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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: 2) by All Your Lawn Are Belong To Us on Monday July 02 2018, @02:55PM (1 child)
When you get to be the size of a GE, or a Motorola, or Verizon, etc. one of the biggest challenges is keeping the ship going forward in the "right" direction. ("Right" is complex and requires unpacking, but I won't digress.) Inconsistent management methodology is such an organization can be as damaging (if not more so) than lack of technical knowledge. A program like Six Sigma, Agile, Waterfall (management methodologies, all) when applied company-wide establish a framework that can apply across a company and give consistency to operational methods. But that requires buy-in not just on a "yep, we did the scrum" task level, but also a motivational/principle level. It is really tempting to forgo the management bullshit bingo and think "hey, just get good people who can manage their teams however they want...." But in the end those models do keep enterprise organizations operating with a degree of consistency that can't otherwise be achieved for longer periods than otherwise. (If it made more money and bonuses to let everyone do their own thing.... that's what you would see.)
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(Score: 4, Insightful) by HiThere on Monday July 02 2018, @06:04PM
You've got one part of the problem, but consider:
Some tasks may be better managed by one management model, and other tasks by a different one.
I'm not sure that a unified management model is always a good idea. In fact, I think it may often be a terrible idea. But to judge each case, you need to understand each case.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.