Leadership & Business

Lies, Damn Lies, and Statistics

Rarely do I find the need to directly blast another writer, but this is one of those times. In a recent article published by Chief Executive Magazine the value and legitimacy of six sigma as a means of improving business performance is challenged by Charles Holland, Ph.D.

One doesn’t have to read very deep to see that this article is really nothing more than an advertisement for Dr. Holland’s book.  As a PhD and statistician, Dr. Holland knows all too well the problems with his analysis. But for everyone else, I think they’re important to discuss.

First, there is absolutely no reference to where you can find the details of his research and there is no mention of the methods used.  For example, he cites research involving 58 companies.  Yet thousands have implemented six sigma. What science was used to ensure these 58 are truly and statistically representative of the rest.  The lack of any discussion or reference to where this discussion can be found leads me to ask whether they were chosen to reinforce his point.

Then, while Dr. Holland uses the entire article to hype Multivariable Testing (MVT)—which by its very name implies that many variables are necessary to truly understand a business process, he would like to credit six sigma will all or none of a company’s success, rather than acknowledge that the implementation of six sigma is but one of many variables that determine a company’s success.  He also fails to acknowledge that what he brands as multivariable testing is really nothing new, and is included in the six sigma tool set used by any well-trained six sigma expert.

It is true that six sigma alone won’t lead to success.  And it is true that a myopic view of six sigma can be detrimental.  But it is equally true that when used in combination with strong leadership, a sound business strategy, and in some cases alignment of the starts, six sigma has been proven to deliver exceptional results.

The point is that, as Mark Twain is often quoted, “There are lies, damn lies, and then there are statistics.”  Dr. Holland should be ashamed of the way he has tried to use statistics to distort the truth.  And Chief Executive should be equally ashamed that they published his work.

The Chief Innovation Officer

This week I participated in a first of its kind course titled, “The Chief Innovation Officer.”

It’s a course that was designed to meet a very specific and rapidly growing need.  And in fact many of the course participants noted that they had been searching for some time to find a course just like it.

Anyone reading this blog already knows the statistics.  A bazillion percent of CEOs say innovation is their top priority; IBM, Booz Allen, and others have launched innovation practices; business magazines are writing about innovation every week; and “best practices in innovation” conferences are popping up everywhere.  And, companies are assigning top executives responsibility for their innovation efforts.

But, despite all the attention (and hype) few companies—or people—really understand what it (innovation) really means.  I’ve run into people at conferences that say to me, “if I just pick up one golden nugget—one best practice—that I can take home with me, I’ll consider this conference to be a great success.  My response:  “wow, you don’t really value two days of your time very much, do you?”

So the faculty for the course:  Dr. Phil Samuel of Breakthrough Management Group, Cheryl Perkins, of the Innovation Edge, Robert Tucker of the Innovation Resource Center, and myself (of course) set out to design a course that would truly teach people what they needed to know to become their companies Chief Innovation Officer, whether they carry the title or not.  The intent was that 100% of the two days be filled with valuable insights and that instead of going home with a golden nugget, the attendees leave with a full treasure chest.

And that’s just what happened.  In the words of one participant, an Executive Vice President for a $16B company, “ . . .reflecting on the last 2 days. It may very well be that you just held the best session I have ever attended.”

Sentiment from others was similar.  Participants came from major healthcare organizations (boy can we use some innovation there), large distributors of products from cars to semiconductors, the paper industry and large insurance companies.  One participant, when asked what he would do when he left answered by saying, “ask my CEO to change my title to Chief Innovation Officer.”

The next "Chief Innovation Course" will be held on October 1-2, 2007 in Denver, CO.

My hope is that we’ve started to bring some clarity to an otherwise murky area of business—because the success of business in the United States depends on it.

I’ll let you know . . .