Lean and Six Sigma have been implemented for many years and organizations have benefited from both methodologies. With Six Sigma, corporations have reaped benefits in the billions of dollars. With lean, organizations have reported up to 90-percent reductions in space utilization and cycle-times. When organizations consider implementing improvement methodologies, Six Sigma and lean are among the tools they evaluate. Then, they decide which methodology will get rid of waste and improve profitability.

Observing several organizations’ decision-making processes, it’s interesting to see that some choose lean over Six Sigma, and others pick Six Sigma over lean. Some companies choose a combination—lean Six Sigma—and others wait for a miracle to solve their problems. Any organization trying to improve its finances or reduce waste must practice both principles, knowing that neither will be fully implemented as promised by a quality guru or consultants. To maximize benefits, companies must balance lean and Six Sigma.

Lean is implemented more than Six Sigma in many corporations. Such a decision by corporate leadership creates the perception of “getting busy” without enough thinking. Six Sigma sounds statistical and a little difficult to understand, incorporates lots of tools (Greek to many corporate leaders), entails training to learn the methodology, and requires people to identify projects and have a good knowledge of the business. In a typical corporation, third-party consultants inform executives about lean and Six Sigma. It appears to be too much preparation and hassle for most people to implement Six Sigma, so lean is usually the methodology of choice.

Lean is similar to Six Sigma because it also reduces lots of waste, and it appears to be easy enough to learn in a day or two through lean simulations. Lean can quickly be implemented in an area, and it incorporates value stream mapping, 5S, kanban and other tools. Initially, lean means more actions and a little (lean) thinking. Lean means get busy, do something, make it look different and show some results. The results usually are saved space, better efficiency and finally, some head count to spare. This is what management teams appear to love about lean: cutting costs, improving profit and earning a bigger bonus. As long as one isn’t in the head count to be cut, lean is excellent. After the initial head count reduction and area improvement, the lean system hangs around until everyone returns to their old habits.

As recent events at GM, Ford Motor Co. and many others show, it appears that many corporations deploy improvement methodologies such as lean or Six Sigma to improve efficiency without a valued proposition for business turnaround and clear performance targets. In many cases, efficiency is achieved, and smart people are lost. Businesses get on the shrinking spiral, which is totally opposite to the fundamental business strategy to achieve sustained, profitable growth.

What’s the purpose of lean?
It’s to streamline operations to generate a product or service at the lowest cost to meet the customer demand. A successful implementation of lean implies building to the customer order, one item at a time and with minimal inventory. To build such a system, the customer demand must be understood, and suppliers must be operating in the lean mode as well. Having suppliers operating in lean mode is very challenging, as they aren’t required to be lean by all of their customers. In other words, lean can be started in a department to streamline operations, but its companywide implementation is a societal challenge. Thus, leadership must have a clear understanding of the aims of the lean initiative.

One of lean’s caveats is "No layoffs." The objective is to achieve efficiency and better utilize spare resources in achieving growth. Similarly, many organizations implement Six Sigma without understanding its intent, which is to achieve a lot of improvement very fast to stay competitive and be in a leadership position through excellence in all operations. Somehow, Six Sigma hasn’t been as much related to layoffs, because its implementation involves and modulates the corporate thinking first. It creates excitement and reduces waste. The taste of excellence lasts longer than the taste of reduced cost. Therefore, companies that have implemented Six Sigma show growth. However, like the implementation of lean, challenges still exist with Six Sigma. For example, no company that implements Six Sigma monitors its sigma level—they monitor their finances. There’s nothing wrong with monitoring financials, but the risk is that the Six Sigma initiative will eventually fade out after the low-hanging fruit are gone. In the early phase of implementation, excitement about Six Sigma and all the energy that employees put into the effort bring in some rewards. But without a specific sigma target, the Six Sigma drive becomes more difficult to sustain, results become trivial and its purpose is diluted.

Both lean and Six Sigma methodologies must be used with clear targets or expectations. Instead of start, run and stop, the improvement initiatives must be linked to the fundamental business strategy of achieving sustained, profitable growth. When lean is thoroughly implemented, it contributes significantly to profit, while Six Sigma will aggressively force innovation and lead to growth. A sigma level is an operational measure; the bottom line is a financial measure. The operational measures are leading indicators of the finances. To achieve sustained improvement in financials, companies must have superior operational measures.

Balancing Lean and Six Sigma Thinking
Thinking aspects	Lean Six Sigma
Management	Quality and flow
Goal setting	On demand and innovative
Problems	Elimination
Focus	Perfection in value to customer
Outlook	Reasonably long term
Organization	Learning and empowered
Training	Mandated
Employee ideas	Sought and implemented

The table at left shows the integration of lean and Six Sigma thinking. Lean and Six Sigma tools are subservient to the right thinking. Without the proper thinking, tools become like a hammer hanging over the head, so beware.

To maximize the benefits of lean and Six Sigma, corporations must balance the implementation of both. Balance means an integrated and optimized level of lean and Six Sigma to achieve profitable growth, and not just the profit now. If a company focuses on just the profit, layoffs are the obvious choice. Achieving growth challenges us to utilize our precious resources, especially human capital, and requires thinking, innovation, and new products and services. Businesses require sales and people, and with reduced sales and fewer people, no leadership can succeed.