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Apr 28, 2010

ISO 9001 Vs Six Sigma

If you won't get into the history and background of each process management approach. You only have to search engine "Six Sigma" or "ISO 9001" to get your fair share of information. This article will go for the jugular on a topic that has been on my mind for some time. It has been touted in best-selling business books but that was 10 years ago.


Before I get off-topic, let's jump straight into a bullet list that lists the problems with Six Sigma:

1. 3M, GE, Home Depot, Ford and other major companies are pulling back on Six Sigma because research shows that customer satisfaction and employee morale has suffered

a. On the other hand, customer Satisfaction is a major theme of ISO 9001 as Customer Focus is one of the eight ISO 9001 management principles.

2. Over analyzing

a. On the other hand, ISO 9001 simply suggests that your business should take a Factual Approach to Decision Making. This means making informed decisions and ensuring data and information are sufficiently accurate and reliable and accessible to those who need it. ISO 9001 wants you to use the facts but to also balance it with experience and intuition.

3. Six Sigma and innovation do not co-exist in the same world

a. Another major theme of ISO 9001 is Continual Improvement. Unlike Six Sigma, ISO 9001 puts innovation squarely on the roadmap for organizational success.

4. It's all about numbers and not about customers

a. Again, ISO 9001 makes it abundantly clear throughout the standard that Customer Focus is a key element to business success.

5. Six Sigma = cost cutting. Surely, your business exists do to more than just cut costs?

a. ISO 9001 reminds us that in addition to cutting costs, we also have to focus on Mutually Beneficial Supplier Relationships, Leadership, Involvement of People and more.

6. Six Sigma = micromanaging

a. ISO 9001 is anything but micromanaging if it is well-implemented by an experienced consultant. The standard only required six documented procedures. A smooth-running ISO 9001 certified company is one that operates on its own positive, organic momentum.

7. It is elitist. Since when should a company only take direction from Black Belts? Whatever happened to everyone in a company acting as a process improver?

a. Not the case with ISO 9001. Only one central role of Management Representative needs to be assigned. As for the rest of the employees, everyone is encouraged to play their part.

8. It does not incorporate information technology - a huge force that can impact processes

a. There isn't anything specifically written into ISO 9001 speaking to Information Technology. However, several sections of the standard allow ample opportunity for IT to shine and play a central role.

9. It espouses incremental improvement, not radical breakthroughs

a. One of my personal favorite Management Principles of ISO 9001 is Continual Improvement.

10. Read any article about Six Sigma and you are bound to find a disclaimer section addressing concerns or issues with it.

a. ISO 9001 does not generate the same kind of backlash Six Sigma is getting

11. A Fortune 500 article stated that "of 58 large companies that have announced Six Sigma programs, 91% have trailed the S&P 500 since"

a. On the other hand, a Harvard Business School Working Paper by David I. Levine and Michael W. Toffel published on January 18, 2010 concludes that ISO 9001 delivers value, is not a fad, increases sales by roughly 10%, and more. The authors mention "...the strength and consistency of our findings leads us to shift our own priors in favor of the hypothesis that ISO 9001 adoption is more beneficial than we had anticipated."

12. It is based on arbitrary standards

a. 3.4 defects per million opportunities sounds great for some industries assuming their products are life-threatening or simply cannot endure any margin of error. But would you apply the same strict standard to your typical contact centre or service provider? Why does it need to be six standard deviations? This is not explained. Also, Six Sigma operates on the assumption that process data always conforms to a normal distribution model.