A recent blog in Harvard Business Review by Ron Ashkenas (http://blogs.hbr.org/ashkenas/2012/05/its-time-to-rethink-continuous.html) takes aim at Lean, Six Sigma, and other continuous improvement methods and suggests that these approaches may be harmful to firms. While much of Ashkenas criticism is valid he misses two key points:
- Lean and Six Sigma are methods for improving operational effectiveness. You cannot build a sustainable competitive advantage through operational effectiveness alone. Strategy is what builds a competitive advantage and it is strategy that determines operations and their configuration. Improving operations outside of a strategic context is not only harmful, it is a misallocation of resources.
- Blindly pursuing Lean or Six Sigma means you have entered a race to be the best. Competition is not about being the best, it is about being unique. Rivals in many industries have homogenized themselves to uniformity and lower profits by converging at the same place through Lean and Six Sigma. It is valuable differences between firms that drives superior profitability, not trying to do the same thing as rivals, only better.