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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 VLM on Monday July 02 2018, @02:31PM
If a company strikes it rich because their mascot is a sock puppet, and if 99% of managers are followers, as they are, then you can expect 100 copy cats declaring the logical and rational path to success is having a sock puppet at a mascot, tons of industry press about the booming relevance of sock puppets in todays business climate, etc.
Its really not that complex or rational or logical, just monkey see monkey do. Just like having a shitty open office floorplan that doesn't work in practice, but we have to do it because other people are doing it. Or take your dog to work, or any number of other stupid ideas.
All that happened is "greater large economic forces" massively pushed financialization scams as a temporarily profitable business model, and somehow, God only knows how, some previously boring legacy heavy industry company rode the peak of the scam wave a generation or two ago so they were successful as long as financialization scams were successful. Therefore their mascot being a sock puppet, or some bizarre corporate propaganda about quality documentation, or whatever other statistical randomness a company can have, is proudly held up as signal, not the noise it is.
Another side dish is talking about WHY they were actually successful might be a very negative "bad think" "double plus ungood" topic, so we'll talk about their only reason for success being open office plan or a really cute sock puppet as a mascot, so as to not offend a very wealthy advertising purchaser. "You all were successful because you pivoted into financial scamming and out of real work, while keeping just barely more legal than the companies that blew it" is not going to win as many fans and love as "you have the most beautiful paperwork ever".
The irrational copy cat act could just as easily have been "all companies need walnut boardroom tables" or "all companies need a division that manufactures steam turbines". Follower behavior does not have to make sense, to be followed.