Actually, the following rant applies to using Six Sigma or Lean in any variable (non-production) environment, but “variable environment” is hardly a household term, whereas “front office” readily connotes the “marketing, sales and service” subset of variable settings. Anyway, I’ve recently had several more brushes with organizations and consultants perpetrating this sham, so I thought I’d spout off a bit and stir up some trouble.

Truth be told, I believe that Lean is a powerful tool when used as originally intended, in manufacturing. I’m less impressed with six sigma, but so are lots of other folks after trying it, as it seems to be headed for remission. But you can still rationalize applying it in manufacturing.

So what’s my gripe? Let me express it this way. All process approaches contain a small, basic set of generic process tools. Beyond that, each approach adds lots more very specific tools that distinguishes it from other approaches. And as it happens, both six sigma and Lean-specific tools are thoroughly inappropriate for use very far outside of manufacturing.

Take six sigma – the most inappropriate approach for the front office. Applying six sigma, as designed, requires several operating conditions to be successful: high repetition work activities; a need for minimizing variation; and the primary source of defects found at the individual work station level. Unfortunately none of these conditions routinely exist in the front office. The bulk of front office work is low repetition with a significant decision-based component (making variability a plus rather than a sin) and with the vast majority defects found in how work moves from work station to work station, department to department or among internal and external participants. Hardly a good match.

As for Lean, it’s designed to drill down on and fix specific activities so they’ll contribute more value while costing less – and it also tries to eliminate as much inventory and in-process materials as possible. Great, except that most front office functions are so interrelated with other functions and stakeholders that fixing one defect without thoroughly understand the upstream and downstream effects is hazardous. And as for reducing inventory and flexibility to create more inventory in a hurry, that’s hardly customer-friendly, which is what the front office is all about (or should be). In fact, stock-outs readily produce customer “walk outs.”

So how do six sigma and Lean practitioners get away with operating in the front office? Very circumspectly. They just empty out their toolbox of approach-specific tools and fall back on generic process tools. But you’d better believe they keep right on using all the approach specific terms and basking in the buzz created by adopting such a recognized approach to finally bring discipline and order to the front office. Plus, they proudly tout they’re offering the real deal because they’re “measuring.” What a crock. Those of us who developed the third-party lead management industry back in the late 70s and early 80s we’re measuring as much as these “faux folks” claim to.

These folks are like dentists doing heart surgery.

What makes matters worse, all the artifice aside, is that both six sigma and Lean violate one of the most important principles of front office process improvement in today’s day and age: keep it democratic.

Among the principle differences distinguishing front office environments from manufacturing settings is level of employee empowerment. In manufacturing, employees largely do what they’re told. But front office employees can kill just about any change initiative they’re not fond of – and not part of. Six sigma and Lean both create elite, specially-trained teams that, basically, determine how others will work. Fine in manufacturing. Okay, perhaps less than fine. But when these process police squads march into the front office, they’re greeted by lots of “four finger salutes.” Bottom line, you can’t effectively change front office process without highly democratic involvement of lots of non-process trained employees.

So, considering all the downsides of six sigma and Lean in the front office, why do we keep trying it – or faking it? Three reasons.

First, a former colleague and leading faux six sigma practitioner explained it very clearly when I asked him that, and in so doing put the “former” in “former colleague.” When I asked the question, he answered that he knew he wasn’t really practicing six sigma, but he needed “the buzz” (his term) to differentiate his practice. ‘Nuff said.

Second, renowned psychologist Abraham Maslow said it as well as it can be said. “If the only tool you have is a hammer, then all the world tends to look like a nail.”

And third, more than a few process practitioners believe that business process – all business process – rests on one set of immutable principles. Hey, you can believe that about love, war, sex, the exchange economy – but business process? Give me a break.

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I have a deep and abiding respect for Balanced Scorecard (BSC). In 1990, BSC architects Robert Kaplan and David Norton designed this innovative approach to performance measurement to compensate for financials �?ber alles corporate measurement practices. Their invention provided a valuable and unique tool to assist those fathoming that short-term financial success achieved at the cost of damaging long-term customer relationships damages the business.

But such forward thinkers were even more in the minority then today. Businesses not attuned to the importance of non-financial measures �?’ but attracted to BSC�?Ts impressive tool set - took to co-opting BSC and twisting it into a financial management tool. Developers of a prominent business process software system often used to support BSC once estimated that perhaps 70% of implementers perverted BSC�?Ts purpose in this manner. A lot like perverting CRM by converting it into software. And similar to software-driven CRM implementations, the P&L-based BSC implementation failures quickly piled up.

But you can hardly attribute these failures to BSC. Moreover, some 30% of implementers, the smart ones, got it right - and many derived very substantial benefits by applying BSC as intended.

So where�?Ts the problem? If most of these mishaps weren�?Tt BSC�?Ts fault, why am I picking on BSC by intimating it�?Ts out of date �?’ especially when we incorporate many BSC tools into our own Visual Workflow approach to process design?

If you�?Tll think back to business-as-it-was in 1990, the time when many of us were migrating from DOS to Windows, you�?Tll probably catch my drift. Over the last 17 years, a long series of disruptive environmental changes has turned the business world virtually 180�� upside down. Which has turned most management theories circa 1990 irrelevant. Hence, unquestioningly accepting en toto any methodology laid down 17 years is risky behavior.

Prominent among these disruptive changes is the traditional balance of power between sellers and buyers shifting from �??advantage-sellers�?? to �??advantage-buyers.�?? Today�?Ts customers don�?Tt want companies �??balancing�?? customer interests against internal interests. They expect companies to �??unbalance�?? their goals to provide more customer value �?’ regardless of who or what has to give up value as a result. And not to stray off-topic, but customers themselves are often giving up the additional value they receive as consumers by having to live with lower wages and benefits �?’ or even without jobs.

But does this reversal of the traditional seller-buyer balance of power render BSC obsolete? Not hardly. Especially when we�?Tve become quite adept at redefining concepts like �??balance�?? to compensate for changing realities. But the transition from seller-centric to buyer-centric business does change how we go about setting BSC metrics. And this transition sure does distort all those nice, four-quadrant graphics showing financial, customer, process and organizational outcomes all very neatly receiving equal weight.

Another disruptive change affecting BSC is the exponential leap in availability of application software that�?Ts occurred since 1990. Back then, we referred to functional silos, now looked upon derisively, as �??centers of excellence.�?? Without more than scant availability of application software outside of (guess where) finance, functions couldn�?Tt �??talk�?? to each other. So they didn�?Tt. But today, not only is application software nearly ubiquitous, but we also benefit from the wonders of EAI (enterprise data integration) and even more so the data sharing and exchange powers of the web. These advancements not only encourage �?’ but even force functions to communicate and collaborate. And start dismantling their silo walls.

How do these changes in our technology backdrop affect BSC? When we look at BSC�?Ts four quadrants, technology is nowhere to be found. Where is it? Lumped together with process. Now, as frequent CustomerThink readers well know, I�?Tve long been on my soapbox insisting that process and technology must be coupled once outside manufacturing and production environments. However, just joining process and technology �?’ and saying that alone adequately accounts for technology�?Ts potential contributions �?’ sells technology short. It fails to take into account how radically technology can raise our business horizons and create new ones.

BSC does give technology short shrift �?’ forcing us to step outside BSC to establish measures of how well we�?Tre leveraging what�?Ts now available to us (and available to competitors, as well). But a fatal flaw for BSC? Inconvenient, yes. Fatal, no. We can reshape BSC into �??five quadrants�?? to more effectively plan and measure technology utilization. And technology-aware aware BSC consultants have overcome this hurdle.

But a third disruptive change �?’ the migration from �??functional�?? to �??cross-functional�?? work �?’ more fundamentally detracts from BSC�?Ts effectiveness. Thanks to the adult dose of application software injected into our business environments, work flows in a far more integrated manner than most of us could have imagined 17 years ago. And Kaplan and Norton did not design BSC to account for this �?’ nor could they have, without rendering the approach �??theoretical�?? and thereby irrelevant in 1990.

��Based on the assumption, correct at the time, that most work flows in linear fashion from relatively independent function to independent function, BSC espouses targeting only a select few work activities at discrete functions for performance improvement at any one time. But today, almost all work criss-crosses among interdependent functions �?’ drastically reducing the likelihood that one activity can be improved without affecting others, or that one can be improved without improving others.

Improving performance in interrelated and integrated work environments requires scanning all interrelated functions and activities to locate not only where problems show up, but where root cause triggering events occur �?’ which may be far removed from points where problems manifest. Further, we also have to identify how eliminating defects upstream will domino into changes to other interrelated activities.

Together, these collective issues make the practice of cherry-picking functions and processes to fix both impractical and ineffective. We can no longer just find �??broken bones�?? and go straight to surgery. Today, we have to find complex causes of fractures to prevent them from recurring �?’ then thoroughly assess the potential unintended consequences of surgery in one place on other organizational body parts before picking up surgical tools. And taking matters a step further, in today�?Ts complex environments we have to develop and apply powerful scanning tools that find indirect causes of problems plus anticipate problems before they occur in one place and radiate out to others.

BSC lacks the scanning and diagnostic tools needed today to keep a company�?Ts moving parts moving freely and fully productively and for the right purposes. And these limitations seriously detract from BSC�?Ts utility as a comprehensive approach to performance improvement and measurement. At minimum, BSC will require serious retooling before it can regain its prior level of effectiveness.

And there�?Ts still more disruptive change coming. Without wanting to �??pile on,�?? the advent of Web 2.0 (and CRM 2.0) will further date BSC �?’ while dating numerous other management theories and approaches as well. And we might say we�?Tre already feeling the impact. Web 2.0 pushes the sphere of company-related communication far outside the boundary, and control, of the company. A growing percentage of business-affecting customer communication occurs among customers and customers, or customers and ex-customers, or even customers and critics with an ax to grind. And while we cannot �??manage�?? these external-to-the-company interactions, we still have to react to them. And measuring the effectiveness of our response will require metrics lying completely outside the realm of internal operations �?’ and outside the realm of BSC.

So, what do we do - ditch BSC and �??go onto the next?�?? Absolutely not. At least not in my opinion. While we do need to respect that Kaplan and Norton brilliantly designed BSC for a different time and a different place, we must also recognize that many tools imbedded in BSC tools remain relevant and powerful �?’ and some are still ahead of the change curve. Companies that ignore these tools may very well suffer more adverse consequences than companies implementing traditional BSC in today�?Ts decidedly beyond-traditional business environment.

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