitable for service, by a definition of service we also didn't use in our jobs, during a weekly PMCS (preventative maintenance something something) inspection. All it did was waste time producing a lot of paperwork having little reflection upon reality. We'd have been better off spending the pencil whipping time doing something productive. The mechanics were pretty good at making sure the vehicles we actually used, would work under real use conditions, because we didn't waste their time on the process designed to achieve that, which achieved nothing useful in practice.
(Score: 3, Interesting) by Dr Spin on Tuesday July 03 2018, @07:26AM
My original post did mention PHBs and MBAs. Unfortunately, I failed to mention Nepotism and unqualified morons in high places.
I once worked in a place where there was a rich kid wanted to be an engineering manager, so he (or his dad) bought 1/4 of the
company, and he was appointed engineering manager.
My job was to implement a command line user interface such that the commands had mnemonics that matched the random
ones the graphics designer used to illustrate the touch panel buttons, as the panel had gone into full production without
the software being written!
In another project at the same company, the managing director's wife coded 8048's to act as UARTS (cos the UARTS cost more
than mask programmed processors here in the UK). A huge quantity was ordered before they discovered she had sent the bits
in reverse order! These were quickly re-described as using a "proprietary encryption algorithm". She wrote very good assembler,
but in both cases, the underlying problem was that not only was there was no actual spec, management had no actual
understanding of what a spec was!
Both products worked well - the software I wrote was still in use 10 years later. The company was bought out by a well
known American competitor whose products had cute, cuddly names, but did not actually work. They needed something
that did.
Horse sense is mainly the province of horses - not many horses reach management pay grades.
and
No amount of paperwork can save you from idiots.
Warning: Opening your mouth may invalidate your brain!
(Score: 1) by khallow on Monday July 02 2018, @06:47PM
If the communities aren't retarded, those terms will be reasonable. Otherwise, you'll only get the grotesquely unethical with an angle.